Treasury currently expects economic activity to contract by around 3 per cent in the September quarter, a smaller hit to activity than the record 7 per cent fall in the June quarter 2020. These outbreaks and associated lockdowns have disrupted the strong economic recovery that was underway.įrom July to September this year, employment fell by 2.2 per cent.īusiness and consumer confidence has also declined owing to heightened uncertainty but remains much higher than the record lows reached in 2020. In early August, almost two‑thirds of the population was in lockdown. While we can look forward to better economic outcomes as vaccination rates rise and the economy opens up, the recent lockdowns will affect growth and employment in the short term. Treasury worked closely with the Doherty Institute to provide integrated health and economic advice to inform the development of the National Plan that is guiding Australian governments. Many of these treatments have been shown to substantially reduce the risk of hospitalisation or death, particularly if they are administered very soon after someone is infected. There have been significant improvements in COVID treatments over the past 12 months, with a number of treatments approved and more under evaluation. It is particularly encouraging that over 90 per cent of the population aged over 16 in NSW, Victoria and the ACT have now had their first dose. Australia’s vaccine rollout has continued at a strong pace, with almost 2 million doses administered each week for the past 9 weeks, putting Australia on track to have one of the highest vaccination rates in the world. And this, in turn, hinges on the combination of high vaccination rates and effective COVID treatments. Our economic success hinges on our success in managing the virus and its impact on health systems. The modelling for National Cabinet by the Doherty Institute shows that high vaccination rates are the key to managing the virus in the future, allowing us to open up and avoid costly lockdowns. Here in Australia, NSW, Victoria and the ACT have been adjusting to living with COVID and other states and territories will soon follow. It remains a significant achievement of all Australian governments that the health and economic impacts of COVID have been much less than in most other countries. The pandemic has impacted many countries severely with deaths per million in Canada, the UK and the USA, respectively 12, 32 and 35 times the rate we have experienced here in Australia. What does seem to be clear is that countries with high vaccination rates are experiencing lower rates of hospitalisation and deaths. There is variation in the number of cases, and in many circumstances opening up is leading to caseloads increasing. The emerging story is similar across many countries. Over the past few months, we have seen the world adjusting to living with the Delta strain of COVID.