We’ll dodge new recession, says PM

Phillip CooreyPolitical editor

The Australian economy will suffer a heavy blow as a consequence of the lockdowns currently afflicting three states but both Treasury and the Reserve Bank believe a second recession in as many years will be avoided, Scott Morrison says.

With his government being blamed for the economy-destroying lockdowns because of the slow vaccine rollout, the Prime Minister also ramped up pressure on the scientific panel whose advice to restrict AstraZeneca to over-50s, and then over-60s, torpedoed the inoculation program.

“Those delays are regrettable. People have perfect hindsight after these events,” Scott Morrison said of the vaccine rollout. Alex Ellinghausen

“It’s a constant appeal. I can assure you, it’s a constant appeal,” Mr Morrison said when asked whether the Australian Technical Advisory Group on Immunisation should reassess its advice which is based on a balance of risks.

“It’s for them to now constantly reconsider how that balance of risk applies and provide their advice accordingly,” he said.

Before Mr Morrison spoke, ATAGI co-chairman Professor Allen Cheng implied Mr Morrison could have overridden the advice at the time.

“We have been very careful trying to craft the words that we have been using and providing our thoughts,” he said.

“We have not said people under 60 and previously under 50 should not get the vaccine. We’ve said that we prefer that they get Pfizer. We picked that word really carefully.”

Mr Morrison declined to apologise for the vaccine setbacks but accepted responsibility. With one million doses a week now being administered, he said the country was about two months behind where it otherwise would have been and “may be less than that by time we get to the end of this year”.

NSW shows next to no sign of progress

The government is being hammered in the opinion polls as Greater Sydney, parts of regional NSW and the whole states of Victoria and South Australia find themselves in hard lockdown.

NSW shows next to no sign of progress with another 110 cases reported, of which 43 were active in the community, a big jump from the day before. The latter number is the one the government says must reach zero before the lockdown can be lifted.

Victoria, which extended its lockdown by a week on Tuesday, recorded another 22 cases while SA, which announced a one-week shutdown on Tuesday in response to five cases, recorded another six.

Other states have slammed borders shut, putting the country in as bad a position as it has been since the pandemic started.

Frustrated business leaders hit out again, saying governments needed to reopen state and international borders and aspire to live with the pandemic and put public policy before politics.

Zip Co-chairman Diane Smith-Gander, Commonwealth Bank chairman Catherine Livingstone and Telstra chairman John Mullen expressed their views at an Australian Council of Superannuation Investors conference on Wednesday, but accepted higher vaccination rates were the key.

Over the weekend, initial Treasury estimates forecast a hit to GDP of at least 1 per cent for the September quarter. Increasingly, economists predict the quarter to contract.

If the December quarter followed suit, the economy would be once more in recession, as it was when the March and June quarters contracted last year.

December quarter expected to rebound

Mr Morrison said, however, that while GDP and employment would be hit in the September quarter, the December quarter was expected to rebound, despite Sydney falling over and the delta strain of the virus proving notoriously difficult to contain.

“It is impossible to avoid it when you have lockdowns running at the rate we’re seeing across three states right now. So we do anticipate that,” he said.

Prime Minister Scott Morrison has insisted his government is following ATAGI advice on AstraZeneca, even as he said he was appealing for changes for younger Australians.

“I spoke to the governor of the Reserve Bank only this week and the deputy governor with the Treasurer, and they share an outlook, as we do, and that is while these impacts of the lockdowns will be here in this quarter, in the quarter that follows, should we continue to be on the path we’re on, in increasing our resilience, then we can expect that to turnaround in the December quarter.”

Asked what assumptions underpinned the rebound theory, Mr Morrison cited precedent.

“The confidence that is being expressed by both Treasury and the Reserve Bank is the confidence of experience of what we’ve already seen occur,” he said.

“The economic impact of this, of course, will be a heavy blow. But it’s not a blow we can’t recover from and how do I know that? Because last year when we faced the same heavy blow, we turned it around and got a million people back into work. So we know how to see our economy recover.

“People will go back to work. People will go back and buy things in the shops. The sights will open again and the economy will come back to life very, very quickly.”

Mr Morrison said there were no official estimates of the adverse impact on the September quarter.

‘I don’t have six weeks’

The Prime Minister, who has relocated from Sydney to Canberra to isolate ahead of the August 3 resumption of Parliament, also knocked back calls from Labor, the unions and some employer groups to reintroduce JobKeeper.

Mr Morrison said the current disaster payments of between $375 and $600 for adversely-affected workers were the same amounts as JobKeeper was paying in the December quarter last year.

The payments are deposited directly in bank accounts which make the system simpler than JobKeeper which was administered through payrolls.

Wednesday. 21 July: NSW Gladys Berejiklian has refused to be drawn on what life in Greater Sydney might look like post-July 30, when the current tough lockdown is currently scheduled to ease.

The disaster payments can be turned off and off quickly, unlike JobKeeper, which took four to six weeks to establish and ran for six months at a time, he said.

“I don’t have six weeks. I need to make sure that we’ve got $200 million out the door now,” he said.

“Which is exactly what we’ve done. So we will continue to tailor our responses of economic supports to meet the challenges that we have now.″⁣

Mr Morrison also defended the vaccine rollout stumbles. He noted that it was “based on the plan that was agreed and adopted by both my Cabinet and endorsed by the national cabinet”.

That plan included not rushing the approvals process so as not to stoke vaccine hesitancy on focusing on AstraZeneca because it could be manufactured in Australia.

Moreover, at the time, Pfizer needed to be stored at 70 degrees below zero, making it impractical to distribute across such a large nation, especially in rural and remote areas, he said.

“Those delays are regrettable,” he added. “We all know they are the result of many factors. People have perfect hindsight after these events.”

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