“But there’s also a light at the end of the tunnel for those millions of Australians who are now doing it tough,” he said.
It’s not just federal assistance going into the economy, with growing expectations the Reserve Bank will have to drop its plans to gradually wind back its quantitative easing program due to the financial fallout from lockdowns.
The bank is due to start reducing government debt purchases to $4 billion from $5 billion next month.
But Deutsche Bank’s chief economist in Australia, Phil O’Donaghoe, said the lockdowns – particularly their impact on Victoria on top of NSW – would force the RBA into changing its mind.
“Even with strict lockdown measures in place, Sydney’s experience suggests it would be an incredibly brave central banker to take an optimistic view on where Victoria’s case numbers are going to head in coming weeks, if not months,” he said.
“That has obvious implications for how long current lockdown measures will remain in place.“
At the weekend, ACT Chief Minister Andrew Barr said he did not believe the federal government would deny financial support to a state or territory forced into lockdown ahead of the next election, due by May next year.
Pressed today on Mr Barr’s comments, the Prime Minister declined to outline what the government would do if lockdowns were still being used even after the 70 per cent and 80 per cent vaccination targets were reached.
“Why wouldn’t people want to open up the country when we hit 70 and 80 per cent? … That’s my point. We’ve agreed a national plan at 70 and 80 per cent based on the best possible medical advice, best possible scientific advice, and best possible economic advice,” he said.
“We have been told very clearly that lockdowns, once you move past that level, come at more cost than gain.“