The Reserve Bank’s decision to cut interest rates to a record low level of 0.5 per cent reflects the serious economic impacts of the coronavirus outbreak.
There’s no doubt coronavirus is causing a global economic shock, the full impact of which is still playing out here. And while this is a fast moving situation, as of yesterday Australia had experienced only 33 cases of COVID-19, of whom 21 people have recovered.
Every member I have spoken to over the past fortnight is considering how this may play out and what may be the impacts for the property industry.
There are a couple of important points to make about the impact of coronavirus here.
Firstly, our governments are strongly focused on addressing the health challenges posed by the international outbreak. All the signs are that their early and focused action has so far been effective in containing the spread of the virus within Australia.
Our health care system is highly capable, well-resourced and prepared to respond to any further spread of the virus. We encourage members to closely follow the official advice of health authorities, including when responding to employee or customer concerns. There are excellent information resources and advice available from the Commonwealth Health Department which I commend to you.
Secondly, while acknowledging the impact of the outbreak on the domestic and global economy, and the uncertainty about how long it will continue, the RBA also highlighted the potential for the Australian economy to return to an improving trend once the health emergency has passed.
On the positive ledger, the RBA noted Australia’s low interest rates, high infrastructure spending, lower exchange rate, a positive outlook for resources and expected recoveries in residential construction and household consumption. The Federal Government has also foreshadowed a pre-budget stimulus package to help those sectors of the economy most affected by coronavirus (which will come on top of stepped-up spending for bushfire recovery).
This is certainly not a time for complacency. The economic impacts are already significant and will certainly grow. The virus does present serious health risks for Australia. It is also important for all of us to maintain our perspective and focus on helping our staff and customers manage through this coronavirus challenge.