COVID-19

IMPACTS ON
AUSTRALIA
MGT1IB

Khyahm Harvey 20720788

Thi Quynh Anh Le 19836592

Vishvesh Divyeshkumar Mashruwala 20668792

Muhammad Soman 20113396

Ven Smit 19997272

Table of Contents. Page

Introduction
By Khyahm Harvey 20720788 1

1.1 The negative effect of Covid-19 on Australia’s economy and business 1

By Thi Quynh Anh Le 19836592

1.2 How Covid-19 bring positive affect to Australia economy and citizens 2
By Muhammad Soman 20113396

2.1 The policies and solutions designed to deal with Covid-19 crisis. 3
By Vishvesh Divyeshkumar Mashruwala 20668792

2.2 The policies and solutions designed to deal with Covid-19 crisis 3
By Ven Smit 19997272

Conclusion 4
By Khyahm Harvey 20720788
COVID-19 is a pandemic that's taken over the world, causing millions of people to be forced
to stay inside, of course, has affected Australia and its people. Due to the pandemic, there
has been a negative effect on the economy such as how Unemployment rates have mainly
increased, the government has spent millions of dollars on healthcare and business sectors
failing due to there not being a need for them. As COVID-19 had many negative impacts,
there were also positive impacts. The environment benefited greatly from the lockdown
rules implemented. Supermarkets and liquor stores generated vast profits as a result of
panic buying. COVID-19 opened up potential markets for e-commerce businesses to thrive.
Solutions to the pandemic have arisen regarding certain things. Delivery services have been
adjusted, so there are things such as contactless delivery. Schools and universities have
changed to online learning making it more convenient and safer for students to attend
school still. Stimulus packages have also been introduced to many businesses as a way of
fuelling international business.

1.1 The negative effect of Covid-19 on Australia’s economy and business

The pandemic of COVID-19 is happening in every country around the world, Australia is also
one of the regions affected by this issue. A pandemic might lead to several negative
consequences related to some aspects and sectors of the Australian economy. The outbreak
of the pandemic and the social-distancing strategy related to people in Australia may result
in a sharp decline in the number of employed people and the labour market. Murphy (2020)
indicates that the unemployment rate resulted from Coronavirus has reached the highest
level since 2015. Australian Prime Minister Scott Morrison stated that the unemployment
rate increased from 5.2% to 6.2% in May (cited in Murphy 2020). According to the Australian
Bureau of Statistics, the lockdown policy released by Australia's Government to limit the
spread of the virus induces a sharp decrease in the number of people having full-time and
part-time jobs. The number of people with full-time jobs dropped by 220,500 and the
unemployed worker has grown by 104,500 to 823,300 employees. The significant rise in
joblessness might lead to a reduction in income which is related to the decline in Australian
housing prices (Farrer, 2020). However, with the decrease in house prices that may cause
changes in household consumption and spending behaviour, savings might be boosted and
borrowing can be reduced (Farrer, 2020). Moreover, the pandemic also causes the
Australian government to spend billions of dollars to stop the spread of the virus and
provide health care for Australia citizens (Borys, 2020). Borys (2020) also emphasizes that
the health care system in Australia is receiving $2.4 billion from the government. The report
also said that the Australian Federal Government might use the money to advance health
advice services, clinics, and testing for COVID-19. The clinics of respiration can be funded
$ 206.7 million by the Government to be organized and it is estimated that it can cost $ 170
million to conduct Coronavirus tests for citizens in Australia (Borys, 2020). In addition, it
takes $ 30 million for the Australia Government to research vaccines for COVID-19 and
vaccines to help to prevent diseases related to the respiratory system. The high investment
costs for health can be considered as a result of Coronavirus, especially as it may cost up to
$ 1.1 billion for the government to buy treatment facilities and health care equipment for
employees in hospitals and victims of the COVID-19. Additionally, the change in consumer
demands can occur because of the pandemic and the restriction of social distancing Wegner
and Zaveri (2020) mention that 64% of consumers choose simple and basic products or
items to meet daily needs, in contrast, the demand for luxury products and expensive
vacation might be reduced during the pandemic time. When customers might not need to
buy and consume products that a business produces or offers, which means the business
may struggle with demand-side shock because of COVID-19 (Plastow, 2020). One of the
examples of this case is the tourism industry, the demand for buying flight tickets and
renting hotel is declining due to social distancing. However, online items might become
popular for consumers as the percentage of people who purchase online regularly increases
from 39% to 76% (Wegner & Zaveri, 2020).

1.2 How Covid-19 bring positive affect to Australia economy and citizens

COVID-19 has had a significant influence on Australian and international businesses in just
very few months. Every business sector faced a huge decline, many of the Australian and
international businesses were negatively impacted and few had a positive effect due to the
corona pandemic. Certainly, COVID-19 has been positively affecting the environment, local
air, water quality has increased, and emissions have reduced globally which is beneficial for
NGOs to create awareness and make it sustainable. At the start of February awareness of
COVID-19 rose resulting in panic buying, this continued till March. Some businesses took
advantage of this time and made a huge profit. Globally the panic buying of people
increased the demand for the goods, supermarkets experienced huge growth in new
customers and sales. Demand for household things such as toilet paper, meat, hand
sanitizer’s and many other essentials was boosted. In Australia, the supermarket Coles
group has stated its third-quarter sales revenue increased by 12.9% to $9.2 billion (Cotton I,
2020). Additionally, other markets such as IGA or ALDI generated huge profits. International
and Australian businesses are being more innovative and productive due to COVID-19.
Online retailers were introduced to encourage people to buy things online, therefore,
staying at home. Many retailers also had production increased to meet the E-commerce
demand. Restaurants experienced a positive change due to toCOVID-19, as they keep their
shops clean and hygienic all the time; this will benefit them in the long run. In Australia
BWS, Dan Murphy’s, and other liquor shops increased revenue by up to 17%. As more cities
are going under lockdown, nonessential businesses are closed, and people are not allowed
to visit public places which were an opportunity for E-commerce businesses to gain a
market by making sales online. One renowned company operating in Australia and New
Zealand revealed sales of $7.3 billion in the corresponding period. Likewise, in March of
2020 After Pay had increased to 8.4 million active customers. Coronavirus is speeding up the
introduction of a cashless society as fears the virus is being manipulated through cash and
coins, resulting in the increasing use of tap-and-go payment channels and digital
transactions which will ease business in managing cash (Danica C, 2020). As increasing fear
of COVID-19 and the number of COVID-19 cases has increased demand for medicine,
pharmacist and pharmaceutical labourites have had increased sales which boosted their
profit for these months. There has also been growth in the research of Covid-19 and the
development of 3D printed medical supplies, which helps to promote more efficiency at a
lower cost. Health care has announced its new tablet-based solution for patients in
response to COVID-19.
2. 1 The policies and solutions designed to deal with Covid-19 crisis

There are various solutions and strategies that the Australian government and worldwide
organizations released to solve the issue of Coronavirus, help international businesses and
companies. Australia has been in lockdown since early March, this has protected a lot of
citizens and foreigners from contracting COVID-19. Due to COVID-19, international business
and companies are experiencing a great loss. The Australian government has adopted new
measures, and the private sector has also acted, to respond and ensure that E-commerce
can help to alleviate some of the challenges faced in combatting the virus. This has included
increasing network capacity, offering expanded data services at little or no cost improving
delivering services and logistics, etc. The global nature of the virus and its impact on
international business may encourage strengthened international corporation and the
development of policies for online purchases and supplies. Companies have enlarged
specialist teams and dedicate resource centers to help clients and keep their business run
fluidly. These teams are constantly working to provide economic analysis, tax, and
regulatory updates and complete guidance to help business leaders make informed
decisions. (William Buck Brisbane, 2020). Further discussing more international business,
focusing on the universities which considered business units, International education
generated $12.6 billion in revenue for Victoria last financial year. As university campuses
have been shut down, teaching has been moved online making it easier for students. As
they can learn things and are prepared for online classes as this will help the students in
their future meetings in the business workplace, they can connect to any person in any part
of the world easily and make deal with these online communication skills. This has also been
one more positive step by the Australian government as it keeps the business of universities
going, as well as creative teaching. The government has helped international students by
giving them some relief funds in this hard crisis as they are far away from their native
countries, keeping this insight the Australian government sustained their international
business. In MediaNet press release (29 April) the Australian government is giving up to
$1,100 to international students and it is recorded that there are 40,000 international
students enrolled at Victorian universities. (Anon, 2020) IDP is connecting to the problem of
COVID-19 and creating the opportunity to reshape the future of International Education in
Australia.

2. 2 The policies and solutions designed to deal with Covid-19 crisis

Australian international business market heavily relies on the export of its resources. Many
businesses involved in export in Australia have been affected by both business closure and
the rise in demand for certain products. One way the government is tackling this problem is
by the Australian Border Force suspending the custom duties on certain medical and
hygiene products needed to combat COVID-19.
According to the Australian Border Force (2020), Some of the items this includes are face
masks, gloves, gowns, face shields, disinfectant preparations, and test kits. This will enable a
higher quantity of these essential items to be brought into Australia funding both the
medical and consumer demand. An additional measure by the government's Department of
Foreign Affairs and Trade is acquiring fright access for Australian agriculture and fisheries
exporters add $10 million in Australian Fisheries Management Authority levies will be
eliminated for all commonwealth fishers (Birmingham, 2020). This $110 initiative will enable
Australian agriculture and fisheries exporters key access to the overseas markets without
the pressure of heavy levies during this time of unstable economy. While filling overseas
demand for produce from Australia it will also ensure the jobs of thousands of fishers,
divers, deckhands, and processors, easing the impacts of unemployment. As well as
suspending levies, in response to the Covid-19 Pandemic, many government bodies around
the world have introduced social assistance and financial funding for businesses. Within
social assistance, cash transfer programs are the more widely used intervention. As of
March 3rd, there are 124 programs in 71 countries, 54 of these are new initiatives
specifically as a response to Covid-19. In Australia, they come in the form of, 50% of the
wages for apprentices from January to September, and $21,000 per employee per fortnight
for eligible business (Gentilini, Almenfi & Orton, 2020). This social assistance eases the strain
on businesses that are financially struggling. As for funding as of the 1st of April 2020, the
Morrison government will provide an extra $49.8 million for the Export Market
Development Grants along with the previous $60 million already pledged to bring the grants
to $207.7 million for the 2019-20 financial year (Birmingham, 2020). This will deliver much-
needed relief to businesses in the export and tourism industry as they would have been the
first to feel the effects of the economic downturn fuelled by the COVID-19 crisis. These
initiatives and funding brought in by the Australian government ensure that Australian
businesses stay in the overseas markets and negates some of the negative impacts the virus
has had on trade, export, and the labour market.

To conclude, COVID-19 has caused unemployment to increase by 1%, the government has
spent millions of dollars on services like healthcare, specific business sectors started to fail,
causing businesses to close down due to there being no customers. There have also been
positive effects as a result of the coronavirus. Other companies have greatly benefited from
the outbreak, causing an increase in sales revenue, e-commerce businesses have begun to
thrive as there are more people than ever working from home. The Australian government
and businesses have also tried implementing solutions and policies to try and combat some
of the issues that have arisen due to COVID-19. An increased network capacity and
expanded data services at little to no cost were introduced to help people at home get
through the pandemic and its lockdown laws. International students were given relief funds
to help continue international education in Australia. Medical and hygiene products have
also had custom duties suspended so that there could be a high quantity of these items
brought into Australia. Stimulus packages were also released to keep the economy going
and support the Australian population. Overall the COVID-19 pandemic has caused the
international business to have to adjust and reinvent itself.
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