International travel is likely to remain curtailed for Australians until 2024, according to a new report.
Deloitte Access Economics’ quarterly business outlook – which was printed prior to the Morrison government’s COVID vaccination program being thrown into disarray late last week – predicts international borders will re-open only gradually.
Deloitte economist Chris Richardson anticipated some sort of quarantine requirements remaining for incoming travellers to Australia for some time.
“That keeps international travel – both inbound and outbound – pretty weak in 2022, and it may not return to pre-pandemic levels until 2024,” he said.
A travel bubble with New Zealand is just days away from commencing, providing Australians with their first opportunity for quarantine-free international travel in more than a year. Singapore and some Pacific Islands have been suggested as possible candidates for future bubbles, but no definite arrangements have yet been made.
Late last week, federal health authorities recommended the AstraZeneca vaccine should be given only to people older than 50 due to the rare risk of blood clotting.
AstraZeneca’s was the vaccine the Australian government was relying heavily on. It has since secured an additional 20 million Pfizer vaccine doses that will be shipped from abroad later in 2021.
Otherwise, Mr Richardson said globally vaccines were mostly working, governments were still mostly spending and central banks were mostly “pedal to the metal” in term of low interest rates.
“Fundamentals are moving pretty fast off the back of that,” he said.
He said Australia’s economy appeared to be “roaring back”, although like the Reserve Bank, he expected a lift in the interest rates was some years away.
Shadow treasurer Jim Chalmers said the expected economic rebound was welcome.
“But Australians’ jobs and livelihoods are being threatened by Scott Morrison’s bungled vaccine rollout, premature cuts to JobKeeper, and attacks on wages and incomes,” he said.
Mr Richardson did not expect a sustained inflation rise back into the RBA’s 2-3 per cent target band to begin until 2023-24.
“A sustained lift in inflation requires a conga line of things to happen,” Mr Richardson said.
It will take time for the jobs market to tighten and the unemployment to fall enough to lift wage pressures.
“This is going to be a slow moving train not a fast one,” he said.
One immediate hurdle for the labour market will be March’s demise of JobKeeper.
Mr Richardson anticipated many stories of individual business closures and job losses as a result of the wage subsidy ending.
He doubted the jobless rate would return to above 6 per cent as a result of the end of JobKeeper.
“But if it does, it will only be temporary,” he said.
The Australian Bureau of Statistics will release labour force figures for March on Thursday. They will capture the final days of the JobKeeper program.