Successfully managing the covid-19 crisis will allow Australia to recover faster than most G20 countries. However, the growth of the economy will be hindered both by the continued closed international borders and by the abrupt closure of borders between individual Australian states following the detected cases of covid-19.
After the first recession in 21 years in the first half of 2020, the Australian economy grew by 3% in 3Q and 4Q 2020, with 1.8% economic growth expected in 2021. Travel restrictions will significantly affect tourism and education in particular.
The economy is dependent on raw material exports – iron ore, coal and liquefied gas made up more than half of Australia’s exports in 2019. In particular, the strained relations with China remain a challenge – Australia will continue efforts to diversify international trade and strengthen ties with the US, India, Japan and the EU.
The Australian administration will continue to support coal mining and the approach to addressing climate change will remain insufficient compared to G20 partners, but will also seek to include gas as a transit fuel and implement new technologies in the transition to a zero-emission economy.
In March 2020, the government announced rescue packages to deal with the consequences of the covid-19 pandemic, totaling AUD 320 billion (16.4% of annual GDP). This involved support for companies to retain employees (JobKeeper), as well as a wide range of other forms of support for SMEs and households or the provision of health services.
As of March 2021, total announced support (federal and state and territory) is AUD 327 billion over the 2020-2024 period (of which AUD 267 billion is federal). Investments in infrastructure will remain the government’s main priority for a faster economic recovery, while the government will also support business with incentives and tax breaks. A higher degree of supervision over foreign investments will continue to be applied due to the protection of the national interest.
Post-covid-19 opportunities for foreign exporters
Mining, mining and oil industry
According to allcountrylist, Australia is an important global exporter of a wide range of mineral resources (bauxite, iron ore, aluminum, gold, silver, coal, nickel, natural gas, crude oil). In early 2020, Australia became the largest exporter of liquefied natural gas. Chinese demand for high-grade iron ore will continue.
Australia will continue to secure an increased share of world rare earth mining. Australian miners are implementing new automation, maintenance and quality control technologies. Demand for mining equipment and related products will remain long-term in Australia.
In 2019, renewable sources accounted for 22% of electricity production. Australia’s Technology Roadmap lists hydrogen, batteries, carbon dioxide separation, capture and storage, green steel and soil carbon as priority supported technologies on the path to reducing emissions. He includes increased energy efficiency, charging infrastructure for electric and hydrogen vehicles in the second category of emerging technologies, and nuclear technologies in the third category.
The fourth category includes already advanced technologies – coal, gas, wind and solar solutions; the government does not intend to further invest in these technologies. At the same time, the prime minister announced a retreat from burning coal to more intensive use of gas as a transit energy source during the transition to renewable sources.
The government will support the opening of new fields and the construction of additional gas infrastructure, which is already developed thanks to the large-scale export of LNG and can serve in the future in the transition to hydrogen. There are opportunities for Czech companies that are engaged in the production of mining components and related equipment and equipment for conducting natural gas, but also hydrogen; renewable resources especially from the priority group of emerging technologies and green technologies in general.
For example, although the home solar market is already saturated, demand for home battery storage and related solutions such as shared grids remains high. Due to the huge agricultural overproduction, interest in solutions using biomass burning can also be assumed.
Due to numerous foreign cyber attacks, Australia has a significant interest in further strengthening cyber security and digital infrastructure in general. Limiting face-to-face contact during the pandemic has accelerated the rise of digital solutions including health and education services – Australian universities are dependent on international students, with higher education one of the sectors most affected.
Restrictions have contributed to increased interest in the use of e-commerce resources, solutions for remote access and collaboration, online entertainment, and at the same time new solutions are being implemented in the healthcare sector. The Australian government’s “Digital Business Plan” considers the revision of digital identity systems to be one of the key elements of digital transformation.
Water management and waste industry
Despite the general lack of water resources in some parts of the country, Australia has a developed water management structure and continues to build irrigation systems, dams, desalination plants. The main challenges for Australian water managers will remain the increasing demand due to population growth, climate change and extreme climate and weather events – a period of prolonged drought culminated in devastating fires on the east coast of Australia at the turn of 2019/2020, on the other hand, New South Wales was affected by extensive flooding in March 2020.
Technologies and innovations helping to expand infrastructure and ensure safe sources of drinking water will continue to be in demand. The waste and recycling industry is less developed compared to the EU, the Australian government, as part of the National Waste Policy Action Plan, supports limiting the export of waste and building recycling capacities, which offers opportunities for Czech companies in the field of sorting and recycling solutions.
Agricultural and food industry
Australia will continue to be a major exporter of agricultural products and food. Australian agriculture is very developed, agricultural production and food are of high quality, two-thirds of production is exported – mainly to Asia, but also to the USA and the EU.
The most exported grain, wool, wine, meat, milk and dairy products, seafood. Mainly non-alcoholic beverages and syrups, alcoholic beverages, confectionery and fats and oils are imported. There will continue to be potential for the import of agricultural machinery and machinery for the processing industry – packaging, capping, labeling lines.