Premiers and economists are increasingly sure that lockdowns are here to stay for the foreseeable future.
On Thursday, New South Wales recorded 124 new cases on Thursday, with at least 70 of those having been infectious in the community at some point, while 17 more were still being investigated.
“We anticipate case numbers will continue to go up before they start coming down and we need to brace ourselves for that,” Premier Gladys Berejiklian told reporters.
With case numbers still rising, along with the all-important number of community transmissions, the state appears increasingly resigned to the likelihood of another lockdown extensions. In response, Queensland has shut the border to its southern neighbour, with the provision of free travel between some border communities.
“We’ll be living with some level of restriction … until the majority of the population is vaccinated,” Berejiklian said on Thursday.
NSW recorded 124 new locally acquired cases of COVID-19 in the 24 hours to 8pm last night. pic.twitter.com/4y3TvoDUpF— NSW Health (@NSWHealth) July 22, 2021
There are around 13 million Australians currently living stay-at-home orders, across Victoria, South Australia, Greater Sydney, and parts of regional New South Wales.
Victoria’s acting chief health officer Ben Cowie said it’s too early to say whether the state will exit lockdown on Tuesday, eleven days after it was implemented.
South Australian Premier echoed the sentiment, although emphasised he was “cautiously optimistic” an extension beyond its initial seven-day lockdown could be avoided.
Sydney’s lockdown could become ‘permanent’
With the outbreak in New South Wales far further along, and cases still rising, there are suggestions the state’s lockdown may not even be halfway through.
Modelling from the University of Melbourne suggests restrictions will be required for at least another six weeks.
While Berejiklian dismissed the projection as “an indicator”, the researchers are part of a much larger cohort growing increasingly anxious.
Economists from the Commonwealth Bank said tighter restrictions and rising cases in New South Wales coupled with lockdowns in other states would all cannonball short-term growth.
“These developments mean that the hit to [third quarter] GDP will be a lot larger than the 1.4% we flagged last week,” head of Australian economics Gareth Aird said.
The updated forecasts to be released next week expect the economy will “contract by a lot more than 0.7%” during the quarter.
“But more importantly the developments are concerning because things have not moved in the desired direction on the COVID‑19 front, particularly in New South Wales.”
While Aird said it was “not possible” to forecast the end of the state’s lockdown until active cases trended down, he suggested it may not end any time soon.
If cases did not peak by next week, Aird added that a “permanent” Sydney lockdown would become CBA’s central forecast, with a need for the government to ensure income support in the meantime.
Such a scenario could push Australia into a second quarter of negative growth, characterising a second recession in the space of two years.
“We cannot discount the scenario where the lockdown continues indefinitely until the proportion of the population vaccinated hits a level that policymakers deem acceptable to reopen.”
There is no consensus on where exactly that yardstick lies. Immunologists suggest 80% of the adult population needs to be fully vaccinated. Berejiklian lowered that target to around 60% of the total population this week, with children apparently vulnerable to the Delta strain.
The Premier’s objective would require 10 million doses to be administered. On Thursday, that looked a long way off with just one-third of that total had been given.
Early impact is unclear
Australia’s reaction during the first few weeks of their stay-at-home orders has been mixed.
New data from ANZ shows national economic activity is back at where it was in October last year when Melbournians were stuck at home. Eerily it doesn’t even capture the South Australia lockdown, meaning it could fall lower in the coming weeks.
New South Wales residents, meanwhile, are looking to access Centrelink and government support at levels not seen since April 2020. At the same time, the most vulnerable are being excluded from receiving both.
On the flip side, the rest of Australia seems to be taking it in its stride. National mobility indices show that Australians are moving around less but “nothing like the response we saw during the first lockdowns in 2020”, economists note.
“Sentiment could be hit further if some of the lockdowns are extended, but we think it shows that people are less uncertain about [their] lasting impact.”
While that might be the case right now, no one wants to find out how quickly that confidence can be shaken.
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