Staff shortages batter Australian economy as Covid surge leaves half of some companies’ employees unable to work

Staff shortages caused by Covid are pummelling the Australian economy, emptying supermarket shelves and closing shops and restaurants amid renewed calls for rapid antigen tests to be made free in workplaces.

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Photograph: Joel Carrett/AAP

While there is no hard data on how many people are off work because they have Covid, are isolating due to being a close contact or are waiting for a test, some companies are reporting that half of their employees are unable to attend.

Related: Australian supermarkets grapple with Covid-based staff shortages

Trucking and logistics are particularly hard-hit, as is the meat industry, which this week warned of shortages unless slaughterhouses and boning rooms were either exempted from health orders prohibiting close contacts from working or provided with Covid tests.

There are empty spaces on supermarket shelves in every department of the two big supermarkets, Coles and Woolworths, as staff shortages hit every part of the supply chain from suppliers through to transport companies and the chains’ own distribution centres, which send products to individual stores.

In a return to measures last seen at the height of the first wave in 2020, Coles has limited sales of mince, sausages, chicken breasts and chicken thighs to one packet per customer in order to stop panic buying. Woolworths has yet to bring in buying limits.

Supermarkets are also reducing the range of products they sell in order to make life easier for their suppliers.

There are fears within the supermarket industry that some stores may be forced to shut or reduce their hours due to workers being unavailable.

While loosened close contact rules have made it easier to keep people at work, this extra capacity has been overwhelmed by the skyrocketing number of Covid cases, which climbed past 68,000 across Australia on Thursday.

Scott Morrison said testing requirements for truck drivers had been watered down in a bid to ease the strain on the logistics system while the treasurer, Josh Frydenberg, has spoken to supermarket bosses about the crisis.

The prime minister admitted the rolling staff shortages were taking a toll on the economy and said the federal government was focused on increasing capacity in critical areas including healthcare, distribution centres, food production and transport.

Related: Victorians forced to report positive RAT results to health department and isolate for seven days

“We need truck drivers to keep on trucking, that is what we need to do to keep moving things around,” Morrison said. “And right now they are delivering vaccines to GPs and pharmacists, and that system is of course under strain because of the high case numbers.”

The prime minister has also asked the attorney general, Michaelia Cash, to meet with state governments to discuss loosening laws that require employers to maintain a safe workplace so that small business does not have to bear the cost of buying rapid antigen tests (RATs), the price of which has skyrocketed due to soaring demand and limited supply.

A spokesman for Cash said the Morrison government “will work with state and territory governments to provide clarity to employers on rapid antigen testing requirements under WHS [work health and safety] laws”.

“The attorney general is reaching out to WHS ministers to progress this work.”

Unions strongly opposed the idea, which they doubt is practical, and repeated their call for the government to provide free RATs for small businesses.

The acting secretary of the Australian Council of Trade Unions, Liam O’Brien, said all workers were entitled to the same level of protection at work as Morrison, who on Wednesday said he was able to get RATs provided to workers at the Department of Prime Minister and Cabinet because he was “an employee in this building, like everybody else”.

O’Brien attacked Morrison for failing to buy enough RATs despite the warning, given by unions and businesses in October, that they would be needed once restrictions were reduced and face-to-face commerce resumed.

“On the one hand he’s entitled to this very safe workplace [but] because he’s failed to do his job in securing enough tests for the nation, the rest of us are expected to work in less safe conditions,” O’Brien said.

Related: ‘We’re struggling’: Covid surge spoils summer for Australia’s hospitality and tourism businesses

“If we’re going to start to remove the obligations on employers to introduce rapid testing, not only are we going to see more workplace outbreaks, which is going to lead to more people getting Covid, but as we’re seeing right now, we’re going to see businesses shutting down.”

He said workplace health and safety laws were under the control of the states, not the federal government.

“I don’t think it is possible or practical for him [Morrison] to amend eight different pieces of state legislation,” he said.

It seems that Morrison is saying instead of providing free tests for workers and employers, he will weaken health and safety protections for workers because that’s what employers want! We will see about that.

— Sally McManus (@sallymcmanus)

January 5, 2022

The union that represents employed chemists, Professional Pharmacists Australia, said a plan announced by Morrison to hand out up to 10 free tests to concession card holders was not good enough.

“Such limited access doesn’t help millions of workers and businesses who need access to multiple tests on a regular basis to protect workplace health safety and operational continuity,” the union’s chief executive, Jill McCabe, said.

“Access to free tests is a critical health and safety risk-mitigation measure required to reduce the spread of Covid in workplaces.”

As Guardian Australia has previously reported, tourism and hospitality operators and airlines have also had to reduce their operations due to staff shortages caused by the surge in cases.

Related: ‘Falling over in a screaming heap’: overworked staff quit under-resourced NSW regional hospital

Sarah Hunter, the chief economist for Australia at BIS Oxford Economics, said it was hard to gauge the effect of staff shortages on the economy until workforce statistics were released by the Bureau of Statistics late next month.

She said it was also difficult to tell whether the hit was caused by the problems with supply or a slump in demand.

“You’re also seeing people being less willing to get out and about, shop, that kind of thing,” she said.

“Whether it’s because people aren’t able to go to work or they don’t want to go out, it’s difficult to tell because they’re happening at the same time.”

However, Hunter said Australia could learn from the woes experienced by the UK and US in previous waves where those countries did not lock down.

She said up to 25% of employees across the third of the Australian workforce that was in industries where working from home was not possible could be put out of action at any one time.

“Twenty five per cent is definitely a worst case, I’m not saying that’s going to happen, but clearly for the next few months it’s going to be difficult across the economy,” she said.

“It’s not just healthcare industries, it’s companies like Woolworths and Coles and the food supply chain.

“In the UK in their last wave they were having problems not because of supply problems but because they weren’t able to get things on the shelves.”

Hunter said another pressure point would be parents who were unable to work because their children had to stay home and needed to be supervised.

“Again it’s hard to know how much of an impact this will have, but in the US and the UK this factor has been cited in surveys as one of the reasons people haven’t yet returned to the workforce.”