It’s amusing to watch, in the usual sense of not being amusing at all. The Australian economy is in another COVID lockdown shock. This time triggered by the private sector.
Like the Delta wave shock, it will deliver a much deeper economic blow than it had to thanks to the routine blundering of the Morrison Government.
The shock is to both the demand and supply sides of the economy and it is deep:
ANZ data shows spending is now at its worst since Delta lockdowns, and Sydney spending for the week to 5 Jan was at its weakest since COVID began. Caution about Omicron transmission and disruptions of businesses due to staff shortages are central to the decline. #ausbiz #omicron pic.twitter.com/UlA5Ui8wVI
— ANZ_Research (@ANZ_Research) January 7, 2022
As I noted in mid-December when the OMICRON wave first hit Newcastle and it shut down, the same was coming in short order to our major capital cities.
The CBA suggests it will be brief:
Commonwealth Bank head of Australian economics Gareth Aird said it was “far too early” to say the drop in spending will have a long-lasting negative impact on the economy.
He estimated there could be as many as 1 million people isolating in NSW – out of a population of 8 million – who cannot spend money on services or goods, other than what they can have delivered to their home.
“The faster case surge, the more people are self-isolating at any point in time, the more you’re going to have a very concentrated negative hit to spend in the economy,” he said.
Mr Aird expected spending will bounce back once the peak of infections passes and people recover from their illness.
True. OMICRON cases will peak by the end of February. But the shock will not pass quickly enough to save growth for the quarter. Ahead are a series of peaks and declines in OMICRON cases as the first wave tops out then gets a second wind from the return to school of Morrison’s millions of unvaccinated kids. Overall, the OMICRON wave will last longer than it has internationally because Australians have locked down more but it will still likely be over before the end of Q1.
As such, there are two pieces of good news to share as we look forward into 2022. The first is that OMICRON is likely going to end the pandemic soon. It is so contagious that it is unlikely that we’ll see a more virulent coronavirus mutation that can compete.
Second, the third Morrison Government recession in as many years will finish off his government. This is not news. Morrison’s rape protection racket, selling of climate change to a blood sucking gas cartel, ceaseless pillaging of public funds, total failure of pandemic policy, general psychopathy, so on and so forth, has already damned his government. But there is nothing like a good old recession with falling house prices to put a full stop on a government’s exit.
Indeed, in no year of the disgraced Morrison Government has it failed to deliver a recession.
In year one, it was the COVID shock made much worse by Frydenberg’s over-tightening.
In year two, it was the DELTA shock made hugely worse by Morrison’s vaccine policy calamity.
In year three, it is the OMICRON shock made hugely worse by Morrison’s testing calamity and cheerleading of NSW’s pandemic mistakes.
The sooner we put this combined biological and political sickness behind us the better.
