Economic trends
- CommSec has regularly provided updates of the stimulus measures provided by Federal, State and Territory governments to support businesses and individuals deal with the consequences of the COVID-19 coronavirus (April 20, May 7, May 25 and June 18). CommSec has also highlighted the plans outlined by the State and Territory governments to re-open their economies (May 7, May 25 and June 18). This report updates the information.
- Stimulus and support measures: Federal, State and Territory Governments have committed $301 billion or around 15 per cent of GDP in support and stimulus measures in the wake of COVID-19.
Government decisions on easing lockdown restrictions have implications for all sectors.
What does it all mean?
- While there is a setback in Victoria, Australia has generally made good progress in stopping the spread of the COVID-19 virus. Now States and Territories are cautiously re-opening the economies. As always it is a case of finding a balance between the health risks and the economic risks.
- As we have seen in Victoria, COVID-19 cases can lift again as the economy re-starts. The aim is to contain and expertly trace outbreaks, maintain an active testing program and cautiously re-open economies.
- The re-start timetable has varied across states and territories. The number of active cases is zero or near zero in the Northern Territory, ACT and South Australia. Western Australia and Queensland. NSW cases remain low and manageable. But nationally the area of concern is Victoria. Importantly there is no single road map to follow – plans have to dynamically change with circumstances.
What are the implications for investors?
- Investors will need to particularly stay on top of daily information of virus news and developments to gauge implications for companies, sectors and the broader market. Companies in hospitality, property trusts (REIT), retailing, travel, leisure, education remain most at risk.
- Governments and banks have actively provided all the support and stimulus required do businesses and families can get through this crisis. They may need to do more. Encouragingly they acknowledge that this may be the case.
- Australia has dealt with the crisis better than most nations. If health authorities can quickly contain the outbreaks in Victoria, the outlook for the economy is bright.