Australia's most populous state to relax restrictions on hospitality sector

Australia's most populous state said on Friday restrictions imposed to slow the spread of coronavirus will be eased to allow cafes, restaurants and pubs to have up to 50 seated patrons as efforts to revive the stalled economy pick up pace.

New South Wales (NSW) said the easing of the restrictions which previously limited cafes and restaurants to 10 customers at a time, will begin on June 1.

"Losing 221,000 jobs in April was a disaster," state premier Gladys Berejiklian told reporters in Sydney, referring to state-wide job losses. "We don't want to see that continue.".

Australia's hospitality industry has been one of the hardest hit by social distancing restrictions imposed in March to slow the spread of coronavirus, with restaurants and cafes only able to offer takeaway services until earlier this month.

Nationally, nearly 600,000 people were in April forced out of work by the coronavirus restrictions.

Seeking to avoid a prolonged economic depression, Australia said it would spend A$130 billion between March and September to subsidise the wages of around 6 million people. About half the country's workforce is on the JobKeeper scheme.

NSW Treasurer Dominic Perrottet said about 7% of those on the scheme are from the country's hospitality sector, so relaxing restrictions would allow thousands of people to return to work.

"This is about keeping people in jobs and businesses in business. We want to breathe life into the New South Wales economy," said Perrottet.

NSW - which has recorded about half of Australia's near 7,100 COVID-19 cases - has moved quickly to reopen compared to other states.

Australia earlier this month agreed a three-step plan to remove the remaining restrictions by July, though implementation is down to state and territory leaders, who have argued over the pace of reopening state borders.

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Fitch Ratings on Friday downgraded its outlook on Australia's coveted 'AAA' rating to "negative" from "stable", citing the hit to the country's economy and public finances from the COVID-19 pandemic.

"Our measures are temporary, targeted and proportionate to the challenge we face and will ensure Australia bounces back stronger on the other side," federal Treasurer Josh Frydenberg said in an emailed statement.

Australia has also sought exemption from a requirement that travellers arriving in the UK quarantine for 14 days to prevent the spread of COVID-19.

The British government is planning a 14-day quarantine for most people arriving in the country in the coming weeks to try to prevent a second peak of the pandemic, with details to be finalised next month.

Heathrow Airport has proposed Britain should set up “travel bubbles” with low-risk countries exempt from the requirement.

"Australia has led the world in the successful containment of COVID-19, which clearly means that travellers coming from Australia would pose a low risk to the rest of the world," Trade Minister Simon Birmingham said in a statement.

Birmingham said Australia has no plans to open its borders to non-citizens, while all returning locals will still have to quarantine for two weeks upon arrival.