The 3 additional scenarios examined by the NSC enable consideration of alternative pathways for recovery, depending on the interplay of various health, economic and technological factors. These 3 scenarios are:
|Fortress Australia: Under this scenario, Australia manages to control the virus domestically through a combination of testing, tracing and isolation by 2021. However, globally the virus is not suppressed, which results in Australia keeping its international borders effectively closed until 2022. This has significant impacts on tourism (both international and domestic), international education and the imports and exports of Australia. There is also an increase in local manufacturing due to pressures on supply chains.|
|Impeded recovery: This scenario, like the Economic Restoration scenario, assumes that the virus is largely suppressed domestically by 2021 and that it is contained globally by 2022. However, the COVID-19 shock impacts on business and consumer confidence, causing businesses and households to revise their investment and consumption plans, delaying recovery.|
|Accelerated Digitisation: Again, similar to the Economic Restoration scenario, this scenario assumes that the virus is largely suppressed domestically by 2021. However, this scenario assumes that there are positive impacts associated with the adoption of digital technologies and processes, and increased working from home for professionals.|
Initial impacts flatten out across all scenarios
Similar to the Economic Restoration scenario, although the impacts of COVID-19 are stark in the short-term, over time the impacts are expected to be more evenly distributed under the other scenarios examined by the NSC. This reflects how severe the initial impacts of COVID-19 have been on the labour market.
More substantial structural change likely if digitisation accelerates
Under the Accelerated Digitisation scenario, there are positive impacts associated with the adoption of digital technologies and processes, and increased working from home for professionals. These trends lead to a number of changes in the structure of the labour market, brought about primarily by changes in how businesses operate, and the way services are delivered. This change is the most significant exhibited in all the scenarios examined by the NSC.
The scenario assumed that some of the behavioural changes that have been adopted during the pandemic will continue, including:
- increased use of digital technologies and IT services
- increased use of online shopping
- increased demand for delivery services, driving growth in transport and logistics
- lower office space requirements, due to more people working from home or remotely.
As demonstrated in Figure 25, employment in Professional Services is forecast to increase under the Accelerated Digitisation scenario due to a shift towards digital services compared to the Economic Restoration scenario. With a stronger shift to online retail and a subsequent increase in warehousing and postal requirements, Retail Trade employment is forecast to fall while employment in the Transport, Postal and Warehousing industry rises. There are also some residual benefits for Manufacturing.
Trend towards higher skilled jobs to accelerate if digitisation accelerates
Under the Accelerated Digitisation scenario, there are also impacts at an occupational level – particularly evidenced by an increase in the share of employment in higher skilled technology-based occupations. As shown in Figure 26, the number of people employed in occupations that involve technology, computing and media professionals is expected to grow in both the short-term and medium-term.
This employment growth would be offset by a fall in employment in lower skilled occupations (such as Freight Handlers and Shelf Fillers). This reflects the increased automation of routine tasks, and the shift to online retailing and warehousing. For displaced workers, skills and training development will play a crucial role in up-skilling and re-skilling workers to assist them in transitioning into the jobs that are growing.
If recovery is impeded, construction may be adversely impacted
Under the Impeded Recovery scenario, the economic downturn is prolonged and recovery delayed. This negatively impacts employment in many construction related occupations in the scenario. Male employment is also more heavily impacted, as men make up a greater proportion of employment in trade-based occupations that are common in construction.
If international borders stay closed, local manufacturing may have to increase its capacity
Under the Fortress Australia scenario, Australia manages to control the virus domestically through a combination of testing, tracing and isolation by 2021. However, globally the virus is not suppressed, resulting in Australia keeping its borders closed until 2022.
Figure 27, shows that under the Fortress Australia scenario, manufacturing performs much better. This is because pressures on supply chains divert resources into locally manufactured goods.