How Sydney weathered the lockdown MUCH better than Melbourne

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Sydney has withstood the lockdowns better financially than Melbourne, Australia’s largest bank has revealed.

NSW Premier Gladys Berejiklian has deliberately allowed Sydney clothing stores and florists to remain open provided customers wear face masks inside.

Victoria went much further with her lockdown at the end of May, only allowing stores to open if customers went there to collect the goods but not trying on or inspecting them.

Both states have closed gyms and restricted restaurants to take-out only.

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Ydney has withstood the lockdowns better financially than Melbourne, Australia’s largest bank has revealed. NSW Premier Gladys Berejiklian has voluntarily allowed Sydney clothing stores and florists to remain open provided customers wear face masks indoors

New data from the Commonwealth Bank showed a big difference between the two approaches.

Credit card spending in New South Wales fell just 1.2 percentage points in the first week of closure, ending July 2.

By comparison, card spending in Victoria plunged 21 percentage points much deeper, in the first week of lockdown that began on May 28.

The one-week instant lockdown in Melbourne spanned two weeks, and there are fears that Sydney’s two-week lockdown may be extended with 18 new cases registered overnight.

Belinda Allen, a senior economist at the Commonwealth Bank, said the results showed that a proportionate response to lockdowns could minimize the financial burden on businesses.

Credit card spending in New South Wales fell just 1.2 percentage points in the first week of closures, ending July 2.  By comparison, card spending in Victoria (Melbourne's Lygon Street pictured) plunged 21 percentage points to much more lockdown week that began on May 28

Credit card spending in New South Wales fell just 1.2 percentage points in the first week of closings, ending July 2. By comparison, card spending in Victoria (Melbourne’s Lygon Street pictured) plunged 21 percentage points to much more week of lockdown that began on May 28

“It’s a satisfying result and it’s somewhat surprising that we haven’t seen more impact on spending in New South Wales,” she said.

“What this data shows is that the type of foreclosure is important to spending, as is community response.”

Ms Berejiklian was forced to defend NSW’s less draconian approach after a reporter asked on Sunday why florists were still allowed to trade during closures in Sydney, the Blue Mountains, the Central Coast and Wollongong.

“New South Wales, unlike other states, has never determined what is essential and what is not for business,” she said.

“We have the exact same rules as last time, so any suggestion that these rules are different from last time is not correct.”

The Reserve Bank of Australia kept interest rates at a record 0.1% on Tuesday, but revealed that since the start of the pandemic it has provided banks with $ 188 billion to provide home loans and ultra-cheap shopping.  Pictured is Sydney's Queen Victoria Building during the lockdown

The Reserve Bank of Australia kept interest rates at a record 0.1% on Tuesday, but revealed that since the start of the pandemic it had provided banks with $ 188 billion to provide home loans and ultra-cheap commercial. Pictured is Sydney’s Queen Victoria Building during the lockdown

The Reserve Bank of Australia kept interest rates at a record 0.1% on Tuesday, but revealed that it had, since the start of the pandemic, provided banks with $ 188 billion to provide super-cheap home and business loans.

The central bank’s term finance facility stopped disbursing funds at the end of June, although banks will continue to offer mortgage rates below 2% until 2024.

Governor Philip Lowe noted that the lockdowns were disrupting economic recovery.

“The short-term uncertainty is the effect of recent virus outbreaks and lockdowns,” he said.

Reserve Bank of Australia Governor Philip Lowe noted that lockdowns (pictured Auburn in western Sydney) were disrupting economic recovery

Reserve Bank of Australia Governor Philip Lowe noted that lockdowns (pictured by Auburn in western Sydney) were disrupting economic recovery

“But the experience to date has been that once epidemics are contained and restrictions are relaxed, the economy rebounds quickly.”

EY chief economist Jo Masters said the RBA was likely to hike the cash rate ahead of the promised 2024 data, with banks already setting up their fixed rate loans.

“If the economic recovery continues to surprise on the upside, the RBA will need to act on the cash rate earlier than current expectations,” she said.

Still, the Sydney lockdowns hit consumer confidence with an ANZ-Roy Morgan measure, during the week through July 4, showing an 8.9% drop.

The equivalent reading of consumer confidence in Melbourne fell 2.7% even as restrictions in Victoria were relaxed, with no cases transmitted locally.


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