(Australian Associated Press)
A coronavirus vaccine is expected to be rolled out across Australia by late next year, according to one of the federal budget’s key assumptions.
The economic outlook released on Tuesday warns the likelihood of forecasting errors is larger than normal, with further outbreaks or a fast-tracked immunisation program possible.
Australia’s economy is predicted to grow 4.75 per cent next financial year after reaching the depths of the pandemic-triggered recession.
The forecast assumes a population-wide vaccination program would be in place across the country in late 2021.
General social distancing restrictions would continue in the meantime.
Victorian restrictions are assumed to gradually lift over the remainder of this year as case numbers fall, putting the state on par with others by Christmas.
State borders are expected to reopen by the end of the year, with the exception of Western Australia, which Treasury predicts won’t allow interstate travel until April 2021.
A gradual return of international students and permanent migrants is also assumed through next year.
The outlook also looks at the impact of finding a vaccine faster or crippling outbreaks.
Under the best-case scenario, a vaccine would be rolled out from July next year resulting in a $34 billion economic boost from the main forecast.
But Victorian-style outbreaks triggering lockdown in parts of the country could cost the economy $55 billion.
The downside scenario is based on a quarter of the national economy being under severe containment measures between the start of next year and mid-2022.
Population growth is expected to slow to its lowest in more than 100 years, falling from 1.2 per cent in 2019/20 to 0.2 per cent in 2020/21, then rising to 0.4 per cent in 2021/22.
That is mainly attributed to net overseas migration falling to negative 72,000 people this financial year, before improving to negative 22,000 the following term.