’Triple threat’ slowing state’s COVID recovery
A TRIPLE threat from border restrictions, "battered" coal demand and uncertainty from China will see Queensland's economy recover slower than almost anywhere else in the country next year, according to a new forecast.
Deloitte Access Economics business outlook report is predicting a 2.7 per cent bounce in the state's economy next year, less than any mainland state outside Victoria.
It puts it down to the hit to employment from international and state border shutdowns and slumps in demand for even coking coal as steelmakers around the world cut production due to the pandemic.
It also pointed to continued tensions between Australia and China, with the emerging superpower acting as a huge source of demand for the state's resources.
"Were that to dry up, then the state would be in an unenvious pickle," senior economist Chris Richardson said.
"In a response to these fears, and the great unknown of COVID, confidence has taken a battering. Businesses aren't spending and it'll take a good jolt to change that."
Mr Richardson said Queensland had the largest drop in unemployment of the states this year, excluding Victoria.
"The closure of international borders have ground the state's normally bustling international tourism sector to a halt … where domestic tourism may have been able to fill some of that void, the closure of state borders has made that all but impossible for most of the year," he said.
"While closed borders have considerable benefits, they also have considerable costs."
Coal prices have risen slightly in recent months but remains below crisis levels.
"While the state's gas production is on firmer footing, it too is feeling the pain of the drop in world energy prices," Mr Richardson said.
Deloitte Access Economics forecast that the state's economy would grow by 2.7 per cent in 2021, compared to 4 per cent in WA, 3.1 per cent in SA, 3.4 per cent in NSW and 1.8 per cent in Victoria.
Opposition treasury spokesman Jim Chalmers seized on comments in the report that families in businesses would face a "cash crunch" towards the end of March next year as JobKeeper and Jobseeker are wound back.
Mr Chalmers said cutting JobKeeper would lead to high unemployment lasting longer.
Treasurer Josh Frydenberg has said the wage subsidy had always been temporary and that the budget was transitioning into a new recovery phase with a focus on creating new jobs.
Originally published as 'Triple threat' slowing state's COVID recovery