Treasurer supports Snap lockdowns despite costing $3bn a week
The federal Treasurer has confirmed the importance of snap lockdowns, highlighting that the alternative would cost the country five times more in economic losses, he said in a recent press event. Treasurer Josh Frydenberg has warned that until 70 percent of all Australians have been vaccinated from COVID-19 lockdowns will remain, despite costing the economy over $3 billion a week.
Snap lockdowns remain essential
In a media briefing with the Doherty Institute, discussing Australia’s way out of the pandemic, the treasurer confirmed the high cost of remaining unvaccinated.
However, he said that even with a 50 to 60 percent vaccination rate, the national economy would still suffer five times more if a state did not contain a new outbreak of the virus by plunging into lockdown.
According to the Treasurer’s modeling, at a 50 percent vaccination rate, if governments are containing early COVID cases, the outbreak would cost the economy some $570 million a week, while at 60 percent it would cost$430 million a week.
But at a 70 percent vaccination rate, that cost, according to Mr. Frydenberg, would come down to $200 million a week, and at 80 percent the cost would be $140 million a week.
With a vaccine rollout plan that remains behind the government’s initial targets, the Treasurer reinforced the need for lockdowns.
“It is the way out of this crisis, and it is the way to avoid, in the future, longer, more severe lockdowns,” Mr. Frydenberg said.
“The second key finding or outcome from the economic analysis is that the economic cost comes down significantly if governments work quickly to get on top of the virus. This is the Prime Minister’s point. Early interventions, short, sharp lockdowns, are the most cost-effective way to handle the virus.”
However, he said that even with a 50 to 60 percent vaccination rate, the national economy would still suffer five times more if a state did not contain a new outbreak of the virus by plunging into lockdown.
According to the Treasurer’s modeling, at a 50 percent vaccination rate, if governments are containing early COVID cases, the outbreak would cost the economy some $570 million a week, while at 60 percent it would cost$430 million a week.
But at a 70 percent vaccination rate, that cost, according to Mr. Frydenberg, would come down to $200 million a week, and at 80 percent the cost would be $140 million a week.
With a vaccine rollout plan that remains behind the government’s initial targets, the Treasurer reinforced the need for lockdowns.
“It is the way out of this crisis, and it is the way to avoid, in the future, longer, more severe lockdowns,” Mr. Frydenberg said.
“The second key finding or outcome from the economic analysis is that the economic cost comes down significantly if governments work quickly to get on top of the virus. This is the Prime Minister’s point. Early interventions, short, sharp lockdowns, are the most cost-effective way to handle the virus.”
The Treasurer highlighted evidence of short, sharp lockdowns in Queensland and Victoria.
Economists, including at AMP and Commonwealth Bank, have estimated the cost of Sydney’s lockdown at around $2 billion per week. They have also ballparked Melbourne’s lockdowns at over $1 billion per week.
Mr. Frydenberg’s press briefing comes as the country faces the likelihood of a recession. The Treasurer has admitted that the country’s economic fate relies on NSW getting out of lockdown prior to the commencement of the fourth quarter.
“Now, whether or not the country has a double-dip recession largely depends on when its largest city opens back up. My expectation is that the September quarter will be negative,” Mr. Frydenberg told ABC at the end of July.
Mr. Frydenberg’s press briefing comes as the country faces the likelihood of a recession. The Treasurer has admitted that the country’s economic fate relies on NSW getting out of lockdown prior to the commencement of the fourth quarter.
“Now, whether or not the country has a double-dip recession largely depends on when its largest city opens back up. My expectation is that the September quarter will be negative,” Mr. Frydenberg told ABC at the end of July.