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

Every day the country isn’t getting vaccinated it’s costing Australia a catastrophic amount. And we’re in a race against time.

COMMENT

The tortoise doesn’t win this race. When it comes to vaccinating, is a time for action. Vaccinating Aussies is a huge 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 fiction section of the library. Hopes of travel and parties and international students returning to our lecture halls are going nowhere.

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BlueCross Aged Care worker Isabelita Tassone receives the AstraZeneca vaccine at Sunshine Hospital. Picture : Ian Currie

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 full normality.

Let’s say eventual full vaccination helps us win back 25 per cent of what was lost. $1.8 billion per quarter (i.e. per three month period). Every month we delay the full 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.

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Prime Minister Scott Morrison is balancing the AstraZeneca vaccine concerns with a fragile economy. Picture: NCA NewsWire/Gary Ramage

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

After all, France is 14 per cent vaccinated, and it is in a massive lockdown after suffering 245,000 new cases last week, an average of 35,00 new confirmed cases every single day. They’ve given out millions of shots, while we’ve managed a dribble of them.

Just over one million of Australia’s population has had one vaccination dose, mostly people stuck in nursing homes. Our young and mobile population will be lucky to see a vaccine before Christmas at this rate.

More evidence that partial vaccination is not enough? In Israel, they had 377 cases just yesterday, despite being the most vaccinated country in the world, with 52 per cent of Israelis having got not just one dose but two. The rate of new cases is falling fast in Israel, but the impressive vaccination rate still doesn’t mean COVID is gone.

We’re in a race against the variants. If the more deadly and more transmissible variants get into our country before the vaccines, we’re cooked, not just from a health perspective but economically.

If these new contagious variants got into our young population, state premiers would – justifiably – pull the lockdown trigger. How long such outbreaks would last would be the question. Potentially long enough to do serious economic damage.

The major variant of concern we have seen in Australia is the so-called UK variant, B.1.1.7. But it is not the only one tearing through populations around the world. In the US, they are dealing with B.1.351 from South Africa; B.1.427 and B.1.429, both from California; and P.1 from Brazil. P.1 is frightening because it is apparently different enough from the original virus that the immune system doesn’t recognise it and you can catch it if you’ve already had COVID.

The more people the virus infects, the more copies of it there are and the more chances it has to mutate. More variants of concern could emerge.

Lives vs the economy

It would be very nice to have the Australian population fully vaccinated – for Australia. But of course, we don’t have community transmission of the novel coronavirus. Other countries do. And they arguably need the limited global supply of vaccine more than we do.

Having the vaccine here would help our economy. A lot. But vaccine would save more lives if it was deployed in other countries where the virus is rampant.

Now, should countries that didn’t do their public health policies properly get rewarded with early vaccination? Maybe not. But if you were one of the people arguing last April that lives were worth far more than the economy, and now you’re arguing a place like France should send its vaccine supply over here so we can cram people into aeroplanes and nightclubs, then just maybe you should consider how consistent that is.

Countries like France can, of course, solve their own problems. But it’s not just places like France that need vaccine. Papua New Guinea is having a huge outbreak.

PNG is a short swim from some of Australia’s northernmost islands and it is a desperately poor country. We sent them 8000 doses a little while ago, which is kind of a joke in a country of 9 million people.

They have little clout internationally, so they rely on our help. If we truly care about lives more than the economy we should probably send most of the vaccines we can rustle up to them.

Everyone wants the doses and there’s not yet enough to vaccinate everyone. Australia is in a lucky position that for us getting them is mostly about helping our economy.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.