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State of confidence is Key: Economic indicators show the pandemic recovery...

23 Feb 2021

Confidence is an enigma, a way of being rather than an emotion.

US quarterback and seven-time Super Bowl champ Tom Brady exudes it in spades.

Despite falling short at the Australian Open last week tennis star Ash Barty is the living embodiment of “quiet confidence”.

For much of his career golfing great Greg Norman was confidence personified, but when it evaporated, as it did a quarter of a century ago at the 1996 US Masters, the Shark’s implosion and loss of confidence was tragic to behold.

So it was in 2020, with COVID-19 leaving the global economy out in the cold, like a rejected suitor left holding a bunch of roses on Valentine’s Day.

For consumers and businesses, the shock of lockdowns, border restrictions and ongoing uncertainty was a disaster for confidence.

As the horrors of 2020 begin to recede in the rear-view mirror, NSW looks to be on the up-and-up once again.

The Westpac-Melbourne Institute consumer sentiment index climbed 3.5 per cent in February to reach 111.7 index points. When compared to the same time last year, the index has climbed 20 per cent in NSW.

The NAB business confidence index is also firmly positive, after the pandemic drove it down to the lowest levels since records began.

This is extraordinary. Barely eight months after the most severe economic contraction in three decades, confidence in economic conditions for the year ahead is higher than at any point in the last seven.

The latest jobs figures released last week offer more hope. Although 53,144 people are still out of work in compared to a year ago, the current unemployment rate in NSW last week dropped to 6 per cent.

This is lower than the national rate of 6.4 per cent, and considerably below the double digit figures which was feared when the pandemic first struck.

Many challenges remain, and jobs is a top focus for the Government, but a renewed sense of optimism is a testament to the indomitable spirit of the people of NSW.

Confidence is a vital driver of economic activity. So the rebound is good news for the bottom line, but it hasn’t just happened by chance.

Australia is among a select group of countries to have kept the spread of the COVID-19 virus relatively under control. In Europe, the USA and various other hotspots, daily new cases are still being counted in the thousands, while here we fret about one or two.

In NSW the prowess of our health system – and most importantly, the amazing NSW Health personnel who have kept raising the bar for testing and contact tracing – has undoubtedly boosted confidence, demonstrating a consistent ability to contain outbreaks as they arise such as on the Northern Beaches at Christmas.

The approach taken by our Government in tackling both the health and economic challenges has been very much geared towards giving the people of our state as much confidence as possible in the most uncertain period in living memory.

The impact of a snap five-day lockdown in Victoria was a stark reminder of the constant challenges of COVID and how far and wide decisions made by Governments are felt.

Metung is a picturesque town in East Gippsland about 300 kilometres from Melbourne’s quarantine hotels. It was once a favoured bolt hole for country legend Slim Dusty back in the day.

When local publican David Strange was interviewed by Melbourne radio station 3AW, his frustration at being locked down again was palpable.

“We are going to have outbreaks of this thing for the next 12 months, I’m sure, and you can’t just say the ‘science says close the state’ and we close it,” he said.

Sky News reported that on day one of the Victorian lockdown Lifeline received the third highest number of daily calls in its 60-year history.

The challenge for every Government remains the need to balance the health response with the social and economic consequences with every decision we make.

That’s what is driving our approach, and it’s an important factor in ensuring the people of NSW can face the future with optimism, determination and confidence.

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