Bordering on dangerous: the economic case against opening states

The past week has seen numerous stories of the harsh effects of border closures on NSW residents living near the border with Victoria and Queensland. Residents are reportedly spending significant time on gaining the permits they need to go about their daily lives.

Even worse, some are being denied the ability to access key medical services – or as a number of poignant cases have revealed –to spend time with loved ones undergoing treatment.

A border sign between Victoria and NSW.Credit: Police Media

In light of this, some, including Deputy Premier John Barilaro, have called for a relaxation in the current border restrictions along the border between NSW, Queensland and Victoria. Barilaro – in wrapping up a "border tour" on Thursday – said: "Seven weeks ago we made tough decisions out of Sydney and tough decisions in protecting
the millions of people of NSW when the cases in Victoria, one, couldn't be traced and, two, were escalating at a rate beyond what anyone had seen even in the first phase of the crisis in March and April … [now] some of the numbers across the border are getting better. The risk profile is reducing and, therefore, there is an argument for a reset today to move forward."

Barilaro is right about the progress that has been made. And he is right that the government he is part of "made tough decisions and with that, unfortunately, it impacts on communities." But suggesting we reopen the NSW border right now is, as they say in poker, "calling the pot too early".

Prematurely relaxing restrictions risks undermining the very significant progress we have made in suppressing the virus. Let us not forget that only a few weeks ago, with case numbers rising, there was the very real possibility of NSW going back into lockdown.

The border closures have been a key part of getting the current case numbers down to the mid-single digits. But the fight against COVID-19 is not over yet in NSW.

Allowing more people to travel freely into Queensland from NSW thus risks further damaging lives and livelihoods there. The same is true, on an even greater scale, for movement from Victoria into NSW.

The impact of the current virus count and necessary government response to that, in Victoria, is already costing NSW hundreds of millions of dollars. But that number would rise exponentially if more cases spread from Victoria to NSW and NSW were forced to go back into category 3 or 4 lockdown.

The answer to the current border issue is not to lift current border restrictions but to fine-tune them to work better for residents of border communities.

Everyone must be able to access decent medical care and support children undergoing care – and this means the NSW government should foot the bill for quarantine stays by residents undergoing treatment in Queensland, or else pay to transfer those patients to Sydney.

And on the Queensland side, it means the health department must find ways to ensure that, with adequate testing and personal protective equipment, parents can visit children receiving medical treatment immediately, not after a mandatory two-week quarantine.

Similarly, farmers and small business owners on the border suffering as a result of border closures should be looked after by the federal government – via appropriate "business keeper" payments, or deductions on their annual tax returns, designed to recognise the additional time and cost associated with complying with border restrictions.

The answer to overly broad but sensible restrictions is almost always to narrow them rather than abolish them. And that is even true for restrictions aimed and protecting public health and the economy during a pandemic.

There are no shortcuts to returning to a world of both free movement and economic growth: both require aggressive suppression of COVID-19, unless and until a vaccine is widely deployed.

The fantasy that businesses can just bounce back, when restrictions are lifted, ignores the overwhelming evidence from overseas – that it is the virus, not lockdowns or border closures, that kills business and consumer confidence, and with it economic growth.

Protecting people and the economy therefore requires keeping restrictions in place for as long as is necessary to meaningfully suppress or eliminate the virus – not to get halfway there.

This can have harsh consequences, especially for those living in border communities. But our response to that must be to ensure that those who need it, and only those people, can gain appropriate exemptions or compensation – not to lift the bans helping maintain the physical and economic health of the entire NSW and Queensland communities.

Rosalind Dixon is a professor of law and director of the Gilbert + Tobin Centre of Public law. Richard Holden is a professor of economics at UNSW Sydney.