Australia is among a handful of countries around the world that has pursued an aggressive virus elimination strategy since the beginning of the pandemic, characterized by extremely strict border controls, effective tracking and tracing, and highly reactive lockdowns. This strategy resulted in several months of negligible COVID cases in Australia, allowing the domestic economy to thrive. However, the highly infectious Delta strain has made this strategy untenable in recent months, causing immense strain on the economy and the public through prolonged lockdowns. In August 2021, the Morrison government rolled out a National Plan to pivot away from its zero-COVID strategy once certain vaccination thresholds are achieved. Since then, some state governments have announced their opposition to this plan, while others are broadly aligned.
Australia’s plan to reopen the economy implies greater freedoms and higher consumer spending, driving revenues for businesses and growth for the economy. However, the National Plan may see some disruption in the early weeks of its rollout, as it marks a drastic shift in strategy for a country that is not used to living with the virus from the beginning. Significant increases in hospitalization rates could cause the government to quickly roll back its plan. State- and territory-level differences in reopening will likely emerge as well, e.g., the Premiers of Queensland and Western Australia have indicated their reluctance to fully reopen state borders based solely on vaccination thresholds and not case loads.
B2C companies in particular should expect a significant boost to their business due to this shift in COVID strategy, as consumer spending will be driven by pent-up demand for out-of-home entertainment, services, and travel. However, firms should account for the risk of reopening timelines getting delayed as they engage in demand planning. Firms should also be cognizant of state-level differences in reopening policies that could create disparities in the pace of consumer spending recovery across states.
At FrontierView, our mission is to help our clients grow and win in their most important markets. We provide the research, data, and insights you need to outperform the competition. Subscribe to our weekly newsletter The Lens published by our Global Economics and Scenarios team which highlights high-impact developments and trends for business professionals. For full access to our offerings, start your free trial today and download our complimentary mobile app, available on iOS and Android.