Two giant steps happened yesterday taking Australia back towards our once under-appreciated pre-pandemic normality. And more will follow, which will not only deliver far more freedom but greater economic growth, jobs and income, as well as higher interest rates.

Sorry, but economics seldom delivers all good news, which explains why it can be called the dismal science!

But let’s concentrate on the pluses ahead, pluses so good that the Reserve Bank will have to begin raising interest rates prior to its much-heralded 2024 start date.

The first step came courtesy of the new NSW Premier Dominic Perrottet, who brought forward the end of many restrictions that were pencilled in to stop on  December 1 but now will kick in on November 8.

Of course, these freedoms are for the fully vaccinated residents of NSW but they show what’s likely for Victorians soon. Ultimately, these steps forward towards normalcy will pressure other states to re-join the rest of Australia embracing normalcy.

So what are these changes? Here’s a list, courtesy of the Daily Telegraph:

1. Density limits inside venues and hospitality businesses will now be one person per two square metres.

2. Capacity limits will be lifted, except for gyms and dance classes which will stay at 20 people per class.

3. Dancing will be allowed at nightclubs.

4. The number of guests to a home and outdoor gathering numbers will be uncapped.

5. Covid-safe plans remain for gatherings of more than 1,000 people.

6. Indoor pools can reopen.

7. Play centres and amusement centres can reopen.

8. Stadiums can enjoy 100% capacity.

However, “mask rules for indoor settings will remain in place until December 15 or until NSW reaches a 95 per cent fully vaccinated target,” the Tele explained.

The unvaccinated will have to December 15 or until 95% of the state’s population is vaccinated before they can be welcomed back. Until that time, these ‘outsiders’ remain barred from non-essential retail, dining at hospitality venues or travelling throughout regional NSW.

The Premier effectively has said this is the best-case scenario plan but if a serious outbreak happens, “targeted restrictions” could be reinstated. This reality underlines the importance of these decisions to confidence, growth and jobs. It also shows all these economic pluses are still vulnerable to restraints that will threaten both the economy and freedom.

NSW has 88.3% of its population double-jabbed and 93.65% have had one vaccination.

This important ‘freedom day 202’ announcement coincided with the Reserve Bank giving economists (who watch every word RBA Governor Phil Lowe utters) every indication that it is backing away from the 2024 prediction of when the cash rate rises from 0.1%.

One such Lowe-watcher is AMP Capital’s chief economist, Dr Shane Oliver. Given the RBA’s revelations yesterday, this is what he now thinks: “While rate hikes are still a fair way off and monetary policy will likely be easy for a while yet, the removal of the 0.1% April 2024 yield target implies more upwards pressure on 2- and 3-year fixed mortgage rates.”

When does he think rates will rise?

“Our assessment is that the conditions for the first rate hike (inflation sustainably in target, full employment and 3% or more wages growth) will be in place in about a year and see the first hike coming in November next year taking the cash rate to 0.25%, followed by another hike to 0.5% in December next year.”

Over the next six months, this freedom will also bring an economic boom, plenty of jobs, businesses happy to invest, rising stock prices, good super returns, gradually more local and foreign tourists, as well as surging confidence.

We saw that yesterday as well with the weekly ANZ-Roy Morgan consumer confidence rating rise by 1.5% to a 16-week high of 108.4. And provided any new strain of this virus doesn’t trump this economic comeback, I’d say 2022 and 2023 will be economic boom years driven by the reinstatement of normalcy!