COVID-19 Economic Recovery Strategy

As of October 2021, NSW faces a formidable task: to restart its economy, recover the ground lost, restore jobs and return to growth as quickly as possible, overcoming the considerable impact of the 2021 outbreak of the COVID-19 Delta variant. 

To date, this outbreak and associated public health restrictions have caused the loss of around 235,000 jobs in NSW between June and September 2021, while the number of hours worked has declined by 11 per cent over the same period. 

Overall, the NSW economy is estimated to contract in line with total hours in the September quarter. The data underscores the scale of the challenge ahead, but recent history suggests that NSW is more than capable of rising to meet it. 

Between April and July 2020, following the initial outbreak of the COVID-19 pandemic, NSW experienced a large fall in economic activity. However, the pace and strength of the subsequent recovery exceeded all expectations, with both employment and economic activity surpassing pre-COVID levels within a year.

While the impact of the winter 2021 Delta outbreak has been more pronounced, the rapid development and deployment of effective vaccines has enabled the State to look to the future with greater certainty. 

As vaccination targets are met, restrictions on movement and economic activity are being steadily eased in accordance with the Roadmap. As restrictions lift, the economy is expected to rebound quickly as businesses eagerly reopen and consumers re-emerge and unleash spending that was delayed during the lockdown period. 

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. 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. 

In light of these challenges, this strategy works alongside the Roadmap, pursuing three key objectives to ensure the people and businesses of NSW have the support they need to sustain a safe, robust and rapid recovery. The first objective is to secure a strong rebound with temporary and targeted stimulus and support measures aimed at encouraging economic activity, building confidence, and supporting the restoration and creation of jobs for the people of NSW (Box 1).