One of the Longest Covid-Zero Holdouts Reopens in Australia

(Bloomberg) -- The shrinking Covid Zero club just lost another member.

Western Australia finally reopened its borders to vaccinated travelers on Thursday, after almost two years of closures that were intended to stamp out the coronavirus. That means the entire continent is now once again open to tourists and foreign workers.

The removal of the hard border comes as a relief for many families who have been separated by strict travel bans, and for employers in the state's lucrative mining sector who have struggled to fill vacancies as workers have been prevented traveling from interstate and overseas.

It brings the state, home to more than 2.6 million people, in line with most of the rest of the world, leaving just Hong Kong and China with effectively closed borders and strict quarantine regimes as more transmissible variants like omicron starkly show the limits of the Covid Zero strategy.

New Zealand, which has also retained a hard border, this week announced it would drop the self-isolation requirement for vaccinated citizens coming from Australia, amid its own wave of Covid-19 cases. The country is due to open to Australians by July and to all other tourists by October.

Border Blockades Spark Australia's Biggest Crisis in 120 Years

While most other Australian states' borders gradually reopened in 2021 as the delta and omicron outbreaks took hold and vaccination rates rose, WA stayed closed as its cases remained near zero for most of the pandemic. Australia reopened its international border to vaccinated tourists on Feb. 21., and has a double vaccination rate of more than 94% for people aged 16 and over.

WA's daily Covid-19 cases are at record levels, though low by global standards, as the omicron variant spreads. On Wednesday, the state introduced new limits on non-urgent surgeries as it prepares its hospitals for a surge in infections, and has also ramped up mask rules and capacity limits for hospitality venues.

“We are expecting hospitalizations to climb rapidly in the coming weeks,” Premier Mark McGowan told reporters Wednesday. “With the WA border reopening in full tomorrow, we know that case numbers will start to climb even further.”

Labor Shortage

Western Australia's closure sparked an acute labor shortage in the state, where the unemployment rate tumbled to 3.7% in January. That compared with the national rate of 4.2% and pre-pandemic levels of well above 5%.

“The border reopening will definitely help in easing some of the labor shortages.,” said Diana Mousina, senior economist at AMP Capital Markets. “It will also mean welcoming tourism will be easier as all states are now open. It's a confidence booster.”

Mining bosses including BHP Group's Mike Henry and Fortescue Metals Group's Elizabeth Gaines have welcomed the reopening, saying the risks to their operations are manageable. All workers flying in to remote mine sites are required by the state to have been vaccinated, while BHP and Rio Tinto have mandatory vaccination policies in place across their operations there.

“The reopening of WA's border is likely to unlock a recovery of inbound interstate migration, and just in time,” said Bloomberg Economics's economist James McIntyre. The “state is on verge of a pickup in mining investment activity, which is unlikely to be possible without access to skilled labor from interstate, and overseas,” he said.