Australia to lose $60bn on account of lost wages

New analysis by Deloitte Access Economics puts the cost of COVID-19 at $60 billion, with estimates showing that cafes, restaurants, pubs and hotels will be short of $8 billion in lost wages and profits in the next handful of months.

“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 follow closely, with Australia’s empty gyms, sporting fields, entertainment centres, conference centres, movie theatres and playhouses expected to cost close to $6.5 billion.

However, professional services are not too far behind, with Deloitte forecasting accountants and lawyers will lose over $4.5 billion as the workload drops.

At the other end of the scale are sectors where taxpayers pay many or all of the bills, meaning that income losses are rather smaller.

Although universities and colleges that rely on foreign students are trimming their staff numbers, lost income in education remains small.

Then there’s the public sector itself. Outside some public-run libraries, museums and galleries, it too is running as normal, and it hasn’t seen the cuts to wages evident in most other sectors.

A surprise packet in this list is retail, which is predicted to take a $3 billion hit, despite store closures. According to Deloitte, while the hardest hit parts of that sector are obvious in any shopping mall and in a series of high-profile layoffs and stand-downs, supermarkets and a surge in online sales have softened the blow.

And the good news?

While these income losses are awful, Mr Richardson opined that the worst may soon be over.

“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,” he said.