COVID has created havoc across the planet affecting the community’s health, causing death, and economic turmoil. Newcastle is no different and has suffered as a result of the new virus afflicting the world. While Newcastle City is looking a little better now, taking a walk down Hunter Street a few weeks ago was like walking through a ghost town, the shiny new trams ran empty, you could park anywhere and shops and eateries were sealed shut. A distinctly different scene from a buzzing metropolis planned for in Australia’s seventh biggest city.

As COVID passes, what does the future hold for Newcastle?  This question is on a lot of minds, but it is not an easy question to answer, largely because there is still so much uncertainty in how COVID is going to affect the world in the months and years to come. Here are some ideas though only the future will show what really happens:


Economic Retraction and Job Losses

Employment Figures

It is already clear that job losses have been significant across Australia. Last week’s unemployment data showed a significant, although expected rise.  The figures were better than expected and this is likely to be a product of the Job Keeper payments aimed at keeping people employed.  However, many of these people are effectively unemployed, it is just that their benefits are administered by their ‘employer’ rather than Centrelink, but they are still not working. If these people were included, the unemployment rates would be a lot higher. This is perhaps not that important, what is important is what happens next.

Next Steps

The government hopes that those maintained on Job Keeper payments will be able to return to work with their employers when they re-open for work. The actual number of companies who simply restart their employees remains to be seen. Some of those companies while find it difficult to keep going because of serious cashflow problems, and even if they can restart, they may find it hard to maintain their operations for long before finally failing and closing. Those jobs will be lost. Other companies will have had to restructure for the same reasons, and others still will restructure themselves as they try new ways of working and find that they need less staff to get their work done.

The picture specific to Newcastle will probably be much the same as in other parts of the country. Those who have been in office-based jobs, where it is possible to work from home, may be in the best position, and might even find that they are able to enjoy more flexible working conditions.

For most others though, it may be more difficult. Retailing requires consumer demand and without that demand Newcastle’s retailers will have smaller profits, or worse still, generate losses. This will flow on to reduce the employment levels in the retail sector. Those in manufacturing will experience similar problems though some areas may be protected, especially if they are servicing parts of the economy that are not likely to be severely affected by COVID. Mining and coal might fit into this category though these industries may be affected by the growing concerns over the environment.


How You Work

There is already a lot of discussion about how COVID will change the way people work in the future. For some, it will have no real affect, but for others, it will have large affects.

Social Distancing Issues & Entertainment

Social distancing will be a part of life for some time to come, indeed with the observation of ‘COVID phobia’ causing people to be more fearful of spending time in close proximity with others.

It is still unclear how this is going to impact people in the entertainment, food, and wine industries. Newcastle has a large number of establishments to eat and drink and enjoy time with friends. The current limitations will make it hard if not impossible for many of those establishments to run successfully. It is likely that there will be some further relaxation, but it will not be fast and again, it is going to be hard to know if those businesses can withstand the pain long enough to stay in business. Undoubtedly, people employed in these areas will be facing reduced opportunities for the time being.

On the Upside

Those who working in places where they have learnt to work from home, at least to some extent, may find that this will continue and lead to an improvement in their lifestyle. A lot of companies who have been functioning this way have realised that it works and a recent survey showed that 87% of businesses using working from home strategies are interesting in permanently implementing this as part of their work culture in a post-COVID world.


How Long Will It Last?

This is a key question and while there are some variables, this is not the first recession or pandemic the world has experienced.

Spanish Flu

A lot of talk has occurred around the Spanish flu, but it did not occur in isolation. The Spanish Flu epidemic started near the end of WWI which undoubtedly helped its spread at the time. Medical treatment was not what it is today and the death tolls around the world were high, as many as 50M people died.  Following the war and the flu, the world struggled to regain its composure, and, after a few apparently reasonable years, the great depression followed and its effects lasted well into the 1930’s with the build-up and after effects of WWII dominating the picture for the next decade or more.

The Australian Recession – 1991

Australia experienced a recession, famously described by Paul Keating as ‘the recession we had to have‘. This led to unemployment rates rising to a high of 10.8%.  It took the Australian economy ten years to return to pre-recession levels.


Unlike a lot of other countries, Australia managed to avoid a recession during the GFC although unemployment rates rose from 4% to 6% during the GFC.  They had not returned to pre-GFC levels when the COVID pandemic started.

The COVID-19 Pandemic

At the moment, the official unemployment rate has risen from 5% to 6.8% but this will be an underestimate as it does not consider under-employment or those on Job Seeker payments who are not actually working. It would not be hard to imagine that the true unemployment rate is 10% and some commentators are predicting the real rates could go north of 12 or 15%. The main concern then is, how long will it take for things to return to normal? Based on the experiences of the last one hundred years, we could be in for a long hard slog. During this time there will be structural changes affecting employment and industry.


Can We Recover?

Newcastle has shown itself to be a resilient centre. Over the years it has demonstrated a propensity to adapt to significant changes because of momentous changes in the employment landscape as industries like BHP grew and then vanished. There is no doubt that Newcastle will be affected by COVID like the rest of the world, but there is also no doubt that it will evolve to meet the change, just as it has before.


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