|Federal Treasurer the Hon Josh Frydenberg has today confirmed that the partial lock down which it has used to successfully control the CoVid-19 pandemic, has wiped $50 Billion from the Australian economy in the June quarter and is continuing to cost $4 Billion each week. The Treasurer also revealed that Treasury estimated that if the Government had followed the European approach of closing their economy completely, the estimated hit to Australia would have been some $120 Billion for the June quarter.
Forest product industries, as a vital contributor to the grocery supply chain through packaging and pallets products, and to the construction industry through timber framing and native hardwood building products, was one of those industries which the Government allowed to continue to operate – as long as strict hygiene and health protocols were implemented.
The Australian Forest Products Association (AFPA) commissioned Economist Tim Woods of consultancy IndustryEdge to assess the benefit to the national economy of the decision to allow forest product industries, which directly employ some 80,000 Australians in regional communities, to keep operating; noting that New Zealand had chosen to close the bulk of its forest industries for a month.
Mr Woods found that the Federal Government’s measured decision in Australia, mirrored by the States, to deem forest product industries “essential” meant the drop in Gross Domestic Product (GDP) was $2.5 Billion less than if closed down.
AFPA Chief Executive Officer Ross Hampton said, “The Treasurer and governments are to be congratulated for resisting some strident calls some weeks ago to completely turn off business in Australia. It is hard to imagine the depth of the potential economic depression this would have plunged Australia into and the long-term pain which our children would face with stubbornly high unemployment and huge national debt.”
The IndustryEdge research shows that for forest product industries alone that decision has meant an additional $2.5 billion has flowed through the economy over the last month. It has been fuelled by a demand for home construction products, pallets for moving food and groceries, toilet paper and sanitary products and other wood fibre-based packaging materials. It is also hard to imagine the community despair should these items have really been unavailable, instead of just temporarily absent from shelves due to hoarding in the early days of the lockdown.”
“The Government is to be commended for working hard to find a measured road back to full economic activity and utilising the CoVidSAFE app is a vital part of that approach. The forest product industries will continue to do its part in making Australia resilient,” Mr Hampton concluded.