While it’s undeniable that COVID-19 is carving a path through the incomes of Aussies, new analysis by Deloitte Access Economics puts the cost of COVID-19 at a staggering $60 billion, and that’s after allowing for the support to families and businesses that has been rolled out by the government.
According to Deloitte, the pain of lost incomes isn’t equally distributed.
It predicted that cafés, restaurants, pubs, hotels and motels will be short about $8 billion in lost wages and profits in the next handful of months.
Not surprisingly, the deeper the lockdown impacts, the deeper the income losses.
“That’s the biggest hit to any industry, especially given that this is a small industry, accounting for only about one-fortieth of the economy overall,” said Chris Richardson, Deloitte Access Economics partner.
Arts and recreation are no better off, with Australia’s empty gyms, sporting fields, entertainment centres, conference centres, movie theatres and playhouses expected to cost close to $6.5 billion.
The next hardest-hit industry, according to Deloitte, is mining. Despite remaining open, its incomes are set to fall $5 billion short in the next few months as it struggles to get some of its workers onsite due to state border closures.
While construction, too, remains open, with governments trying hard to speed up or add to the projects that they’re financing, a bunch of private sector projects are slowing as businesses reassess the need to build.
As a result, construction is tipped to lose just under $5 billion by end-July.
Professional services aren’t safe either, with lawyers, accountants, architects and advertisers bracing for a $4.5 billion hit due to a drop off in demand and national commercial activity.
But looking at the other end of the scale, Deloitte explained that income losses are rather small for sectors where taxpayers pay many or all of the bills.
This includes education, utilities and the public sector which — outside of some libraries, museums and galleries — is running as normal.
A surprise packet on Deloitte’s list is retail. The hardest-hit parts of that sector are obvious in any shopping mall and in a series of high-profile layoffs and stand-downs, but due to rising online sales and overwhelming supermarket demand caused by panic buying, the financial cost is predicted at $3 billion.
And the good news?
“These income losses are awful. Some small businesses have closed their doors forever. But Australia has fought a world-class fight against the coronavirus, and it increasingly looks as if the worst will soon be behind us,” Mr Richardson concluded.
