Omicron winter wave expected to hit supply chains

The federal government is bracing for a fresh Omicron wave this winter with “elevated rates” of absenteeism and supply chain pressures expected, the budget papers reveal.

The government outlined its “key COVID‑19‑related assumptions” in last night’s budget papers, which predicted a winter wave across Australia.

It also outlined a number of scenarios for “COVID-19 related uncertainty”, including the possibility of a new “more virulent or vaccine resistant” variant sweeping the country. 

Some experts have warned a new, more virulent strain of the virus might force restrictions to return if Australia did not prepare for it, while others have warned more waves of COVID are “inevitable”.

It comes as many areas across Australia are in the midst of a spike in COVID cases from the highly contagious Omicron subvariant known as BA.2.

In what it called the “winter response plan”, it said COVID uncertainty this winter would cause issues across the country.

And “beyond winter”, the government said, Australia would continue to have intermittent, localised waves of Omicron.

“However, it is assumed that high vaccination rates and improved medical treatments, together with continued community adaptation to COVID‑19, will see the economic impact of future outbreaks continue to moderate,” the budget papers said. 

The hypothetical

The budget papers also considered two hypothetical scenarios: one where a new COVID variant took hold, and another where an “improved health situation” delivered a boost to confidence. 

Where the new variant took hold, it said a “longer and severe” illness would see increased absenteeism return to levels seen in January, with restrictions re-introduced. That would mean an $11 billion hit to the budget, it said.

However, it predicted a faster recovery than what had been seen since the Delta and Omicron waves.  

A woman wheeling a shopping trolley
The government is expecting a quicker bounce-back compared with last year’s waves if a new variant hits. (ABC News: Brendan Esposito)

If a new variant did not come along, the government predicted a surge in consumer confidence, a low unemployment rate and a $16 billion boost to its bottom line.       

More RATs 

In a separate announcement, the government said it would allocate an additional 10 free rapid antigen tests (RATs) per eligible concessional cardholder from 31 July.

It is in addition to the RATs already provided to Australians through its “concessional rapid antigen test program”.

In January, Labor committed to supplying a “limited” number of RATs free to all Australians if it won the federal election.   

The government said it would also ensure the costs of taking a COVID‑19 test to attend a place of work were tax deductible for individuals.

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