From snap to smarter lockdowns: easing the economic and social costs of restrictions

27 July 2021

Protecting the health of Australians must remain our number one priority but a smarter, consistent and more predictable approach to restrictions will help reduce the economic and social costs of managing the virus.

EY analysis commissioned by the Business Council of Australia shows that 100 days of lockdown restrictions at current levels would force the economy into reverse, taking us back to the lowest point of last year’s recession conditions.

“While vaccination remains our best defence, the realities of the Delta strain and vaccination rates means state and territory lockdowns are likely to continue,’’ Business Council chief executive Jennifer Westacott said.

“Nationally consistent approaches and predictability about how restrictions are triggered, enforced and ultimately lifted will improve confidence in the management of outbreaks, alleviating community and business confusion, uncertainty, and anxiety.

“We must accept there will be a cost in controlling the virus, but we can’t sit back and watch all of the hard-won economic gains of the last 12 months unravel.

“The NSW scheme should be a template for Commonwealth-state funded financial assistance which is targeted, designed to keep people in their jobs, uncapped, has adequate integrity safeguards and only applies during the period of lockdowns.

“Our economy is not bulletproof. Restrictions are also taking a toll on the mental health and wellbeing of Australians. Smarter lockdowns can reduce both the financial and human costs.’’

The EY analysis also shows:  

  • 100 days of restrictions at the current level would wipe out all this year’s economic growth and take the economy back to the worst of the recession conditions experienced in 2020
  • lockdowns in New South Wales, Victoria and South Australia are costing $2.8 billion per week and impacting 1.6 million workers
  • the NSW lockdown accounts for nearly two-thirds of this cost, with economic losses accumulating at $257 million each day
  • the construction sector, which is a major contributor to economic activity and employment has been hard hit by restrictions, and
  • if we can restart some core construction activity through a smarter strategy the overall economic impacts could be reduced by $250 million to $500 million per week, helping preserve hard-won economic gains.

“As we have throughout the pandemic, we need to lead from the front and recalibrate our response to the current conditions,’’ Ms Westacott said.

For this reason, the Business Council is today releasing practical national guidelines for smarter management of the virus.

The key points of the guidelines are:

  • update national hotspot definitions to reflect the Delta strain
  • use consistent definitions to trigger lockdowns
  • lockdowns should be localised to affected areas rather than automatically locking down entire states
  • provide milestones around lockdown stages to remove the day-to-day guessing game around rules and decisions 
  • agree on predictable and consistent national public health orders
  • ensure support for individuals is paid quickly, and is easy to apply for and understand
  • set up national architecture to roll-out an expanded version of NSW’s JobSaver scheme
  • ensure impacted businesses are eligible for administrative relief, including tax deferrals
  • consider extending support for heavily impacted aviation and tourism sectors
  • outline a roadmap to reopening which includes a role for business to speed up the national vaccine roll-out, and
  • provide clear information on the availability, risks and benefits of the AstraZeneca vaccine based on the latest medical advice.

“Lockdowns have enormous economic and social costs and should be a last resort. But where they are used, we need to move from snap to smarter lockdowns,’’ Ms Westacott said.

“We need to provide more certainty, and stop people worrying day-to-day where they stand.

“Business, government, health officials and the union movement need to work together on an exit plan out of the pandemic otherwise we run that risk that Australia falls behind its international competitors.”

Download: Be smarter about managing the virus


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