A new wave of COVID-19 would be “incredibly devastating” for the economy as the previous stimulus measures would be unable to be put in place again, according to the Grattan Institute.
Speaking at the Tax Institute’s Financial Services Conference, Grattan Institute chief executive, Danielle Wood, said vaccine take-up was crucial despite delays to the rollout and fears around the AstraZeneca vaccine.
Currently, the AstraZeneca vaccine was only being offered to those who were over 50 and those who were younger had to wait for supplies of Pfizer which was hindering the abilities of the country to successfully vaccinate its population in large volumes.
If the problems with the rollout led to another wave of the virus, this would be “incredibly devastating” for the economy and undo success achieved in 2020. The reason for this that it was “no longer possible within the range of conventional tools” to offer the same volume of stimulus could be offered by the Government as was offered during the pandemic in 2020.
Some $200 billion was saved by households during the pandemic through substantial Government support and subsidy schemes such as JobKeeper and JobSeeker.
“While we don’t have herd immunity, there is a chance it gets out and we face another wave. That would obviously be incredibly devastating for confidence, for the economy, in a world where a lot of those Government safety nets have now come off,” Wood said.
If necessary, “serious carrots and sticks” would be needed to be offered to encourage people to take up the vaccine and avoid another wave.
Opinion about the economic impact of the vaccine delay has been mixed lately with research from the McKell Institute estimating it could cost economy some $4 billion in a worst-case scenario. However, J.P. Morgan Asset Management global market strategist, Kerry Craig, said it was “unlikely to have a detrimental effect on GDP” as it would only likely be short delay of a few months.