Victorian spike hits economy

In managing COVID-19, good health policy that keeps the virus suppressed is also good economic policy. That correlation is writ large in “Fast crisis, slow recovery”, the Deloitte Access Economics Business Outlook analysis released on Monday. Coronavirus has taken a sledgehammer to the nation’s economy. But, while no state or territory has been left unscathed, some have been hit harder than others. After a bleak weekend in Victoria, where 108 new cases were recorded on Saturday and 74 on Sunday, the need for tighter restrictions, Deloitte Access Economics partner Chris Richardson noted in the report, “has sent job losses soaring and consumers hanging on to their cash rather than spending it’’. Victoria is set to take the unwanted title of Australia’s worst economic state through the COVID crisis, as Geoff Chambers reports on Monday. Population, once a key growth engine in the nation’s second-largest economy, has stalled. Victoria is also heavily dependent on overseas students, whose return will be delayed by the latest outbreaks.

After a spike of 312 cases over the past week in Melbourne, Premier Daniel Andrews’s move to lock down nine public housing towers in the inner suburbs of Flemington and North Melbourne, where 27 people have tested positive to the virus, smacks of desperation. The 3000 residents, confined to their small units for five days, overseen by 500 police, in buildings with high population densities, are angry and confused about the dystopian experiment, especially when 43 per cent of those diagnosed with COVID-19 across Melbourne are in local government areas with no postcodes locked down — yet. Nor has the process been smooth. On Sunday afternoon, 18 hours after it began, residents such as a father of five young children complained the family had not been doorknocked and were worried about what they were going to eat. Food and care packages are being distributed, but some residents feel as though they are in jail. That said, experience overseas shows the virus spreads rapidly in high-density, low socio-economic housing with poor facilities, where residents are less likely to have access to the best medical care. Federal authorities are supporting Victoria’s action, with acting Chief Medical Officer Paul Kelly likening the towers to “vertical cruise ships”.

Apart from Wuhan early on, few other places in the world have forced such a drastic denial of liberties. Time will determine its effectiveness. It is a gamble. Apart from the impact on the mental health of those confined with no access to fresh air and sunshine, lockdowns can make a bad situation worse. Scientists believe the enforced cabin quarantine on the Diamond Princess off Japan in February was such a case. Despite the lockdown, 712 of 3711 passengers (19 per cent) got the virus.

The impact of COVID-19 and the measures taken to limit what authorities call its “explosive’’ potential to spread through the public housing towers underline the fact that bad mistakes in managing the virus must be avoided. Victorians are paying dearly for the Andrews government’s failures. These include: not ensuring proper supervision of quarantine hotels; lack of serious effort to stop Black Lives Matter marches, which sent a dangerous signal to the rest of the community; and its failure to communicate the need for social distancing and testing to all ethnic and religious minorities.