Here’s the rub on the COVID jab: it’s no economic magic bullet

Let’s start with the good news, which is that Australia’s economy has held up remarkably well over the summer period against both the Treasury and Reserve Bank’s expectations for it. Jobs figures provided some comfort, as do consumer confidence levels.

There is even talk among some economists that we are out the other side of this COVID recession and that a progressive relaxation of some of our central bank’s more extreme levels of support for the economy will soon be on the cards.

Illustration: Matt Davidson
Illustration: Matt DavidsonCredit:

Such talk is premature. Understandable, but premature.

Such optimism finds its roots in the sooner-than-expected availability of a wider-than-expected choice of vaccines to fight COVID-19. Emerging news this week of production problems in Europe are cause for concern, of course. But overall, progress towards a full vaccine rollout appears better than assumed in last October’s budget update, when Treasury assumed that: “A population-wide Australian COVID-19 vaccination program is … fully in place by late 2021.”

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But while undoubtedly good news, the advent of vaccines is, sadly, no magic bullet for the economy or an immediate path back to normal, as we are likely to spend 2021 finding out.

Importantly, when people talk of a “full vaccine rollout”, that does not, in fact, mean that every single Australian will be vaccinated. Treasury has certainly not assumed a 100 per cent vaccination rate, but something closer to 85 per cent.

Some Australians will refuse vaccination. It is not mandatory. Other groups are still awaiting the green light to vaccinate. Pregnant women have been told not to get the jab until further data is available.

It is also unclear whether the 6 million Australians under the age of 18 will get the jab. The government’s vaccine rollout plan currently states that under-18s will only be vaccinated “if recommended” – and that recommendation from medical authorities is still pending.

The important point is this: if not everyone is vaccinated, there remains the possibility for COVID-19 to continue circulating among the unvaccinated population. And, actually, it’s worse than that.

Many of the COVID vaccines have not been proven to stop the transmission of the virus, instead working only to stop the progression of the disease in the body of an already infected person. Which raises important questions.

Foremost: how will state premiers react to the continuing potential for transmission of the virus throughout our population, even after vaccines? Will the premiers adopt the view that, having vaccinated vulnerable populations – the old, the sick and critical workers – it is now safe to go with a “let it rip” approach to community transmission?

Or will they continue with ad hoc and inconsistent measures designed to stop the virus’s spread? The answer will determine our economy’s path back out of recession.

More so than in most other countries, Australian governments have waged a zero-tolerance war against COVID-19. All it took was one case of a virulent strain from Britain to prompt a complete shutdown of Brisbane for days. Globally, that is unprecedented.

Australians have gone to extraordinary lengths to defeat this virus. How comfortable will we be to accept that, now granny has been vaccinated, it’s time to get back to business as usual? Or will our younger populations continue to fear the spread of the virus, particularly after some sobering stories about its potential long-tail effects?

Will we continue to demand detailed contact tracing, border closures or changing regulations in response to rising cases even after vaccines are delivered?

The bottom line is that it’s unclear. It’s all pretty “complex and difficult”, as NSW Premier Gladys Berejiklian said this week.

Many Australians have been looking forward to the arrival of a vaccine to give us our path back to normality. Unfortunately, it’s not looking that simple. Our return to normality may take longer than we think and it will likely require each of us to accept a higher level of risk to our personal health from the virus than we have yet.

This will be quite the adjustment for many. Even if governments do at some point want to flick the switch to a “let it rip” mentality, it could take time for many Australians to return to life as usual.

On the crucial question of international borders, it may be years before the federal government can declare it is 100 per cent safe to reopen. Given the continued emergence of new strains of the virus, the risk of importing infections may be with us for many years to come.

And yet, an economic recovery requires us to relax the stranglehold that government restrictions have taken over economic activity. If we don’t, and we continue to let fear about the spread of the virus determine policy long after vulnerable people are protected by vaccines, the price of that fear will be paid for in jobs – in livelihoods lost.

It’s time to get vaccinated, if you can. And then it’s time to get back to business.

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Source: Thanks smh.com