The long-term economic damage from hiding behind closed borders is as true for the virus as it is for the trade barriers that kept down living standards until the 1980s.
This year’s budget papers made the assumption – which the government was keen to emphasise was an assumption, and not a promise or a forecast – that the international borders will remain closed to (almost all) arrivals and departures until mid-2022.
This represents a further delay of about a year from what had been foreshadowed in the 2020-21 budget.
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Saul Eslake is former chief economist of ANZ Bank and of Bank of America Merrill Lynch in Australia, and is now principal of Corinna Economic Advisory based in Hobart.
