BSB113 Final Report Semester One 2021 PDF

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BSB113 Final Report Semester One 2021....

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BSB113 Research Essay SEMESTER 1, 2021 Tutor: Ammar Aripin Word Count: 1,406

Ella Hatten-Masterson n10754601 |

Table of Contents Introduction.............................................................................................................................2 Context....................................................................................................................................2 Theory.....................................................................................................................................4 Critical Analysis........................................................................................................................6 Conclusion................................................................................................................................6 Reference List...........................................................................................................................7

Introduction The COVID-19 pandemic has become one of the most severe global outbreaks costing countries significant social and economic loss. To stimulate economic recovery and improve both health and societal wellbeing, the Australian Government has enacted a vaccination rollout, securing over 150 million doses for Australian’s free of charge (Minister, 2021). This essay will highlight the social and economic impact of COVID-19 and the rationale behind Australia’s COVID-19 vaccination strategy. Economic theory will be used to justify the government providing the vaccine for free and critical analysis will be used to explore the importance of government intervention and the challenges faced.

Context The effects of COVID-19 have caused both a public health emergency and profound global economic shock causing social disruption and significantly impacting the well-being of Australians (Commonwealth of Australia, 2020)

Figure 1: % of Businesses Impacted Due to COVID-19 Government Restrictions

% of Industry Effected

% of Businesses Impacted Due to COVID-19 Government Restrictions 100 90 80 70 60 50 40 30 20 10 0 es es ing ng es ion de ade ng ns es es es ng ce es es vic rvic in turi rvic uct Tra l Tr ousi atio rvic rvic rvic aini tan rvic rvic r i r e M e c c e e e e e i t h l s a Tr sis S e S e S s a S uf te S ons esa Ret are un ce S te ort nd As on er od ical n l m h s a o a al C o n t a ti f p W h M Wa Ot hn d d com ura l Es up ion oci rea n W S s t an tec c S d a le n In ea nd n ca d e d Re al ra st d T and nd R e a Edu e an nd t i o an e o a t n c v a P a l r a ti od tifi ia g a t, W Ca rts or edia anc irin istra h om ien A s, t p c l a c s a in G n M F i n t, H Ac , s e , a n m H y n n Tr tio cit Ad Re si o a tri es c m f r e o fo El Pr In

Industry

Data Source: (Australian Bureau of Statistics, 2020b) The Australian governments necessary business restrictions and lockdowns have been most detrimental to the arts and recreational services (94%) and the accommodation and food services

industry (84%) (figure 1). Australia’s unemployment rate rose 6.2 per cent in April of 2020 and the economy shed 594,300 jobs (Odihi, et. al., 2020; O’Sullivan, et. al., 2020). By this point, the government announced its third economic stimulus package - the Job Keeper payment scheme further supporting businesses and individuals (Australian Bureau of Statistics, 2020b). This resulted in a record high subsidy payment of $55.5 billion and reduced tax income received (Australian Bureau of Statistics, 2020a).

In response to such economic and social collapse, the Australian government has enacted a vaccination rollout aiming to achieve herd immunity, slowing the spread of COVID-19 and reducing the risks associated with a vulnerable population such as a person’s physical and financial state (Commonwealth of Australia, 2021; Odihi, et. al., 2020). Immunisation is one of the most successful public health interventions of the past 200 years, protecting against disease and strengthening the immune system to fight specific diseases (Commonwealth of Australia, 2021). The Australian government is aiming for a 95 per cent vaccination rate and Australian families have demonstrated that Australia is a vaccination nation (Ting, et. al., 2021). By implementing the vaccine rollout, outbreaks will be reduced, stimulating health, social and economic recovery and preventing the need for preventative measures such as border closures and travel restrictions (Commonwealth of Australia, 2021).

Figure 2: COVID-19 Vaccinations Administered in Australia

Number of COVID-19 Doses Administered 9000 8000

Doses Administered

7000 6000 5000 4000 3000 2000 1000 0 22-Feb

23-Feb

24-Feb

25-Feb

26-Feb

Date

Data Source: (Briggs, 2021)

27-Feb

28-Feb

1-Mar

2-Mar

Australia’s goal is to have all Australian’s vaccinated by the end of October and to achieve this, Australia needs to be administering more than 250,000 doses every day (Briggs, 2021). Unfortunately, Australia is yet to have administered more than 10,000 doses in a single day and therefore Australia will need to speed up their rate of doses administered to achieve its target.

Theory The COVID-19 vaccination is a global public good, made available to all of society by the government as it is non-rival and non-excludable in consumption (UNESCO, 2021; Garnett, et. al, 2019). The economic theory which correlates to Australia’s vaccination rollout is positive externalities, occurring when production or consumption of an activity benefits a third party not directly involved and the social benefits outweigh the private benefits (Garnett, et. al, 2019). Figure 3 presents a supply and demand graph of positive externality in consumption of the COVID-19 vaccine. Figure 3: Supply and Demand Graph for Positive Externality in Consumption Cost/Benefit of COVID -19

Positive Externality

vaccination

Deadweight loss Supply

P Efficient

Efficient Equilibrium

P Market

D 2 = Social Benefit Market Equilibrium

D 1 = Private Benefit Q Market

Q Efficient

Quantity of vaccinations

The effects of delivering vaccinations to all Australians free of charge generates a positive externality in consumption. As seen in figure 3, the private benefit of an individual being immunised is represented by D1 and the point in which the Pmarket and QMarket meet on the curve represents the market equilibrium. The social benefits of an individual being immunised are represented by D 2 and are more than D1. This is because consumption of the COVID-19 vaccination benefits individuals by

protecting them from the disease, strengthening health care as well as promoting social and economic recovery on a regional and global scale (Rodrigues & Plotkin, 2020).

The shift in the demand curve to the right is caused by an increase in consumption of the vaccine as a result of providing the vaccination for free (positive externality). Because the number of people consuming the vaccine is larger in the efficient economy, the demand outweighs the supply of the vaccine and therefore causes a deadweight loss. When too little of the vaccine is being consumed at the market equilibrium, more people need to be vaccinated to move to an efficient equilibrium. This allows the social marginal cost to equal the social marginal benefit, resulting in the maximisation of economic surplus and the elimination of the deadweight loss. As the benefits of the vaccine are increased – reaching beyond individual benefits – so does the demand and therefore quantity of the vaccine meaning the demand curve is downward sloping.

If the uptake of the vaccine was left to the market and provided by private sectors, the vaccine wouldn’t be free and therefore the demand would decrease as not everyone would be able to afford it. In providing the vaccine for free, the rollout supports the uptake amongst all Australian’s and not just those who can afford it. The Australian Government has secured agreements for the supply of four COVID-19 vaccines, provided they are safe and effective (Commonwealth of Australia, 2020). The supply effect of the vaccine dominates the outcome and with very few vaccines available to the market the supply curve is limited because if one vaccine is not safe for consumption, then the supply curve will shift to the left decreasing the equilibrium quantity (Wong, 2021). As demand for vaccine quantity increases, so does the quantity supplied and therefore it’s up to the government to ensure demands are met by providing potential incentives to further research and development to maintain vaccine supply. As the number of people wanting the vaccine increases due to the benefits of protection from the disease, the number of vaccines supplied increases to meet consumer demand which causes the supply curve to slope upwards. (Garnett, et. al, 2019)

Critical Analysis The results of COVID-19 have inflicted severe economic and financial costs on regional and global economies, warranting collective action and global investment into vaccine development and distribution [CITATION Ras \l 3081 ]. In the initial stages of the pandemic, the absence of a vaccine caused global market failure however, through the Australian government’s intervention scheme, vaccination rollout has commenced promising the correction of such failure. As COVID-19 isn’t likely

to disappear shortly, active international action supported regionally is required to save lives and protect economic prosperity [CITATION Ras \l 3081 ]. By the government intervening, universal assistance is provided, reducing the rate of population contact and mitigating virus transmission (Pettinger, 2019). Being a public good, the government can provide the vaccine for free to everyone rather than the inflated price of the private sector (Pettinger, 2019). If a successful vaccination rollout isn’t achieved and the distribution of the vaccination isn’t efficient, market failure will occur causing the continuation of economic recession and social harm (Pak, et. al, 2020).

Being the biggest and most complex inoculation campaign in Australia’s history, the rollout has presented considerable challenges regarding the rate of vaccines that can be administered each day (5; Ting, et. al., 2021). This is due to delays in international supply, local production and delivery of vaccines both to and within Australia (Ting, et. al., 2021). More recently, the announcement that the AstraZeneca vaccine is no longer suitable for under 50s has caused the number of daily vaccines to drop and Australia to fall drastically short of their target, delivering only 53 per cent of their 63,140 doses allocated to that first week (Ting, et. al., 2021). As uncertainties remain regarding information and hesitancy towards the vaccine, there is concern that those over 50 are cancelling their inoculation appointments (Ting, et. al., 2021). Hence, issues affecting vaccination rates that have prompted public hesitancy are proving problematic in achieving successful vaccination rollout.

Conclusion In conclusion, COVID-19 has proved catastrophic damage, killing millions of people, straining health resources and impacting the livelihoods of everyone. With the approval of multiple vaccines now accessible for use, the Australian government has secured 4 vaccines in the hopes of achieving herd immunity. As the vaccine is a public good, the government will provide it free of charge to restore society and minimise transmission. However, challenges such as delays in travelling and supply and the most recent announcement of AstraZeneca no longer being fit for consumption for people under 50 have raised concern about the vaccine and hindered administering rates.

Reference List

Australian Burea of Statistics. (2020a, September 2). Economic activity fell 7.0 per cent in June quarter. Retrieved from Australian Bureau of Statistics : https://www.abs.gov.au/mediacentre/media-releases/economic-activity-fell-70-cent-june-quarter Australian Bureau of Statistics . (2020b, June 11). Measuring the impacts of COVID-19, Mar-May 2020. Retrieved from Australian Bureau of Statistics : https://www.abs.gov.au/articles/measuring-impacts-covid-19-mar-may-2020 Briggs, C. (2021, March 4). Australia's COVID-19 vaccine targets will require a dramatic ramping up of our national rollout . Retrieved from ABC News : https://www.abc.net.au/news/2021-0304/australias-covid-19-vaccine-targets-dramatic-ramp-up/13212836 Commonwealth of Australia. (2020, November 13). COVID-19 vaccination - Ausstralian COVID-19 Vaccination Policy . Retrieved from Australian Government : https://www.health.gov.au/resources/publications/covid-19-vaccination-australian-covid-19vaccination-policy Commonwealth of Australia. (2021, April 23). Why should I get vaccinated for COVID-19 . Retrieved from Australian Government : https://www.health.gov.au/initiatives-and-programs/covid-19vaccines/getting-vaccinated-for-covid-19/why-should-i-get-vaccinated-for-covid-19 Garnett, A., Lewis, P., Hubbard, G., & O'Brien, A. (2019). Essentials of Economics. Melbourne: Pearson Australia Group Pty Ltd. Minister, P. (2021, February 21). First COVID-19 Vaccinations. Retrieved from Prime Minister of Australia : https://www.pm.gov.au/media/first-covid-19-vaccinations Odihi , D., Wats , Watts, E., Broucker, G., Sriudomporn, S., & Patenaude, B. (2020, December 22). Economics of COVID-19 Vaccines. Retrieved from Coronavirus Resource Center: https://coronavirus.jhu.edu/vaccines/report/economics-of-covid-19-vaccines O'Sullivan, D., Rahamathulla, M., Pawar, M. (2020). The Impact and Implications of COVID-19: An Australian Perspective. The International Journal of Community and Social Development. https://doi.org/10.1177/2516602620937922 Pak, A., Adegboye, O., Adekunle, A., Rahman, K., Mcbryde, E. & Eisen, D. (2020). Economic Consequences of COVID-19 Outbreak: the Need for Epidemic Preparedness. Perspective Article. https://doi.org/10.3389/fpubh.2020.00241 Pettinger, T. (2019 , November 1). Pros and cons of government intervention. Retrieved from Economics Help: https://www.economicshelp.org/blog/151818/economics/pros-and-consof-government-intervention/

Rassenfosse, G., Foray, D., Younes, G., Ayoubi, C., Ballester, O., Cristelli, G., Zhou, L. (2020, May 6). The take of innovation economists on the COVID-19 crisis. Retrieved from VOXEU: https://voxeu.org/article/take-innovation-economists-covid-19-crisis Rodrigues, C. & Plotkin, S. (2020). Impacts of Vaccines; Health, Economic and Social Perspectives. Old and New Challenges In The Development of Vaccines to Protect Against Infectious Diseases. https://doi.org/10.3389/fmicb.2020.01526 Ting, I., Shatoba , K., & Workman, M. (2021, May 10). Tracking Australia's COVID vaccine rollout numbers. Retrieved from ABC News: https://www.abc.net.au/news/2021-03-02/chartingaustralias-covid-vaccine-rollout/13197518?nw=0 UNESCO. (2021, February 24). UNESCO calls for COVID-19 vaccines to be considered a global public good. Retrieved from UNESCO: https://en.unesco.org/news/unesco-calls-covid-19-vaccinesbe-considered-global-public-good#:~:text=Press%20release-,UNESCO%20calls%20for %20COVID%2D19%20vaccines%20to,considered%20a%20global%20public%20good Wong, A. (2021, February 10). Vaccine nationalism: Rich nations must also care for the poor . Retrieved from The Interpreter: https://www.lowyinstitute.org/theinterpreter/debate/economies-brink-covid-19-effect...