Reopening borders will help economy roar back

Australia’s double-dose vaccination rate moved past 85 per cent on Sunday, as Scott Morrison and Josh Frydenberg were preparing to maximise the economic benefits of the final phase of the national reopening plan. More than 200,000 visa holders will be allowed into the nation, including students, economic migrants and refugees. In meetings last week with businesses from almost every sector, the most pressing issue raised with the government was workforce shortages and the need to reopen borders to allow skilled migration to recommence.

The first Singaporean tourists and students for almost two years arrived in Sydney and Melbourne on Sunday, under the Australian-Singapore travel bubble. Lifting international borders will revitalise the education sector, which before the pandemic was Australia’s third-largest export and largest services export. The 750,000 international students in Australia added about $40bn to the economy, supporting 250,000 local jobs.

In next month’s mid-year economic and fiscal outlook update, Treasury is expected to upgrade its migration forecasts, prioritising skilled migration. Australia’s generous humanitarian refugee program, which stalled during the pandemic, is also expected to pick up in coming months.

Over the two years before the pandemic, as the Treasurer says, Australia accepted about 110,000 skilled migrants a year. The May budget forecast negative net migration of 77,000 in the current financial year as some people returned to their countries of origin. Around the same time, the most comprehensive survey of occupational shortages by the commonwealth, the Skills Priority List published in June, found skilled workers were in short supply in 19 per cent of more than 800 occupations.

The spheres experiencing shortages and which also expected strong demand for workers in future included engineering, accountancy and other professional services, medical practitioners, ancillary professionals such as physiotherapists, nurses, early childhood teachers, mechanics, skilled tradespeople for the construction sector, ICT specialists and most of the hospitality sector, which has a serious shortage of chefs, cooks and needs casual waiters. Restaurant and Catering Australia chief Wes Lambert recently said many restaurants and cafes were losing revenue because they lacked staff to open for business as many days as they wanted.

Australians’ recently rediscovered freedoms and the Prime Minister’s blueprint for economic expansion are built upon the successful anti-Covid vaccine rollout. At this stage, important lessons need to be learned from Europe, where restrictions and partial lockdowns are being reimposed as virus caseloads increase and the efficacy of early vaccinations wanes. Australians’ health and economic wellbeing over the coming year will depend on a disciplined, comprehensive program of booster shots ahead of winter, when Covid tends to flare up.

The importance of proactively promoting vaccinations is evident in Queensland, where the state government has worked hard in recent weeks to catch up with the rest of the nation, with Premier Annastacia Palaszczuk and her ministers taking the message out personally to communities where rates are lowest. Latest figures show 23,704 Queenslanders, more than in any other state, were vaccinated in the past 24 hours, taking the total of adults with one jab to 84.5 per cent and those fully vaccinated to 73.3 per cent. The late surge will enable the government to bring forward opening the state border to somewhere between December 6 and December 12, depending on when the state reaches 80 per cent of adults fully vaccinated. With schools set to break up early in December, opening the border as soon as possible is vital for travel plans and Queensland tourism hubs, which have suffered badly for almost two years.

Maximising post-pandemic economic opportunities and the social benefits of recovery will be a major theme in the political battle in coming months. To that end, Mr Frydenberg is set to battle with Labor over tax policy, with Treasury analysis showing the Coalition tax plan will deliver $5bn in cuts to small business over the next two years. If post-pandemic growth is to reach its full potential, it will come from increased investment, business activity and productivity in an economic environment in which Covid fallout is minimised.