States must focus on economies

Conscious as they are of shoring up their political legacies for “saving” their people from COVID-19, state and territory leaders, at this stage of the pandemic, should take a longer view. They need the courage and vision to put the economic future of their constituents first, especially the young, and look to the next generation. So far, only NSW Premier Gladys Berejiklian and her Treasurer, Dominic Perrottet, are putting their state’s economic recovery ahead of the temptation to overreact to ongoing outbreaks of the virus. A NSW cabinet subcommittee agreed on Sunday night that the economy is now the priority. There is recognition among senior Berejiklian government ministers that the newly fortified hospital system will need to be tested. Some members of the public inevitably will become ill. Some, sadly, will die. That recognition is not hard-hearted. Those who are most vulnerable, the elderly and sick, need to be well protected. Coronavirus is insidious and highly contagious. But Australia’s hospitals are well prepared and well equipped to cope with it.

A sensible unity has emerged within the NSW government that a Daniel Andrews-style lockdown needs to be avoided, as Yoni Bashan reports. Many business leaders, owners and workers concur. NSW needs to avoid going backwards. So do all states and territories. Allowing their economies to collapse like deck chairs would bring prolonged hardship and poverty. Those who believe the Andrews government’s flawed strategy needs to be recalibrated so only the most at-risk tower blocks or postcodes are targeted with precision quarantining are on the right track.

The nerve and resolve of the Berejiklian government will be tested if the Crossroads Hotel cluster in Sydney’s southwest spreads and fresh hotspots emerge. Fresh outbreaks are inevitable, the Australian Health Protection Principal Committee has warned. Now that the initial phase of coronavirus has passed, these must be met with laser-like responses. The focus, as experience in Victoria shows, should be on faster and better testing and tracing, and effective quarantine. The link between two COVID-19 cases in people who attended Melbourne’s Black Lives Matter protest on June 6 and at least 242 cases in public housing towers in the city’s inner northwest, reported by Rachel Baxendale, underlines why tracing and testing are vital. In some situations face masks also help, medical experts advise. Around the nation, creeping complacency about hand washing, personal distancing and other precautions must be reversed.

Victorian Premier Andrews, whose state is already facing economic mayhem with its six-week shutdown of greater Melbourne and the Mitchell Shire, sent the wrong message on Monday when he refused to rule out stage four restrictions. Forcing another crippling burden on business and households in our second-largest state would have dire consequences in terms of poverty and social unrest. And Queensland Premier Annastacia Palaszczuk, less than a week after opening up her state to all but Victorians, is already putting up the shutters, banning visitors from a vast swath of Sydney’s west — the local government areas of Liverpool or Campbelltown — or anyone who has been there recently. Premiers need to recognise that no state — even Tasmania — is an economic island. Artificial barriers weaken the whole.

As the risks of an unmitigated pandemic in Australia have lessened, the costs of economic shutdown will increasingly outweigh the benefits of illnesses and deaths avoided. That is the key message in the analysis by Henry Ergas and Joe Branigan for the Menzies Research Centre. As the economists note, preventing an uncontrolled outbreak of COVID-19 will potentially cost $100bn this year, or 5 per cent of gross domestic product. Employment decreased by 600,000 in April and 228,000 in May as businesses shut. The true unemployment rate is about 13.1 per cent. Every national cabinet decision, the report argues, must now be “an incremental weighing up of the costs and benefits” of removing or reinstating restrictions. The folly of a stop-start approach to recovery is clear. Businesses need certainty if they are to plan, invest and create jobs and wealth. Providing that certainty must be the priority of state and territory leaders.