COVID's Other Death Toll
Daily infection numbers must be balanced against the health of the economy if we are to make good policy decisions. By James Mathias.
The daily briefings of premiers and senior officials that Australians have become accustomed to during the COVID-19 pandemic are a measure of the seriousness of the crisis we face.
Health statistics, however, are a poor guide to public policy unless set against the health of the economy measured by business closures, job losses, unemployment rates and Government support payments.
To correct the one-sided picture with which we have been premier, here are some of the facts you should know about the health of our economy.
According to the Treasury in their appearance to the COVID-19 Select Committee earlier this month, as at 10 August 989,000 businesses were receiving JobKeeper payments that flowed to more than 3.6 million employees. Given that the entire workforce numbers over 12 million people, JobKeeper is now paying the wages of more than 25 per cent of working Australians. Thus far this has cost the Commonwealth more than $37 billion.
More than 700,000 people though, as was submitted to the committee, are still counted as employed but were working zero hours due to the economic environment.
At an additional cost of $25 billion, 777,000 businesses have accessed the first round of the ATO cash flow boost credit and another 460,500 through the second round.
Clearly, struggling under the pressure of the new environment businesses are operating in, they are stressed to understand just what to do. Over the period from March through to May the amount of calls made by businesses to the Fair Work Ombudsman (FWO) for assistance increased 80 per cent. By the end of the period the FWO received more than 57,000 enquiries related to COVID-19 or the JobKeeper Scheme.
As the increased demand became apparent to the FWO, they launched a dedicated coronavirus website to try and answer some of these questions online which by June had been visited 3.5 million times.
According to Dr Steven Kennedy PSM, Secretary of the Treasury, business investment is expected to contract by 19 per cent in the June quarter, and dwelling investments is forecast to fall 16 per cent in 2021.
In addition to the appearance of Treasury officials, the committee heard from representatives of the Department of Employment about the number of Australians now a part of the caseload for jobactive providers to find jobs for. At the end of February this year the caseload was 633,000 people, which by the end of July had more than doubled to 1.4 million people.
These assumptions and numbers were all made before the re-introduction of stage three and then stage four restrictions in Victoria which have now further distressed the already struggling national economy.
Preliminary modelling undertaken by the Treasury shows that these additional restrictions will cost GDP between $10 and $12 billion in the September quarter. 80 per cent of the effect will be directly on the Victorian economy whilst the other 20 per cent will be borne in other state economies.
In a study of its members, the Australian Chamber had found that since the second wave in Victoria, the number of businesses concerned about their long-term viability had jumped from 32 per cent in May to 66 per cent.
A letter from Regional Development Australia to Senator Perin Davey highlighted the impact that these restrictions and subsequent boarder closures are costing businesses along the Murray. The average weekly loss as estimated by almost 1,500 businesses operating in the area was $8,500. That’s more than $12 million per week lost.
Further, just by moving from stage three to four restrictions, between 250,000 and 400,000 additional Victorians will lose their jobs, according to the modelling.
On these figures, is it any wonder the Premiers fail to mention the health of the economy in their daily press conferences?