Australia Warns State Border Closures Are Slowing Jobs Recovery

(Bloomberg) -- More than half of the 1.3 million Australians who lost their jobs or were stood down at the start of the pandemic are back in work, though the recovery is being hampered by state border closures, Treasurer Josh Frydenberg said.

Almost 700,000 people have gained effective employment since April, Frydenberg said in a statement.

Still, Australia’s effective unemployment rate will exceed 13% in coming months, up from 9.9% in July, as 450,000 people lose work in August and September, Treasury modeling showed. Most of those job losses are in Victoria, according to the analysis.

“There is still a long way to go through this crisis,” Frydenberg said. “Data is showing signs that the jobs recovery may be slowing as state border closures have been tightened.”

The border closures are popular with state leaders, with polling showing they are heavily supported by voters. But they are hampering Prime Minister Scott Morrison’s bid to reopen the economy, which has entered a recession.

Apart from the damage to the tourism industry, the closures are creating chaos for people in towns straddling the border, who need to regularly cross for work or to access medical care. There is also a human cost, with local media reporting on people who have been denied permission to travel interstate to visit dying relatives.

State premiers have sealed off their territories to limit the spread of the virus. They’re now facing growing calls to loosen restrictions where possible as the economic cost of the crisis mounts. Qantas Airways Ltd. Chief Executive Officer Alan Joyce last week joined calls for clearer border rules as the carrier swung to its first loss in six years.

Queensland Premier Annastacia Palaszczuk, who has shut her borders to New South Wales, Victoria and the Australian Capital Territory, on Thursday signaled she’d make closures an issue in her campaign for the state’s Oct. 31 election.

After Saturday’s election in the Northern Territory, Chief Minister Michael Gunner claimed he was on track to win enough seats to form government. He’s said border restrictions may stay in place for 18 months, effectively cutting off tourism to places such as Uluru and Kakadu National Park.

The border between Victoria, which has locked down Melbourne after a flareup of cases, and New South Wales is also closed, with certain exemptions. Tasmania’s border will remain closed until at least December.

©2020 Bloomberg L.P.