The economic reckoning has been mitigated by federal disaster payments to individuals and state-based support for businesses, but many are falling between the cracks.
Many of the costs of lockdowns have not yet shown up in the economic data but retail sales fell 7 per cent in July and “hours worked” fell sharply in NSW. Many economists are predicting the economy will contract this quarter and unemployment will rise.
The recovery is likely to be slower than after the lockdowns last year because the national plan foresees restrictions being maintained for some time. This time, we will be “living with COVID-19”, unlike last year, when it was all but eradicated.
Calculating the economic benefit of easing restrictions is very different for Western Australia, Tasmania, Queensland and South Australia – none of whom are currently in lockdown – compared to Victoria and NSW, where people are champing at the bit to open up.
NSW will not suffer if it opens its borders to WA but if WA opens its borders it risks a significant outbreak and reimposition of restrictions. It is understandable if they are more cautious about opening their borders.
The good news is that the rapid pace of the vaccination program offers encouragement that all states will feel comfortable reopening their borders in a reasonable time-frame.
The economic pressure for them to reopen will grow with time. Queensland’s tourism industry, for instance, will not recover until borders reopen.
It might seem insensitive to even mention the economy when talking about human life, but the high costs of lockdowns must be placed in the balance in deciding when to start relaxing restrictions.
The Herald editor Lisa Davies writes a weekly newsletter exclusively for subscribers. To have it delivered to your inbox, please sign up here.