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Omicron unlikely to be the last variant: Frydenberg

Treasurer Josh Frydenberg has urged Australians to remain calm as the new Omicron variant of COVID-19 presents fresh challenges.

2 December 2021

On Wednesday (1 December), Mr Frydenberg outlined the economic toll the Delta variant has had on the nation. During the September quarter, the Australian economy contracted by 1.9%.

While the Treasurer noted that this was better than market expectations, it is also the third-largest quarterly contraction on record following the 6.8% fall in the June quarter last year and a 2% fall in the June quarter in 1974.

Sydney metro was in lockdown for the entire September quarter, while Melbourne metro was in lockdown for about two‑thirds of that period,” Mr Frydenberg said. 

“In response to these lockdowns, the Morrison government provided very significant economic support. We established the COVID Disaster Payments, which provided $12.9 billion to around 2.4 million Australians who lost work and we partnered with the states to provide around $13 billion in business support to those affected.

“At the same time, $10.2 billion in tax relief flowed to 11.5 million Australians during the September quarter. These were the largest tax cuts to flow in a single quarter for over two decades.”

Fresh economic data reveals the impact that lockdowns have had on different parts of the country. For example, the NSW economy contracted by 6.5%, the ACT’s economy by 1.6% and Victoria’s economy by 1.4%. Meanwhile, growth in the other five states and territories continued to rise, up 1.6% collectively for the quarter.

But the headline figure for Mr Frydenberg was the 4.8% fall in household consumption, the second-largest in Australia’s history.

“Driven by the health restrictions, spending fell in 11 out of 17 consumption categories, including falls of more than 40% in transport services and more than 20% in hotels, cafes, restaurants, clothing and footwear,” he said. 

“We must live with the virus.”

The Treasurer said there would be challenges ahead, but highlighted that vaccination rates in Australia had risen to be among the highest in the world.

“We can and we must live with the virus and its variants. Omicron is not the first and it is unlikely to be the last variant that we face,” Mr Frydenberg said. 

“But we must hold our nerve and cool heads must prevail. With world-leading health and economic outcomes, Australians have put themselves in a very strong, and indeed, the best possible position going into 2022.”

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