Consumer confidence takes another hit on Victoria’s COVID spike
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Signs had been pointing to the start of a potential return to a pre-COVID normal, with consumer confidence lifting, but Victoria re-entering lockdown has put a dampener on that.
In April and May, ANZ-Roy Morgan consumer confidence rose eight straight weeks as lockdown laws and border closures helped substantially reduce the number of cases in Australia.
However, while the consumer confidence index is still over 40 per cent from the bottom in late March, it has slipped down 4.6 per cent.
Consumer confidence about current economic conditions fell 10.6 per cent and future economic conditions by 5.2 per cent.
ANZ Senior Economist Catherine Birch blamed the surge in COVID-19 cases in Victoria.
She said the data suggested,”households are worried about the prospect of a return to tighter lockdowns and the impact of a second wave on the economy”.
There has been speculation that areas in Melbourne could return to lockdown and the opening of state borders could be delayed.
“This is a worrying sign for confidence and a setback for the recovery,” Birch said.
New Zealand’s Kiwibank warned back in April that “the biggest threat to exiting lockdown is the risk of lockdown again” and reiterated these comments last Friday.
It noted the hit of the first lockdowns were bad enough for consumers and business, but that any lingering uncertainty of government policy was an equally hard threat and going backwards on restrictions would be a bigger hit.
“Re-introducing lockdowns will have a far greater impact on economies already weakened,” Kiwibank said.
Meanwhile, the government’s COVID-19 app — promised by Prime Minister Scott Morrison as a way the economy could get going again — has failed to detect a single case.
We will be seeking the cooperation and support of Australians to download the app to help our health workers, to protect our community and help get our economy going again.
— Scott Morrison (@ScottMorrisonMP) April 18, 2020
The insult to injury comes despite 6 million downloads and the rise in cases this week.
Speaking with Stockhead, Sax Institute senior adviser Dr Michael Frommer said it was easy for citizens not to take this threat seriously unless they knew someone with the disease.
The Saxon Institute released a study this morning showing Australia could get on top of this. Specifically it could cut new cases by over 50 per cent if enough people used the COVID safe app and remaining issues with the app were resolved.
“If people don’t actually have an immediate experience of illness around them or media reports of very large numbers going on around them it is difficult to promote preventive measures like social distancing, going in for testing and use of the app,” Dr Frommer said.
The lack of app-detected cases is an easy target to mock or point to as a sign we’re losing control.
But Dr Frommer said the app was only meant to be one device in the tool kit. He said social distancing and testing were equally critical for the economy to return to normal.
Furthermore, take-up rates of the app weren’t high enough to be fully effective.
“If people are out and about, and if there are enough users and enough cases that’s when it comes into its own,” Dr Frommer told Stockhead.
“So it’s like insurance, it doesn’t give us anything when we’re at the baseline state. But if and when a second wave was to occur — and all the scenarios we’ve projected suggest a second wave will occur — then it will come into its own.
“The most important things for preventing it [a second wave] are lots of people practising social distancing, everyone preferably, and continuing high rates of testing.”
Dr Frommer declined to give a personal opinion on whether or not making the uptake of the app mandatory should be considered. He said it was a political decision.
But he did say while the situation in Victoria is “grim” it could not yet be described as a second wave.