Australia Omicron blunts economic activity. Could anyone have seen this coming? Well, yes

14:50  13 january  2022
14:50  13 january  2022 Source:   crikey.com.au

NZ learning from Aust COVID testing crisis

  NZ learning from Aust COVID testing crisis New Zealand has fast-tracked orders for rapid antigen tests and is encouraging booster take-up as it awaits the inevitable arrival of Omicron in the community.Health authorities revised their RAT order last week, buying another six million rapid tests.

As the New South Wales government introduced restrictions last week, a Health official claimed that nobody could have predicted the challenges created by the rise of Omicron.

  Omicron blunts economic activity. Could anyone have seen this coming? Well, yes © Provided by Crikey

But while policymakers didn’t necessarily foresee the sudden emergence of a more transmissible, less virulent strain of COVID-19, some experts say we could have been better prepared to face the economic havoc created. Instead Treasury was sidelined, and inadequate attention paid to supply chain issues.

Now Australia faces a summer of record case numbers, widespread community anxiety and economic disruption. COVID infections and isolation have led to empty supermarket shelves, shuttered hospitality venues, and many people opting into their own form of “shadow lockdown”.

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National plan’s miss?

Remember the national plan, Prime Minister Scott Morrison’s four-stage approach to living with the virus, based around hitting vaccination targets and underpinned by modelling from the Doherty Institute that still guides the COVID response in most states?

  Omicron blunts economic activity. Could anyone have seen this coming? Well, yes © Provided by Crikey

Surging case numbers were to be expected, so why are we so unprepared?

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The plan and modelling was put together in a pre-Omicron world. And although the Doherty Institute did make assessments around a potentially more transmissible future variant — and predicted a steep rise in infections after reopening — there was little guidance in the plan for the economic situation we are experiencing.

Similarly, analysis prepared by Treasury last year to support the national plan seems to focus on the likelihood of lockdowns and other restrictions at various vaccination levels. The modelling found that with more than 80% of the eligible population vaccinated, the economic cost of an outbreak would be $140 million a week. But Treasury didn’t model the cost of a “severe and widespread outbreak that breaches health system capacity”. Whether that describes the kind of situation we’re living through probably depends on which health expert you ask.

with Omicron, fewer resuscitation patients, and less stays at

 with Omicron, fewer resuscitation patients, and less stays at Hospital if it is much more contagious than the delta variant, Omicron causes less symptoms of respiratory distress and therefore sends fewer patients in services critical care. © AFP.com/sebastien Bozon A patient with COVID-19 is elongated at the Hospital Pasteur in Colmar, in eastern France, April 22, 2021 the first estimates of OMICRON and intensive care passages seem to be confirmed with time.

Video: Experts optimistic Omicron peak has passed (9News.com.au)

Treasury’s analysis also didn’t consider things like “confidence effects of improving certainty and reopening; dynamic effects (such as labour market scarring); social costs; the economic costs of illness and death; and fiscal costs.”

Economics Professor Richard Holden says there’s been a general sidelining of Treasury in Australia’s COVID response. Had it been better engaged in developing the national plan last year, Australia might have been better prepared for some of the economic disruption.

“My own reading of things is Treasury have been under-involved — [it] should’ve been engaged on a whole range of issues,” he told Crikey.

Should we have seen it coming?

Putting aside the scope of the government’s request to the Doherty Institute, and the unexpected emergence of Omicron in late November, Holden believes the shadow lockdown could have been foreseen.

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  ‘Delta is still around': Variant still high among COVID patients at hospitals Up to a quarter of the sickest coronavirus patients are suspected of having the Delta strain, even though the Omicron variant dominates the tens of thousands of new infections being reported nationally. Early estimates from the Australasian College for Emergency Medicine suggest cases of the more virulent Delta variant are still making up between 20 and 25 percent of coronavirus hospital presentations.

“I think this was very foreseeable,” he said. “In the sense that we know that when there’s a lot of virus circulating, even absent strict lockdown rules, people take evasive action.”

Independent economist Saul Eslake says the potential for the economy to rebound after opening last year has been dampened by high case numbers, and its effect on people’s willingness to do things which stimulate economic activity.

“When we came out of previous lockdowns, we knew there was no COVID,” he said. “This time there was. Nobody — not the government, not forecasters — could’ve anticipated that people would have chosen themselves not to go out. We knew people would curb their movements, we just didn’t anticipate the magnitude of it.”

Eslake also believes that although Omicron was unexpected, there were warning signs from overseas as far back as November about its potential to affect supply chains.

“If you look at things that the [US] Federal Reserve were saying from mid-November onwards, and recent statements from the Bank of England, it was that Omicron’s impact would be felt on supply chains, putting upward pressure on prices,” he said.

Omicron, like all things COVID, has thrown up plenty of uncertainties and unknowns. But the strange economic limbo we’re living through was never outside the realms of possibility.

The post Omicron blunts economic activity. Could anyone have seen this coming? Well, yes appeared first on Crikey.

Will Omicron Protect Us From Future Waves? .
A variant that spreads comprehensively won’t necessarily protect comprehensively.The close of Omicron’s crush, then, should bring the country one step closer to hitting a COVID equilibrium in which SARS-CoV-2’s still around, but disrupting our lives far less. In the most optimistic view of our future, this surge could be seen as a turning point in the country’s population-level protection. Omicron’s reach could be so comprehensive that, as some have forecasted, this wave ends up being the pandemic’s last.

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