The prime minister, Scott Morrison, says the economy is “obviously” taking a hit from the Omicron wave of the pandemic, while Labor is warning that mismanaging health outcomes will make the situation worse.
As the country recorded another 71,000 cases nationally on Monday, Morrison said it was “understandable” that the Omicron variant was affecting the economy, but he was hopeful of a strong rebound.
“At this stage, it is a bit too early to tell (the economic impact), but there’s obviously been a dampening impact on consumer demand – I think that’s fairly obvious and understandable,” Morrison said.
“But what we’ve seen so many times is that when you, it’s a bit like when you’ve come out of lockdown, you see the economy surge back quite quickly.”
Morrison said that businesses enduring workforce shortages and disruptions to supply chains were experiencing “a tough time”.
“As the case numbers continue to rise, the volume of cases will of course have an inevitable impact on the workforce,” the prime minister told reporters in Canberra on Monday.
“This is an incredibly tough time on business. There aren’t lockdowns but there are many people obviously impacted by being close contacts or people being wary, or those indeed who have Covid themselves.”
Morrison made the remarks while unveiling changes to isolation requirements for workers in the food manufacturing and distribution sectors, which have been hit by workforce shortages of more than 40%.
Spending surveys released by the ANZ bank last week showed consumer spending was once more down to lockdown levels, as workers were isolated, businesses shut down, and consumers stayed home.
But despite the grim figures, Morrison pointed to figures released on Monday showing Australians are, on average, 45 months ahead of their monthly mortgage repayments, with $222bn in offset accounts, up from $174bn in March 2020.
“Australians have been making good decisions to increase their financial resilience during the course of this pandemic.
“They’re using their smarts. They’re making their choices. They’re ensuring they’re getting their financial position in as strong a position it can be to get through this pandemic.”
But the Labor leader, Anthony Albanese, criticised the government for failing to manage the easing of restrictions and preparing for the spread of the virus.
“What we know is that if you don’t get the health outcomes right, the adverse impact on the economy will be stronger,” Albanese said.
“We are seeing that around the country, we’re seeing that with workers unable to attend work, with shortages on our supermarket shelves.
“We need to deal with the health issues first, and that will lead to a better economy, more jobs being able to be undertaken. A more normal way of life, including children being back at school, is what everyone wants.”
The mid-year budget update in December warned of a potential downside scenario that could arise after an outbreak of a new variant, which would result in a significant government response including lockdowns.
In this scenario, economic activity would be around $20bn lower in 2021-22, wiping 1 percentage point off GDP in 2021-22 and hiking unemployment up by 1%.