Donald Trump’s assertion that the US economy will be open by Easter is just a typically extreme version of the fundamental division dogging Australia’s response to the coronavirus.
That’s because of the belief it’s still possible to make a distinction between saving lives and saving livelihoods, between now shutting down the virus without shutting down the economy. The real problem will be if this ends up being a false choice.
On the gloomier scenario, growing economic devastation will only be greater and last longer unless the virus is contained more quickly through far more drastic measures being implemented as soon as possible – at least temporarily.
But this is not the Morrison government’s approach – not yet anyway.
The Prime Minister argues it is “important for our economy that it continues to operate and function as much as possible” as long as possible. He warns that the commentary wishing for much tougher lockdowns should “be careful what you wish for”.
If the medical advice changes, the government will then contemplate changing too, according to the Prime Minister. But he insists that because measures would need to be in place a long time – in his view, for six months rather than six weeks – it’s better to wait.
Australia’s approach becomes a gamble that its medical advice will prove more right than wrong.
Yet premiers, backed by a growing body of opposing medical advice, are increasingly dubious about following Canberra’s logic and timing on this point – especially in NSW and Victoria. These states are moving to much tougher lockdowns very soon. Federal Labor has also now moved to attack mode, saying the Morrison government is not moving quickly enough.
These arguments are not just because of shocking evidence of millions of jobs already being lost via partial shutdowns as more people are told to stay at home. It’s the uncertainty of how much longer the economic misery will go on – yet without being effective enough to stop the rapid escalation of the virus. The decision by Solly Lew on Thursday to shutter all his stores and lay off 9000 staff is just one more example of an economic unravelling chasing a faster-moving virus.
But other Australian businesses, including some big retailers, maintain that with strict social distancing measures now in place, it is still possible to remain open without contributing to the spread of the virus – and therefore for those businesses to keep employing many more people who would otherwise bejoining the long lines outside Centrelink.
Wesfarmers, for example, has had to stand down its staff and shut its New Zealand Kmart operations as well as Bunnings stores except for very limited trade customers and products. But in Australia, Wesfarmers has instituted major operational changes, including cleaning procedures and strict social distancing measures to allow it to continue operating in a way chief executive Rob Scott says is a safer manner for customers and staff.
He says this also enables the company to keep paying tens of thousands of employees – which would be impossible without revenue. That is why he prefers the Australian government’s approach over New Zealand’s.
Of course, Scott acknowledges it’s much easier to apply appropriate safeguards in large, well-ventilated stores than in smaller retail shops or restaurants where people congregate. It also helps that customers are more keen to buy basic home or office supplies from Bunnings or Officeworks than, for example, fashion apparel.
“We have to manage the health risks but we should really be doing everything in our power to keep things moving, acknowledging there are some things we can’t do,” Scott tells The Australian Financial Review.
“If the infection rates continue to go up then we obviously as a country are going to have to move to more draconian measures. But at the moment, and I don’t just say this from a self-serving point of view, shutting down a 5000-square-metre store is probably a fair way down the list of things that would reduce the spread of the disease, but it would have a dramatic impact on tens of thousands of families.”
More than business at stake
How much those infection rates go up is key to much more than Wesfarmers’ immediate future, of course. The Morrison government’s medical advice relies on the fact most identified cases are linked to international travellers and their contacts. That’s compared to a still relatively low level of community transmission that occurs for no known reason and with no link to international contacts.
On Wednesday, that number was 115 cases with another 430-plus under investigation, as opposed to more than 1600 cases contracted from overseas travel and nearly 500 from their contacts.
The hope is that with travel drastically curbed, isolation restrictions in place and contact tracking increased, the rapidly escalating rate of the virus will soon slow down.
The alternative medical advice is that a much tougher lockdown is now required to have any hope of “flattening of the curve” despite the shocking economic impact. This is due in part to the initial failure of authorities to properly track and isolate tourists or returning travellers as potential carriers, including those with no symptoms. This would have required far more aggressive preparation and widespread testing from the beginning, even of asymptomatic people
Given such targeting and enforced quarantining did not happen and even modest improvements like routine temperature checking still don’t occur, Australia’s approach becomes a gamble that its medical advice will prove more right than wrong. Australians must hope there are not many more people undiagnosed and unknowingly spreading a virus already beyond the reach of “proportional” measures.
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