Revisit Covid modelling to open Victorian economy
The Andrews government’s $3bn support package in cash grants and tax relief, and deferrals for Victorian businesses crippled by the coronavirus lockdown, is a modest lifeline. It comes in the depths of an economic lockdown the federal Treasury believes is costing about $1bn a week. As Scott Morrison said on Sunday, the package announced by Premier Daniel Andrews is consistent with Reserve Bank governor Philip Lowe’s advice to national cabinet that the states should provide additional economic support in response to the fallout from the COVID crisis. But, while it will help business bottom lines, what they really need now is the chance to open up and operate. For some small businesses it is too late. They are closed for good as Graeme Samuel, former chair of the Australian Competition and Consumer Commission says: “And there is the flow-on effect up the line to suppliers and manufacturers’’.
Under the package, payroll tax for businesses with payrolls up to $10m will be deferred for the 2020-21 financial year, providing a $1.7bn “cashflow boost’’. Not unreasonably, Australian Industry Group Victorian director Tim Piper said the decision not to waive payroll tax payments for this year was “extremely” disappointing. The companies liable to repay the amount being deferred, after all, have not been allowed to trade for much of the year.
With COVID-19 case numbers falling, Mr Andrews has an opportunity to bring forward reopening of the state’s economy, safely. As Simon Benson revealed on Saturday, world-leading scientists linked to modelling used by Mr Andrews to lock down Melbourne say the research has been misrepresented. They have urged the Premier to re-run their model with more realistic data that could allow restrictions to be lifted earlier. Current suppression targets, the scientists argue, are more ambitious than those of major European, US and Asian cities — with the exception of Wuhan, which barred almost all movement and work.
As a starting point, Mr Andrews should also give Melbourne’s 9pm-5am curfew the boot. State Chief Health Officer Brett Sutton and Victoria Police Chief Commissioner Shane Patton made clear last week that the curfew was not based on either medical or police advice. And a coalition of major companies, led by BHP, Wesfarmers and biotech giant CSL (which is developing two potential vaccines), warn the curfew will cause irreparable damage to the community and the economy. The business leaders, employing more than 200,000 workers, also called for an urgent revision of the pandemic modelling and recovery road map. The suggestion by Professor Samuel that the Productivity Commission review the modelling and Victoria’s “road map’’ would be worth acting upon. Mr Andrews should release the full modelling, in the interests of transparency. As Health Minister Greg Hunt says, revisiting the modelling using achievable targets and improvements in contact tracing would serve as a circuit breaker that would help improve mental health and social and economic wellbeing. Mr Andrews has deemed any revision of the road map unlikely; he should think again.
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