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Australia’s COVID vaccination plan is too slow for economic recovery

The tortoise doesn’t win this race. When it comes to vaccinating, it is a time for action. Vaccinating Aussies is a massive part of our economic recovery strategy, and it’s going very slowly.

Australia’s vaccine rollout is stalled. We were told we’d be going in a Porsche. Instead, we’re not moving at all, just sitting there waiting for the bus. Few Australians have been vaccinated, and the government’s vaccine rollout plan is now found in the library’s fiction section. Hopes of travel and parties and international students returning to our lecture halls are going nowhere.

Cost of slow vaccine rollout

How much is it costing us? It is tough to estimate the economic upside of the vaccine being rolled out. But we can make some broad estimates.

The Australian economy was $5.5 billion smaller in December quarter 2020 than in the December quarter 2019. The air travel industry alone was $2.2 billion smaller. Vaccination of Australians isn’t going to immediately restore the economy we had, of course. People will be more confident going out and spending money, and it might help travel bubbles develop, but it won’t restore complete normality.

Let’s say eventual complete vaccination helps us win back 25 percent of what was lost. $1.8 billion per quarter (i.e., per three-month period). Every month we delay the complete vaccination costs us $460 million. Every day’s delay is $15 million. And that’s a conservative estimate. I will explain why that estimate is so conservative: it only considers the upside of helping us open up more quickly.

The goal of vaccination is not just about getting from where we are – primarily open – to a fully relaxed state. Vaccines also reduce the chance of us going backward. Remember lockdown? We could still end up back there.

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