Back to Research Papers/Webinars

Varying impacts of Covid-19 across Queensland Regions

15 April 2020

Varying impacts of Covid-19 across Queensland Regions

Author: Professor John Rolfe CQUniversity / Rural Economies Centre of Excellence

Covid-19 may be truly the wind that blows no good for any of Australia’s regions. Apart from the loss of human life and adverse health and social impacts, all regions have negative economic consequences. The speed and depth of the impacts, and the ongoing government responses to them, are unprecedented. Yet the impacts and outlooks vary across regions, as I discuss here with particular reference to the Queensland economy.

The economic impacts are occurring through several forces, including:

• Direct effects of government controls, which are limiting business operations
• Reductions in customer demand
• Flow-on effects through the economy.

There are some sectors most affected by these pressures:

• The direct effects of government controls are particularly impacting on Tourism, Hospitality, Arts & Entertainment, and Personal Services sectors. These are sectors requiring substantial travel and interpersonal contact, often involving small businesses.
• Reductions in customer demand are immediately impacting on Hospitality, Arts & Entertainment, Personal Services, and most Retail sectors. There are some increases in demand for supermarkets and liquor stores.
• Flow on effects into other sectors of the economy are beginning. For example, some health services are impacted by both shortages in supplies and reductions in demand, while reduced mobility and reductions in spending are reducing activity across the retail and services sectors.
• There are also some impacts on supply chains across all major sectors. However, most businesses are adapting to shortages in inputs rather than being forced to close.

 

Given this background, it is important to realise that the slowdown is not a shutdown. The sectors that have been most badly affected to date (tourism, airlines, hospitality, arts & entertainment and personal services) are together only about 20% of the economy. Some major sectors such as Agriculture, Mining and Construction have experienced limited impacts to date. In Queensland, Government accounts for about one in ten jobs, with 250,000 full-time equivalent positions out of a total workforce of about 2.5 million, and these are continuing. Government programs fill spending gaps by lowering taxes and charges and boosting support spending. Together with other stabilisers such as the floating Australian dollar and changes to interest rates, most of the economy continues to function.

Download the full paper here