Assuming that the bug has not already spread across the borders and hit us just when our guard was down, there will be some other effects, caused by supply chains being broken or their speed being slowed down. But looking at the employment numbers by state and territory as well as federal Treasury’s economic numbers during those terrible months of Victoria’s second lockdown, the main victim will be the state that has to batten down, not the other ones looking on.

There is another Treasurer, also from Victoria, who does have good reason to be worried about developments in NSW. That’s Treasurer Josh, who has himself spent up big in his most recent budget in an effort to blast the nation out of recession. $51.4 billion is coming our way in turbo-charged tax cuts that are meant to enable us to spend our way to recovery.

But that won’t happen if our biggest state is in economic hibernation. Tax cuts received there will not end up in shops but in the bank, by virtue of state government decree. With a federal election due at the end of next year, that’s the last thing our federal treasurer will want to see especially with a federal deficit that’s north of $200 billion.

These are particularly challenging times for Treasurer Josh for another reason. Faced with this awful prospect, will he urge Premier Gladys to ease up on any lockdown in the way he repeatedly did to Victoria during its second lockdown?

Will he take the risk that an outbreak can be managed successfully, or will he have a look at what has happened in the UK, the US and Europe whose governments keep trying that trick only to end up imposing another more economically damaging lockdown? Maybe he will go on telly again and talk of “serious consequences” should Premier Gladys follow Premier Dan, and will rely again on that curious claim that lockdowns cost more than you can imagine.

NSW Premier Gladys Berejiklian announces new restrictions on Sunday.

NSW Premier Gladys Berejiklian announces new restrictions on Sunday.Credit:James Alcock

But what if Premier Gladys listens, and NSW does end up like the UK, Europe and the USA? We are down the international queue for the best vaccine, so there will be no early relief for us from that quarter, unlike those indecisive governments in the UK and the USA.

All this spells an awkward time for the federal government more broadly. If economic recovery is delayed but big deficits and debts end up being even bigger and lasting longer because of the outbreak in NSW, the next federal election could well go down to the wire. Expect Labor to come out fighting in the new year. They will point to a failed economic and coronavirus strategy. They might even point to a prime minister who has a curious gift of going on holidays just as things turn sour.

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But for now all that is premature. Let’s not forget that, fortuitously, it is summer here, when that bug does causes carnage when the weather turns cold. It might be that gold-plated contract tracing does what it’s meant to do, and we avoid a health as well as an economic bullet in the nick of time.

Whatever happens, expect Treasurer Tim to have a restless night on Christmas eve. But its Victoria’s other Treasurer who has most reason right now to be concerned.

Professor David Hayward is Emeritus Professor of Public Policy at RMIT University.

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