A surfer at Bondi Beach in Sydney on May 6, 2021. Life has been close to normal in Australia throughout the pandemic. Photo: AFP/Saeed Khan

Australia set a new target of vaccinating all willing adults by the end of 2021 on Tuesday, hoping to speed a glacial vaccine roll-out that threatens the country’s pandemic success story.

Treasurer Josh Frydenberg – unveiling a free-spending, crisis-tinged budget – said the continuation of the country’s “roaring” economic recovery depended on “effective suppression of the virus.”

To that end, he said, the conservative government expected Australia’s borders to remain closed well into 2022 and for all adults “who seek to have that vaccine” to have received two doses by the end of the year.

Australia has ridden out the coronavirus pandemic by effectively sealing itself off from the rest of the world and with a series of snap local lockdowns.

It remains one of the few places where there is no widespread community transmission and daily life is relatively normal.

But very few Australians are immunized and there have been repeated outbreaks linked to quarantine facilities, raising fears success could be fleeting.

“We don’t know what is around the corner with respect to the virus,” Frydenberg said. “The assumption is that there will be new cases.”

So far Australia has delivered only 2.5 million vaccine shots, versus the roughly 50 million jabs needed to vaccinate the entire population – lagging other rich countries and the government’s own targets.

After a series of problems with vaccine delivery and the use of the AstraZeneca vaccine for those under 50, the government is now in talks to manufacture promising mRNA vaccines domestically.

Spend, spend, spend

Frydenberg also unveiled a new round of tax cuts and stimulus spending that could set the stage for an election as soon as this year.

Prime Minister Scott Morrison is seeking re-election and a fourth consecutive victory for his conservative Liberal-led coalition.  

Jettisoning the party’s traditional talk of belt-tightening and fiscal prudence, Frydenberg said “unavoidable” spending would see the deficit swell to A$161 (US$125) billion this year, almost 8% of GDP.

The government has committed A$291 billion to virus-related stimulus, including a swathe of tax cuts and income support that is equivalent to almost 15% of gross domestic product.

The deficit explosion was limited only by increased tax revenue – as people go back to work more quickly than expected – and surging iron ore prices.

“We’re giving a very big thanks to Western Australia and the iron ore industry,” Frydenberg said.

Amid fierce criticism of the government’s handling of a series of rape allegations by officials, the budget for the next year also sets aside A$2 billion for women’s safety, the bulk of which will go to childcare subsidies. 

Defense spending is expected to rise about 10% in the next three years, as relations with China sour and American security guarantees look less ironclad.