The lockdowns in Sydney and Victoria, aimed to stop the spread of the Delta coronavirus strain, could cost the country $ 10 billion, with new private sector projections stalling the outbreak of the national economic recovery.
KPMG estimates that up to 1.5 percentage points will be deducted from growth in the June quarter based on 40-day business closures in Greater Sydney and 10 days in Victoria, with most of the cost being borne by private companies and private employees.
KPMG estimates the lockdown in Sydney will cost around $ 220 million per day, while in Victoria the cost will be closer to $ 150 million per day.Recognition:Steven Siewert
In the first six months of 2020, Australia experienced its deepest recession since the 1930s, when the economy was hit by restrictions during the first wave of the coronavirus pandemic. Since then, however, it has rallied strongly while the unemployment rate has fallen below 5 percent.
Even Victoria’s lockdown for much of the second half of last year didn’t hold back the recovery, as the country’s economy had grown nearly 9 percent since mid-last year by the end of March.
However, KPMG’s chief economist Brendan Rynne said the lockdowns in Sydney and Victoria would hit the economy, which did not receive the same government support as it did during the depths of the pandemic.
He said the lockdown in Sydney would cost about $ 220 million per day, while in Victoria the cost would be closer to $ 150 million per day. Over the assumed lockout period, the total cost would be nearly $ 10 billion.
The lack of major support like the $ 90 billion JobKeeper wage subsidy program, which cost the government the bottom line but helped maintain private sector profits and wages, meant the new lockdowns had other implications for the government Economy.
“The shift this time is that it is being felt much more in the private sector, in earnings and wages, than in the public sector,” he said. “With individual people, there are people who are worse off after the lockdown, who were better before the start.”