As coronavirus isolation takes Australia back to the 1980s, it leans on locals to revive economy

With the flow of foreign tourists and students frozen, Australia is pinning hopes for a rebound on local consumption

But for consumption to recover, households must put aside concerns over job security and debt to propel spending

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A ferry passes in front of the Sydney Opera House. Photo: DPA

Published: 11:15am, 20 May 2020Updated: 11:18am, 20 May 2020

Australia’s success in curbing Covid-19 infections is allowing it to slowly ease some restrictions even as it remains largely closed off from the rest of the world, taking its economy back to the pre-globalisation era.

Mining and agriculture continue to support exports and a government-sponsored group is looking at ways to revive manufacturing. But the flow of foreign tourists, students and immigrants has been frozen, pinning hopes for a rebound on local consumption.

The closed borders and domestic reliance has the economy harking back to the 1980s, before the lifting of tariffs opened up trade and Paul Hogan offered to put another shrimp on the Barbie for international visitors.

The capacity of services to quickly turnaround and the fact Aussies aren’t blowing savings on holidays abroad could help the nation fare better than many developed-world peers.

Much will depend on the mood of households as unemployment rises, with a poor construction outlook adding to headwinds.

“Close to 1 million Australians per month travelled overseas in 2019. They will now be looking for a change of destination, heading to Noosa instead of Nusa Dua; Port Douglas, not Penang; and catching up with friends at bars in Melbourne Laneways, instead of Hong Kong’s Mid-Levels. Containment measures change the economics of international travel,” economist James McIntyre said.