As good as it gets? More jobs depend on more Covid-19 jabs

People queue at the NSW Health mass vaccination hub in Sydney’s Homebush. Picture: Getty Images

The economy has come a long way without vaccines, but with the arrival of the Delta strain our near unblemished run out of last year’s recession may have reached its limits.

Don’t be as surprised that the best unemployment rate in a decade – 4.9 per cent in June, according to figures from the ABS – proves to be as good as it gets, at least for now.

As the government reminds us at every turn, jobs stats show Australia has played its cards well since the virus arrived on our shores in early 2020.

A million Australians returned to work since the depths of the downturn just over a year ago. Employment is 1.2 per cent above pre-crisis levels – only New Zealand and South Korea can boast more citizens in work now than before the pandemic. Indeed, the OECD recently said our jobs recovery was running two years ahead of other rich nations.

But as the Prime Minister said on Thursday, the Delta strain now “writes the rules”.

And if the Delta variant proves too wily an enemy, the country faces a real prospect of rolling lockdowns and border closures.

The latest ABS numbers show Melbourne businesses in early June were ready to hold on to workers over the recent two-week lockdown, despite many having no work for them – a story told by the fact hours worked in Victoria plunged by 8.4 per cent while employment dropped by only 0.3 per cent.

Further restrictions will test that confidence.

Over the border, it’s far from certain Sydney employers will be willing and able to cling on to staff over seven weeks of lockdown. Gareth Aird, CBA’s head of Australian economics, doubts it. He sees the unemployment rate nudging higher in July and August. This doesn’t mean an imminent economic crisis but job security is the No. 1 determinant of consumer confidence. If that crashes, a consumption-led recovery turns limp.

The underlying message is the same: success on the health front is a precondition for economic success. But success on the health front needs more than just having the “gold standard” when it comes to tracking and tracing.

It may mean having as many as 80 per cent of the adult population fully vaccinated.

UBS estimates that at the current run rate, we may reach this level of inoculation by the end of this year, perhaps even by November. Vaccine hesitancy could slow the rollout, pushing widespread immunity out to the middle of next year.

The national plan revealed this week makes it clear that in a “post-vaccination phase”, lockdowns will happen only in “extreme circumstances”.

The economic recovery may stall until then.