Its chief economist Matthew Peter said governments must also now ramp up “woefully’’ inadequate investment on testing, tracing and quarantine which have become long term issues.
He said the most recent unemployment data masked a real problem with people dropping out of the workforce because restrictions make it impossible for them to either apply for jobs or turn up.
“The real impact of the spread of Delta (the highly transmissible strain of the virus) has yet to show up and I’m afraid there is bad news to come,’’ he said.
“We expect employment to fall sharply from here. We are likely to lose about 150,000 jobs between now and Christmas and that should seen unemployment rate climb back above 5.5 per cent.’’
But he also added that while Australia should pursue the 80 per cent vaccination level, it would still mean that COVID-19 would become the pandemic of the unvaccinated.
“This means that even if we hit 80 per cent we will still have a large number of people isolating in quarantine, probably on a rolling basis, and that will lower labour force numbers and mean we will still have to have controls on international travel.”
And he said the Reserve Bank had “no choice’’ but to reverse its plan to taper bond issuance – a policy which has lifted liquidity in the markets and has been crucial to buoyancy of the Australian economy.
“In managing covid indefinite public spending to support consumer spending is not a long term solution.
“Central banks have been financing govt debt but that road eventually leads to increased inflation or lost decades of low growth a’la Japan.
“The immediate need right right now is to increase that vaccination rate to at least 80 per cent of the adult population.
“At the same time we need to invest in our technology to test, trace and isolate and quarantine.
“At the moment we are woefully underinvested in this space largely because we haven’t considered such measures as being long term. We have seen them as temporary measures.
“What we will see and as the Doherty report emphasises this, that need is a long term need.’’
The ANZ Bank said efforts to combat Delta would push gross domestic product down more than 3 per cent in the third quarter.
Its expectation for Australia’s growth over the year to December 2021 was now 1.4 per cent.
Meanwhile, north Queensland tourism operators expect thousands of jobs to go by the end of the year, according to research from the Tourism and Transport Forum.
The industry formerly supported 15,750 full and part-time staff in the Cairns region prior to the pandemic, but 3600 permanent staff have lost their job as of July 2021, with a further 3000 expected in the coming months.
Lockdowns across Australia have hindered the region’s temporary emergence last year, when visitors made Cairns the most popular flight destination late in 2020.
Mark Olsen from Tourism Tropical North Queensland says the loss of commonwealth support and ongoing lockdowns continue to cripple a once-thriving industry.
“The region grew its workforce across the entire supply chain ready for a busy winter, but now these new recruits, including more than 200 from the tourism industry, who have been in training for months are being told to find other work,” he said.
“Government needs to understand how significant this impact will be on our community where one in five jobs have depended on tourism.”
Olsen said Tropical North Queensland would remain one of the most impacted regions in Australia, labelling the tourism industry’s outlook as “grim”.
“Our region has had just 27 days straight without the impacts of a lockdown in key domestic markets in the past 18 months,” he said.
“That period in May was the busiest the Cairns and Great Barrier Reef region had been since before the pandemic as we are the most Googled regional destination for Australian holidaymakers.
“However, the stop/start impact of southern lockdowns shutting the destination out of key markets is difficult for businesses to manage, particularly with staffing levels.
“Most businesses are running at less than five per cent of their normal revenues … and more than $20 million in postponed events for July and August.
The region also dealt with its own snap three-day lockdown early in August after a taxi driver was infectious in the community for 10 days.
No cases were recorded but local business operators say the impact has been felt throughout all sectors.
“We’re not used to it up here. Everyone stayed at home with foot traffic to a minimum,” Mooz cafe operator Anton Rafferty said.
“The city is slowly bouncing back with visitors from the region, but it will continue to struggle without the domestic market’s support.”