The long road to Sydney’s economic recovery

By ALLISON HORE

With COVID-19 hitting the city’s economy hard there is a long road ahead to economic recovery. 

On Thursday it was announced that Australia had officially entered a recession for the first time in three decades. The country’s economy went backwards for two consecutive quarters, the commonly accepted definition of a recession. 

This is the first time negative growth has been observed for two quarters since 1991, but the scale of the recession is significantly greater this time around. The June quarter’s GDP numbers indicate the economy went backwards by 7% and figures from the March quarter showed a drop by 0.3%. This fall- as a result of widespread lockdowns, closures and social isolation- was slightly worse than most economists had predicted. 

The COVID-19 crisis has hit particularly in Sydney’s city center which relies on workers commuting in and out each day, something work from home orders and fears about the spread of the virus have all but stopped. 

This has led to a significant downturn in activity across the hospitality, arts and retail industries which SGS Economics and Planning economist Terry Rawnsley estimates will cost the CBD $7 billion. On top of that, he estimates the lack of interaction between knowledge workers will lead to a $3 billion loss in productivity.

Last year, the CBD alone generated $140 billion which accounts for 7% of Australia’s GDP or 20% of the state’s economic activity. 

The Sydney Business Chamber says the State and local Governments should collaborate with the business sector to create and put into action a plan to revive the state’s struggling economy. 670,000 jobs 

With such a blow to the city’s economy, what does a pathway to recovery look like?

Katherine O’Regan, Executive Director of the Sydney Business Chamber, said that both long term and short term solutions must be put into action to help the CBD’s economy recover.

“The Covid crisis has taken people out of city offices, shops and streets, causing major disruption to this vital ecosystem and for it to recover, there needs to be both quick fixes and longer term changes to work patterns and land use of both public and private spaces,” she said.

The Sydney Business Chamber points to five key areas they think will aid in the recovery of the city’s CBD. The first measure they point to is encouraging flexible hours of work so that not everyone is commuting at the same time, thus reducing anxiety about crowds on public transport and traffic congestion. The chamber says for this to work, cafes and restaurants servicing workers which would usually shut at 4pm on a weekday as well as libraries and government services would have to stay open later. More modes of active transport and safer public transport would also reduce pressure on commuters, the Chamber says. 

Turning Sydney into a destination for not just international travellers, but also domestic and local tourists, was also highlighted as keys for the city’s economic recovery. The Sydney Business Chamber says live entertainment events, street festivals and pop-up food fairs could be held across many locations, instead of one central location, so that crowds do not deter people from attending.

Ms. O’Regan thinks post-COVID changes like this would not only help to boost the city’s economy but also change its character for the better.

“A clear pathway for the CBD’s recovery and revitalization can provide a real opportunity to shape Sydney as a truly global 24-hour City,” she said.

The City of Sydney council is also thinking about what the local government area’s economy will look like after the pandemic and what can be done to help it recover. To aid in this, the council is pushing their scheme which offers funding for businesses looking to share and strengthen their skills. 

Through the scheme, grants of up to $40,000 are offered to for-profit and not-for-profit organisations to share knowledge, expertise and resources with the aim of bolstering the city’s economic, social, environmental and cultural sectors and supporting the local area’s Covid-19 recovery. 

Sydney’s Lord Mayor Clover Moore said the “vital industry knowledge” made more accessible through this program was more important than in the context of recovering from the ongoing pandemic.

“Now more than ever our local businesses and community organisations need access to support and services that will help them grow and thrive, which is why we’ve developed this targeted sponsorship program,” she said.

Applications for the grants close on the 21st of September and more information about the program can be found on the City of Sydney’s website.