New virus of complacency will leave Australians idle

As Australians prepare for the Easter break, the relaxation this year has a completely different rhythm. A nation in shutdown because of coronavirus is already in a kind of holiday suspended animation. People are calling in to ask radio broadcasters to tell them what day it is when announcing the time.

Harsh restrictions on movement and gathering, working from home or not at all, and social isolation have put the economy into idle. Why? To flatten the curve of COVID-19 infections to a point where our hospital intensive care units can cope with the volume of critical cases, to save lives that can be saved. Chief Medical Officer Brendan Murphy says this “path of control and suppression” has bought us valuable time to prepare our disease-fighting resources. We are flattening the curve.

To date, only 8 per cent of the nation’s 6000 cases have required hospitalisation and ICU. The modelling our medical brains rely on, based on overseas data, confirms that with social distancing and an expansion in ICU capacity, everyone who needs an ICU bed in the course of the pandemic could access one. Some of the worst-case scenarios, simply letting the virus loose without curbs, would see almost 90 per cent of the population infected and ICUs overrun, with a daily demand for 35,000-plus ICU beds; only one-in-seven needing an ICU bed would get one. Our current medical strategy is working. Scott Morrison argues that, unlike many countries, we have the chance to respond from “a position of relative control”. “We can tailor our interventions to gain the most benefit and minimise the cost to society,” he said on Tuesday. Professor Murphy warns we must not fritter away the gains, so staying at home this Easter is a must. “Complacency is the biggest risk,” he says. Our leaders are not immune to the self-satisfaction virus either.

As well as saving lives, the goal must be to get our economy off life-support as soon as possible, at minimal cost. From the start, we have also been fighting an economic contagion, where complacency and policy drift can be just as dangerous. Economist Warren Hogan estimates the lockdowns will cost the economy $10bn to $15bn a month. A steep recession is being induced. The Morrison government’s disposition of “whatever it takes” is, as we described it on Saturday, a momentary neo-Whitlamist fiscal freak show. Three economic rescue packages are slated to cost $214bn, while a steady flow of niche measures — guarantees for private hospitals, free childcare and new health services — have added billions more. Add in state government emergency responses, as well as a slump in revenues, and the public sector debt bill is likely to be about $500bn.

We are not suggesting that national leaders have already slipped into a comfort zone or lost the plot. Certainly, the helter-skelter of the initial response, when medical officials were in the vanguard, has receded. Nor has the rescue spending been over the top. Better to do too much than too little in the short term. The key is to ensure the measures are targeted and temporary so, in the words of the Prime Minister, the nation can snap back — to mutual obligation and means-tested welfare arrangements, corporate self-reliance, liberalised trade, and free markets.

Picking this turning point will not be easy; nor will it be politically risk-free to pull back income support that people get used to, such as a doubling of the JobSeeker payment, the new $1500-a-fortnight JobKeeper allowance, or the changes to the partner pay income test for those on unemployment benefits.

As we have noted often in this crisis, the nine-member national cabinet acts co-operatively, swiftly and decisively. Yet politicians, however noble, diligent or community-spirited, do get an ego hit during a crisis. It does wonders for the standing of prime ministers, premiers and chief ministers. Poll ratings surge, voters hang on every word, even reporters ease off on what now seem like mundane questions of process and governance. Compared with these anointed saviours, political rivals can look like troublesome hacks or mere democratic accessories. The flip side is that the stakes are incredibly high. Failure is not an option.

But we do worry about the rhetorical promiscuity of the “new normal”. There is nothing normal about these times. Closing our borders to foreigners — the growth engine room of our new economy — and retarding commerce is definitely not normal. Sure, leaders need to prepare the community for what could be a painful six months of rolling disruptions; these novel social restrictions are alien to this land. But “sit-down money” is a curse. A $3000-a-month hiatus of beery backyard sessions and video-streaming binge nights looks very appealing to cashed-up young workers. But we need them to finish university studies and trades and get the economy roaring back to life.

Mr Morrison has flagged an exit strategy, because governments could not sustain support for an economy indefinitely in the deep freeze. The plan could see a series of trials, with some states easing restrictions earlier than others. Those moving first would get a competitive advantage, plus they would serve as test cases for others to learn from their experience. Areas hardest hit by COVID-19, such as NSW, Victoria and southeast Queensland, might learn lessons. When the time came, they could lift restrictions with confidence, Mr Morrison said. Pulling those levers will require nous and grit by state and territory leaders. The idea that restrictions could be in place until a vaccine is found, as NSW Premier Gladys Berejiklian suggested, is as absurd as it is defeatist. She retreated, rapidly, to another extreme: NSW restrictions could be lifted by May 1.

No one is suggesting the states and territories adopt foolhardy approaches, but they must be alive to opportunity and lift their game. There is money to be made in the upswing. We don’t mean by rent-seeking or grifting, although this free-money extravaganza can never stop those with an eye for the main chance. People with good ideas will emerge; they should be encouraged to flourish. State ministers must use this down time to prepare for economic revival. What taxes and charges can they forgo to attract investment and jobs? Are regulations on development holding back business formation? Do planning laws lead to optimal land use? National cabinet is a vehicle for getting things done in a crisis. But it can also be used as a prime mover to advance the “shifting the dial” productivity agenda, or even reforming the federation.

On Tuesday, the Prime Minister was asked by a reporter to sketch out what the nation would like after the crisis. He said the experience “will change many of us and our behaviours for a long time to come, and in some cases not in a necessarily bad way”. We will learn things. Mr Morrison noted COVID-19 would confirm that we need to be an open trading nation, which has been a core part of our prosperity for centuries. “But equally we need to look carefully at our domestic economic sovereignty as well, and these are issues that government, and particularly the federal government, is spending a lot of time focusing on at present,” he said.

Who doesn’t like being in control of their destiny? Stop idling and hop to it.

The pandemic is putting new strains on our infrastructure, crisis planning, medical stockpiles and manufacturing. A lack of capability is being exposed as countries retreat to fortresses. So industry policy is back in vogue, the stale whiff of protectionism emanating from regional rumps. Let’s be sensible and strategic. Of course we want to be a country that makes things, from dunny paper to the world’s most expensive submarines. But we are at our best when we export to the world, not when we push scarce resources into sectors that cannot compete globally. Mr Morrison has appointed a business advisory group to work with officials to map a trajectory out of the economic morass. Private business must be at the heart of it, but not via subsidies. We can’t allow the traumas of COVID-19 to take Australia back to the Leyland P76.

We are approaching a moment of policy transition. Medical experts have guided public messaging and social restrictions, until now. The very fact we have not had the medical calamities of Italy, Spain or the US, for instance, is testament to their sound advice and our compliance. The medicos ensured politicians moved early and hard with travel bans and quarantine. The falling rate of infections and more local data about community transmission will give authorities confidence to calibrate the next moves. The challenge for our political leaders is to find a medical setting, more likely site-specific settings, to protect the most vulnerable while getting oxygen back into the economy. A mighty fiscal transfusion is boosting household income, but there’s precious little to spend it on during a shutdown. Before winter, we have to establish what infection rate we can live with, given a vaccine is a long way off. Our politicians can’t take it for granted that the economy will eventually right itself. Without leadership and courage, and a strategy for economic resurrection, idle Australia will lose muscle mass, motivation and direction.