Forging a recovery while containing a mini-spike

The last day of the 2019-20 financial year was a significant point in Australia’s post-coronavirus recovery. Despite Melbourne’s COVID-19 woes, the nation overall is moving steadily towards functioning alongside the virus. We are in a position many other countries, such as the US, which had more than 38,000 new cases overnight, can only envy. Outbreaks in Melbourne during the past fortnight are unlikely to be Australia’s last mini-spikes as we learn to balance opening up the economy with containing the virus. While COVID-19 remains abroad, elimination is not a realistic prospect at this stage, authorities agree. But the necessary severity of the stay-at-home measures announced on Tuesday by Victorian Premier Daniel Andrews, to be reinforced with police patrols, should be a wake-up call. Restricting residents from 37 northern and western Melbourne suburbs to leaving their homes only for work, school, care or care-giving, daily exercise and buying food and essentials is a reminder of the cost of ignoring vital precautions against the virus. Other postcodes could follow if the outbreak is not contained. Hand sanitising, social distancing and staying home when ill must be practised by all as life returns to something resembling what it was before the pandemic. Victoria’s restrictions, appropriately, are extensive, localised, proportionate and temporary. They will, however, slow the recovery of our second-largest state and that of the national economy.

Better late than never, and in time for the second week of NSW school holidays, Queensland Premier Annastacia Palaszczuk will open her state’s borders from July 10 to visitors from all states except Victoria. She also has eased restrictions for sporting stadiums, restaurants, cafes, bars, casinos, churches and gatherings. The internal measures are expected to be worth about $1.8bn a month and 167,000 jobs. The relaxation of borders will help the struggling airline industry. It also will be the difference between some hard-pressed businesses surviving or going bankrupt, and workers holding their jobs or lining up for the dole, especially in areas such as Cairns, the Whitsundays, the Gold and Sunshine coasts. For now South Australia, Western Australia and Tasmania remain in limbo for no good reason. In the public interest, the least they should do is adopt an approach similar to that of Queensland. They should be rational and brave, open up and exclude Victorians until the mini-outbreak is under control. Not unreasonably, people entering Queensland from Victoria will, for now, be made quarantine at their own expense.

While making sensible announcements, Ms Palaszczuk could not resist a churlish dummy spit. With an eye on the state election in three months, no doubt, and knowing that a bit of Canberra-bashing normally goes down well in her state, she whined that Queensland had been “singled out”. Scott Morrison, she complained, had allowed “border wars” to erupt between states and territories. These, in reality, were fanned by state leaders, especially Ms Palaszczuk herself and WA Premier Mark McGowan. The Morrison government has been consistent — borders should be open, in line with medical advice to the commonwealth. In so far as Queensland was “singled out”, it was to point out the catastrophic cost to its tourism industry of its border closures.

The Morrison government must turn its attention to one of the supreme paradoxes that has emerged as sectors of the economy return to normal. On Tuesday’s front page, we revealed that despite surging unemployment, business owners are struggling to recruit staff as some of the jobless opt for the dole over work. From the outset, we cautioned that some of the federal government’s COVID-19 assistance measures would need to be wound back as soon as practical: “The fiscal response is not a permanent condition,” we said on April 3. “The state may be your mate now. When this crisis passes, let’s get back on our own feet.” National Skills Commission data shows one in two employers who are struggling to recruit workers say their main challenge is a lack of applicants. That suggests it is time to dispense with measures creating an impediment to rebuilding the workforce, at least in regions and sectors on the road to recovery. Anecdotal reports suggest small and large businesses are affected, the Prime Minister has said. JobSeeker is costing taxpayers and the budget bottom line about $1.7bn a fortnight, including $826m for the coronavirus supplement, which is due to finish on September 24. If it is impeding the productive economy it should be reviewed sooner not later, with a view to reducing the impost on taxpayers.

It is an encouraging sign that employers have taken about 250,000 Australians back on to their books since mid-April. This represents about a third of the jobs lost in the initial four weeks of the COVID-19 crisis. There remains a long way to go, however, with Australian Bureau of Statistics figures showing there are still 670,000 fewer payroll jobs than before the pandemic. Business lending fell by 0.6 per cent in May, the steepest fall in nine years, suggesting many businesses remain in “survival mode’’ rather than looking to invest and expand. As Citi chief economist Josh Williamson says, the signs are good but recovery is slow. Confidence among consumers and businesses will be vital in building a return to prosperity. That is why, aside from dealing with temporary COVID-19 setbacks with short, sharp measures, it is vital to avoid a “stop, go, stop, go” approach to opening up economic and everyday life, as Mr Morrison has said.

At the start of a new financial year, governments must learn from mistakes in Victoria and other states — such as too relaxed an approach to Black Lives Matter protests that sent the public the wrong messages and lack of screening of all overseas arrivals in quarantine. Australia, while far ahead of most nations in opening up, remains on a steep learning curve. The challenges are rebuilding, growth and embarking on economic reform while containing what is a stubborn, relentless virus.