The Australian Government’s decision to pay businesses to keep employees on the job during COVID-19 will allow for a quick recovery, according to Central Queensland University Economist, Professor John Rolfe.
“This was an important decision because what usually tends to happen during a recession – take the 1992-1993 recession for example – is that people get laid off and find it difficult to re-enter the workforce,” he said.
“Trying to maintain people in the workforce now will allow businesses to recover quickly.”
Prof Rolfe said the problem with making stimulus predictions, during the COVID-19 epidemic, was that no-one really knows how long control measures will be in place.
“If this was something that went on for only one or two months, it be like a long Christmas holiday – it would hurt, but people would come back to their jobs, and businesses would resume as normal,” he said.
“If we were to experience a lot of disruption, over the course of between six to 12 months, then I believe the impacts would be much deeper and longer.”
Prof Rolfe said a disruption like the pandemic would bring about sharp changes in the economy.
“Businesses that do well now, will be doing this differently in the future.
“This sort of crisis will force businesses to think of ways to interact with their consumer, other than through face-to-face contact,” he said.
“It’s called the burning bridge syndrome – innovating out of disruption. When you’re desperate to achieve something or make something work, you come up with novel solutions, but you don’t do it when times are good.”
“Right now, we’re also experiencing a lot of businesses trying to service consumers from a distance.
“As a result, I expect technology will become much more important in a lot of sectors.
“We’ve seen technology play its part in the tourism and mining sectors, but we haven’t seen much of it used within the health sector.
“Post COVID-19, we could potentially see a lot more automation being delivered throughout our health care system, similar to what we engage with and experience at a bank.”“It’s important to remember that two-thirds of the Australian economy is ticking over as per normal, with COVID-19 impacting roughly 23 per cent,” he said. “While this is expensive and painful, it’s still a relatively short-term problem. In five to 10 years, we will look back and we’ll remember COVID-19, but it won’t be a huge scar on the landscape.”
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