Deloitte has forecast vaccination rates and open borders to even Australia’s economic playing field, popping Western Australia’s COVID-free bubble while improving iron ore prices.
The economic advisory’s Business Outlook stated that everything from wages to employment and commodity prices would be positively affected by growing vaccination rates.
“Vaccinations are the best possible stimulus for our ailing economy – with daylight second,” it stated.
However, the Northern Territory, New South Wales and Victoria have led the way in vaccination mandates, while the Federal Government takes a backseat on the matter.
The Western Australian Government recently mandated the vaccination of all workers in the resources sector, with major miners BHP, Rio Tinto and Mineral Resources following suit with their own policies.
Deloitte backed these policies, stating this was the fastest way to a repaired economy.
“Yet, even with only timid support from our leaders, the recovery through 2022 should still be excellent. The Australian economy isn’t broken – it is merely locked down,” Deloitte stated.
The advisory believes the output growth for the mining industry will be the equal second biggest grower (up 3 per cent) for the 2022 financial year, behind only farming and fishing.
This is reliant on recovering iron ore prices and several other factors, according to Deloitte.
“Recent lockdowns have battered government budgets less than you’d think,” it stated.
“Partly that’s as budget repair was running well ahead of schedule when Delta dawned.
“Partly it’s as official forecasts of key revenue drivers (such as iron ore prices) have been conservative.
“And partly it’s as support from governments this time is less than it was during Melbourne’s second wave.”
The Outlook forewarned the 40 per cent of Australia currently living COVID-free, warning of “the day Delta breaks down the door.”
“The costs of reopening will be much smaller when all states and territories are very well vaccinated,” Deloitte stated.
“COVID-free is a precious asset. But it is also a fragile one. And the next phase for WA may see it have less protection from China and iron ore prices, as the West again finds itself riding the commodity price rollercoaster.
“But this is no repeat of last time. The state is better prepared to ride this downswing that it has been in the past.”