Ross Stitt looks at how Australia is faring with living with Covid, noting it's proving to be challenging and enduring

Two and a half years into the pandemic, Australia itself seems to have a case of ‘long Covid’.

Waves of new Omicron subvariants, rising reinfection rates, and a concurrent flu season are taking an ongoing toll on the nation’s health and wealth.

According to the data, the incidence of Covid-19 cases and deaths is currently worse in Australia than just about anywhere else in the world. In the last week, Australia had 12,368 cases per million people, a higher rate than any other country with a population of more than one million. Second was New Zealand with 12,192 cases per million people.

And it’s widely recognised that a large proportion of cases in Australia, perhaps a majority, are not reported. Recent research indicates that 46% of Australian adults had had Covid by early June 2022, more than half of them in the previous three months.

In terms of deaths per million people over the last week, Australia is in second place on 20 behind New Zealand on 28.

Of course, that paints an unnecessarily gloomy picture of the handling of the pandemic in the Antipodes. In reality, many other countries only have better figures now because they suffered much higher cases and deaths early on, and because they are currently benefitting from a summer reprieve.

Of growing concern in Australia is the level of Covid-related hospitalisations. This week they hit a new peak of 5,571 – higher than the previous peak of 5,390 reached back in January. However, thanks to a combination of vaccines and anti-viral medicines, the intensive care position is more positive. There are now 145 people in ICU versus over 400 in January.   

Covid case numbers are expected to peak soon but the peak in hospitalisations will come several weeks later. And the strain is exacerbated by flu-related hospital admissions. The so-called ‘twindemic’ of Covid and influenza is testing the hospital system, and the people who work in it. Many hospitals are now postponing elective surgery.  

Vaccinations have made a fundamental difference to the outcome of the Covid pandemic and saved Australia from the carnage that struck some countries in 2020. However, an element of vaccination fatigue appears to have set in. The vaccination rate for the initial two doses is in the high nineties but the uptake of boosters is much lower. Only 71% of those eligible have received the first booster shot.

Fortunately, the figures are significantly higher for the aged care population, the group most exposed to death and serious complications from the disease. Over 95% of the aged care population have had a first booster and 77% have had a second booster.

Nevertheless, there are currently more than 1,000 “active outbreaks” in residential aged care homes in Australia. As a result, the government has extended the deployment of Australian Defence Force personnel to support the aged care sector.

Paul Sadler, CEO of the Aged and Community Care Providers Association, has welcomed the government’s move but says that “we are short, in just residential care alone, 27,000 workers at the moment”. 10 percent of staff are currently off work because either they have Covid-19 or the flu, or they are isolating. 

Given the strain that the hospital and aged care systems are under, many individuals and organisations, including the Australian Medical Association, are calling for the reintroduction of wider mask mandates. However, absent a very dramatic deterioration in circumstances, that is highly unlikely. For better or worse, Australia and its politicians have moved on.

Control of the pandemic is now all about personal responsibility and common sense. Governments prefer recommendations to mandates.   

Nowhere better demonstrates the current approach than the state of Victoria. Dan Andrews, the Victorian premier, was the man responsible for making Melbourne one of the most locked down cities in the world. But even he has abandoned rule making. As he said last week – “I’m not telling people what to do, I’m just asking.” For example, the state government is asking school students to wear masks again rather than making it mandatory.  

The situation is similar in New South Wales. The premier Dominic Perrottet says that “the time of mandates is a time of the past, when you had lower vaccination rates”. Face masks are still required in some places, primarily hospitals, aged care and public transport, although there is little evidence that the rules are being enforced on public transport. Non-compliance is rife.

Putting aside the health issues, Covid-19 continues to have an adverse impact on Australia’s economy. As the new Omicron subvariants spread, there is an expectation that they are suppressing economic activity. Some consumers become more reluctant to dine out or go to the movies; some people decide to spend more time working from home.

Rising case numbers also mean that more workers are either sick or forced to self-isolate. That compounds an already severe labour shortage with the unemployment rate in June falling to 3.5%, the lowest in nearly half a century. That creates more upward pressure on wages and salaries, and therefore the inflation rate.  

The dragging on of the Covid pandemic contributes, along with rising inflation, falling house prices, and higher interest rates, to the fear and uncertainty that is driving a continuing decline in consumer confidence. That in turn feeds through to lower consumer spending.

There is a direct cost to the government, both from reduced tax revenues and specific ongoing support payments. Australia has a ‘pandemic leave disaster payment scheme’ that provides $750 per week to workers who test positive to Covid-19 but do not have access to sick leave. This makes sense as a mechanism to limit the spread of the disease, but it comes at a high cost.

The scheme originally ended on 30 June with Prime Minister Anthony Albanese vowing that budget constraints prohibited its continuation. However, the government was soon forced to do a retrospective back flip in the face of widespread criticism. The scheme has now been extended until the end of September at a cost of a billion dollars.

Fiscal restraint, like so many things, continues to be undermined by Covid-19.

The great unknown is how long all this will continue. Last year ‘living with Covid’ was heralded as a return to normality. Unfortunately, it’s proving more challenging, and more enduring, than most had expected.

Ross Stitt is a freelance writer and tax lawyer with a PhD in political science. He is a New Zealander based in Sydney. His articles are part of our 'Understanding Australia' series.