Controlling coronavirus vital in restoring economy, jobs

The clock is ticking, as Scott Morrison said on Friday, when it comes to the economic support measures seeing Australians through the coronavirus pandemic. For now, 6.1 million people are being supported by the JobKeeper program and 1.6 million by JobSeeker. The government has got Australians’ backs but there is no money tree at the back of the parliamentary garden, as Josh Frydenberg has pointed out. In an interview with Simon Benson on Monday, the Prime Minister identified the need to forge a new pact between workers, business, community groups and government to foster productivity and economic recovery. It is in the interests of all sectors that such a challenge be approached in the co-operative spirit that has stood the nation in good stead through the COVID-19 crisis. Co-operation would increase the chances of businesses and jobs being salvaged, confidence being restored and new opportunities being created. On the anniversary of his stunning election win last year, Mr Morrison has also recognised the opportunity to build a more effective federation post-pandemic. It is a worthwhile aspiration. The COAG process has been mired in red tape and bureaucracy for too long.

For good reason, as Mr Morrison told Benson, avoiding a second wave of infection was his main priority for now. The Reserve Bank concurs. Controlling the virus, the RBA said recently, would allow a stronger economic recovery, limiting near-term damage to business and household balance sheets and driving a faster economic recovery. Australia’s success in getting the virus under control allows us to face the challenge of economic rebuilding from a stronger starting point than most nations. Some of our closest allies, such as the US and the UK, and other G20 nations, face the same economic imperatives while still struggling to prevent hundreds of deaths a day from COVID-19. Australians recognise the success of our health system in curtailing the virus to date. Almost 70 per cent of respondents in the latest Newspoll, published on Monday, are confident about the preparedness of the public health system. And 80 per cent are confident about the amount of information provided about how to protect themselves. Many of the crowds flocking to beaches, parks, cafe strips and shopping precincts at the weekend might need a reminder, however. States need to double down on the social-distancing and hand-washing messages as they further ease restrictions.

Provided proper precautions are taken, the public’s enthusiasm for getting out and spending is a positive. But governments and business agree that allowing the economy to open up, then having to backtrack and reintroduce restrictions in response to larger-than-expected outbreaks, would be disastrous for the recovery.

Vital as the health response to coronavirus has been and must remain, the next two to three months, as John Howard warned last week, will be much harder for the government than the past two to three months. The public, Mr Howard said, is likely to expect the country to exit the pandemic with as much finesse as the health threat was handled at its peak. The international economic shambles will impact on Australia. And the heavy toll of the COVID-19 crisis on the nation’s entrepreneurial class, reported on Monday, is a sign of the damage that has been caused. Australian National University research shows that more than four in five self-employed Australians have suffered a significant hit to their income.

The dilemma the Morrison government faces, as Paul Kelly has written, is that current support being provided through JobKeeper and other measures is unsustainable in the long term. On the other hand, if the economy is not strong enough to sustain jobs when JobKeeper is due to end after six months, the government will face the problem of what to do.

While Mr Morrison will be held accountable in political terms, much will depend on the states and their willingness to let their economies open up, while at the same time guarding against the virus. One key point to be resolved will be when to reopen state borders to allow domestic travel for business, family reasons and holidays. The issue has emerged as a bone of contention between NSW Premier Gladys Berejiklian and Queensland Premier Annastacia Palaszczuk. The challenge for Ms Palaszczuk is to strike the right balance between sensible precaution and the need for economic rebuilding. The same goes for Mr Morrison, who says “we cannot allow our fear of going backwards from stopping us from going forwards”.

At the same time, he acknowledges that Australia is no more immune to COVID-19 than it was three months ago and that the “right here, right now’’ of keeping the virus in check must not be overlooked. Strong protections have been built into the health system. But until the virus is no longer a threat, economic rebuilding will remain a difficult challenge.