Economists assess cost of vaccine shambles

·3-min read

Shadow treasurer Jim Chalmers has slammed Scott Morrison's decision to ditch its vaccine rollout timetable, describing it as a shambles.

Economists are gauging what this setback from a delayed rollout will mean for the economy. Treasurer Josh Frydenberg won't be handing out any new forecasts until his May 11 budget.

The prime minister abandoned the rollout plan on Sunday, saying it was not possible to set such targets given the many uncertainties involved.

The government had already fallen behind in its vaccine timetable even before it was thrown into further disarray last week when health authorities recommended the AstraZeneca vaccine should not be given to people under 50 on concerns over blood clotting.

"This has been a shambles from the beginning," Dr Chalmers told Sky News on Monday.

"The government was too focused on announcements and on marketing and not enough focus on delivery and on planning."

Last week the International Monetary Fund, while upgrading its economic forecast for Australia, also warned much still depends on the "race between the virus and vaccines".

"You can't have a first-rate economic recovery with a third-rate vaccine rollout. It risks more lockdowns for longer," Dr Chalmers said.

On Sunday the government said there had been 1.16 million vaccinations so far. It originally promised four million jabs by April and a complete rollout by October.

Commonwealth Bank head of Australian economics Gareth Aird said the risks of COVID-related disruptions to economic activity have risen.

"But it does not shift the dial for domestic demand in 2021 provided any outbreaks of COVID-19 are traced and well contained and significant restrictions are not reimposed for an extended period," he said.

The McKell Institute estimates the delayed vaccine rollout risks as many as 34 more days of lockdowns into the future based on the need to have 65 per cent of the nation vaccinated for herd immunity.

Based on reported figures, it calculates the average daily cost of recent lockdowns in Sydney, Brisbane and Melbourne was $123 million.

"The delay in achieving herd immunity increases the risk of lockdowns and border closures. These policies in turn have economic costs," the report says.

Economist Chris Richardson has warned international travel for Australians is likely to remain restrictive until 2024.

The Deloitte Access Economics partner in his quarterly business outlook said he expects international borders will re-open only gradually.

For Australia, there will be some sort of quarantine remaining for incoming travellers for some time.

"That keeps international travel - both inbound and outbound - pretty weak in 2022, and it may not return to pre-pandemic levels until 2024," he said.

In the meantime, there was further positive news on the jobs market, despite concerns over the impact from the end of JobKeeper wage subsidy last month.

The National Skills Commission's preliminary figures for skilled vacancies posted on the internet jumped by a further 19.1 per cent in March to a 12-year high.

This was the 11th consecutive monthly increase in job advertisements, which now stand a staggering 96.4 per cent higher than the level recorded in March 2020, the first month to show the effects of the pandemic.

CBA is now forecasting an unemployment rate of five per cent by the end of the year compared to its previous prediction of 5.5 per cent and the 5.8 per cent recorded in February.

"The strength of the forward looking indicators of labour demand ... indicate that the expiry of JobKeeper will not be particularly problematic for the labour market as a whole," Mr Aird said.