Sydney’s central business districts, which have been especially hard-hit by lockdowns, will get special attention including a $50 million CBDs Revitalisation Program which aims to entice people back to traditional business and entertainment hubs.
Three disproportionately affected sectors will also be targeted; the arts, tourism and hospitality. This includes $50 million for a Performing Arts Relaunch package and the $66 million Alfresco Restart Package to increase the capacity of hospitality businesses to use public and private space for dining and other outdoor activities.
While the state government’s recovery measures will help, there are limits to what state governments can do to pump-prime the economy.
National economic policies, especially interest rates and federal spending decisions, will have a major bearing on the state’s economic recovery.
Households savings in NSW have increased markedly during the pandemic as a result of reduced consumption opportunities and government income support payments. A lot will depend on their willingness to spend it.
There are already promising signs of recovery. Spending has risen sharply since pandemic restrictions were eased on October 11. Westpac card use data, released on Thursday, showed spending in NSW last week was the strongest since lockdowns began in June. The report said activity in the state was “normalising quickly.”
Separate figures show job advertising began to pick up in Sydney during September ahead of lockdowns being eased which points to strong employment growth in coming months.
The government’s strategy acknowledges this year’s economic rebound might not be as rapid as the recovery following the 2020 lockdown.
“While a speedy recovery remains likely, there is a possibility that the pace of recovery could be slower than last year due to the severity of this lockdown, potentially higher case numbers as we reopen and the resumption of international travel shifting expenditure from domestic tourism,” it said.
“A slower recovery would heighten the risk of long-term scarring, particularly in sectors unable to function at full capacity, with knock-on effects for employment. For this reason, many businesses are expected to face ongoing financial pressure well into 2022.”