Australia news live update: Victoria records 22 Covid deaths, NSW 36 in deadliest day so far as cases in hospital grow; fears Tonga volcano death toll will rise | Australia news

Economists are starting to polish their crystal balls and come up with their first guesses on what all this disruption to our lives might do to our economy.

The Commonwealth Bank, our biggest bank, is among the first out of the blocks to estimate the wider impact of absenteeism levels reaching as much as 60% in businesses such as hairdressing.

Gareth Aird, CBA’s head of Australian economics, reckons hours worked will drop 3-4% in January alone, and consumption will be hit by the significant economic disruption that “looks likely to be sustained over the next few months”.

As a result, CBA has slashed their forecast for first-quarter growth to 1% from the December quarter, compared with a 2.3% pace the bank had previously predicted.

That sounds bad but for now the damage is looking temporary with a “snapback” still predicted. Aird is leaving both the second half and fourth-quarter forecasts unchanged, provided Omicron comes and goes in a hurry and isn’t followed up by another nasty strain.

Aird tells Guardian Australia the first-quarter cut will lower the bank’s full-year GDP forecast to 4.8% from an earlier prediction of 5.1%. That’s “not a lot in the scheme of things”, he says.

As a result of the still strong momentum in the economy, the jobless rate will remain low and inflation pressures – probably made worse by these shortages – will continue to build.

The CBA still predicts the Reserve Bank of Australia to commence lifting rates by late 2022 or earlier than the central bank is so far fessing up to.


Victoria records 22 Covid deaths and 20,180 new cases



NSW records 36 Covid deaths and 29,830 cases in state’s deadliest day



Protracted Covid outbreak could cripple Rio Tinto workforce, miner warns

Big miner Rio Tinto has warned that a protracted Covid-19 outbreak could cripple its workforce or supply chains and “severely constrain” output at its mines.

In a quarterly production update out this morning, the company, one of Australia’s biggest, said it was already suffering from labour shortages and fatigue in its workforce, heightening safety risks.

Chief executive Jakob Stausholm said operating conditions in 2021 “remained challenging, including due to prolonged Covid-19 disruptions”.

The amount of iron ore Rio dug up from its mines in the Pilbara fell by 4% last year to 322Mt. The company expects to dig up between 320Mt and 335Mt this year, it said.

Our guidance assumes development of the pandemic does not lead to government-imposed restrictions and widespread protracted cases related to new highly contagious variants with high severity, which could result in a significant number of our production critical workforce and contractor base being unable to work due to illness and/or isolation requirements …

This risk extends to prolonged interruption of service from a key partner or supplier which could lead to severely constrained operational activity of a key asset or project. This risk is exacerbated globally by tight labour markets and supply chain delays.

A Rio Tinto iron ore train in transit in the Pilbara region of Western Australia.

A Rio Tinto iron ore train in transit in the Pilbara region of Western Australia. Photograph: Krystle Wright/The Guardian

Meanwhile, the Australian Tourism Industry Council has called for the reintroduction of the federal government’s cash flow boost program after a 52% fall in business in the last three months of the year compared with the previous year – a fall that came before the current Omicron outbreak smashed many hospitality businesses.

“This is the worst it’s ever been for the tourism industry,” deputy chair Daniel Gschwind said.

The summer period is our peak season, providing revenue that takes businesses through the winter and they’re not seeing it come in. Too many businesses are staring at disaster.


Fears Tonga disaster death toll will rise


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