The devastating true cost of Australia’s border closures is emerging

Only now as Queensland is reopening is the devastating true cost of Premiers’ border closures finally emerging.

Police stop and question drivers at a checkpoint at the Victoria-NSW border. Picture: Getty

What dire, confusing times these are for Australians. No sooner had NSW closed its border with Victoria than the nation’s third largest state, Queensland, reopened to NSW on the stroke of noon on Friday, underlining how COVID-19 has literally divided the nation.

For now, the simmering debate over border shutdowns has been subsumed by the scale of the public health emergency in Melbourne. More than five million people are locked down as new coronavirus cases climb by the day in Victoria and its hard-hit capital: 127 on Monday, then 191 on Tuesday, 134 on Wednesday, 165 on Thursday and 288 on Friday.

As modelling detailed in the news pages by Deborah Cromer of the University of NSW’s Kirby Institute shows, the number of additional daily infections is doubling every five days, on track to hit 500 on July 17 and 1000 on July 22 unless reimposed level-three restrictions check the outbreak.

There is every reason to be optimistic. The virus itself is unchanged. Coupled with inter­national travel bans, the crack­down on how people meet and mingle worked a treat when cases were surging in late March, putting Australia on a similar trajectory to the horror unfolding in Italy and Spain, at that time the beachheads for the virus in Europe. (It’s also worth remembering that back then the US had recorded fewer than 100,000 cases, mostly in New York City.)

But at what cost to an already reeling economy?

While the smaller states and the Northern Territory sealed their borders, the eastern seaboard behemoths, Victoria and NSW, together accounting for more than 60 per cent of the country’s economic output, kept theirs open and Queensland made arrangements to keep road transport flowing through the NSW crossings.

This nexus now has been broken with potentially devastating consequences for business and livelihoods.

Stroll the unseasonably quiet streets of the Gold Coast and you can see the impact in the closed shops and vacancy signs. Chamber of Commerce and Industry Queensland estimates that the hard border closure cost the state’s small business sector $16.7m a day after Premier Annastacia Palaszczuk lowered the boom on March 25. The Gold Coast’s signature tourism industry has absorbed an estimated hit of $1.2bn and counting.

The glitter strip should be jumping this weekend on the back of school holidays in Queensland, NSW and Victoria. As the queues of cars banked up on the Tweed-side of the border began unspooling at midday, local business operators heaved a sigh of relief despite the absence of locked-out Victorians.

Carly Snodgrass, founder of 'Under Current' clothing and GC Tourist Magazine boss, and local artist Ellie Hopley at Burleigh Heads. Picture: Luke Marsden.

“The border used to be an imaginary line but not so much any more,” says Bruce Robson, co-owner of the Iron & Resin Garage cafe at Currumbin Waters. The popular eatery is still limited to takeaway after temporarily closing in April, and Robson is hopeful trade will pick up now that the traffic is flowing again from nearby NSW. But as he points out, the crossing is not unimpeded: police will continue to screen for Victorians or Queenslanders returning from the sealed-off southern state. “What sort of open border has a police checkpoint and a 20-minute traffic jam?” he asks.

“In the scheme of things, it’s a minor inconvenience and if you want to protect people you need to do it, but the words ‘the border is open’ are not fair.”

Yet for other local businesses it was a case of too little, too late.

“We know a lot of businesses have already taken the decision to close — they won’t be reopening and that is going to have an impact on our commercial tenancies, it’s going to have an impact on our commercial landlords,” says federal MP Karen Andrews, whose seat of McPherson hugs the border.

“You can see when you go out there is not as much traffic, whether that’s vehicular traffic or foot traffic. You walk around the shopping centres and there are less people there.”

As Industry, Science and Technology Minister, Andrews knows both sides of the border argument.

From day one, the federal government opposed the closures, reflecting both the separation of constitutional powers in Australia and realpolitik.

The states’ responsibility for service delivery gives them carriage of the health response, yet the buck stops in Canberra on the economy.

The imperative to create a wartime-like national cabinet of Scott Morrison and the premiers was to strike the tricky balance of containing COVID-19 without killing the economy.

Backing Victoria’s move to “self-isolate” on Wednesday, the Prime Minister said: “That creates a protection for all the other states and territories at the one time and it doesn’t leave it to the arbitrary decision of one premier or another premier. “I mean, my view about people moving from NSW to Queensland or to South Australia or Western Australia has not changed. When you have a situation of an outbreak, you contain the outbreak, and that outbreak is presently in Melbourne.

“Arbitrary decisions about state borders is a separate issue and we’ll continue to maintain our position that Australia is one country, and that response that is needed in relation to outbreaks, well, that will be put in place.”

Andrews is adamant that the Queensland border should have reopened well before now. Her science portfolio takes in the CSIRO, overseeing the effort to develop COVID-19 treatments and, of course, a vaccine; her industry responsibilities go to how potential drugs would be manufactured in Australia if and when the research comes to fruition. She is all too aware of the toll on business nationally and on the Gold Coast.

“Many people have said to me that they needed to open prior to the school holidays,” she says. “Now, that’s not a uniform view, but for those people who have been impacted and rely on tourist trade over the school holidays and they are very strong in their views that it should be open.

Police at vehicle checkpoints on the Gold Coast Highway as the Queensland borders opened. Picture: Steve Holland

“There are also parts of the community, particularly our older people, that are scared and … we are very conscious of containing the spread of COVID.

“But it also involves risk management: how do we reawaken, restart the economy while managing the risk of people movement? That’s where I think we should have been focused here in Queensland.”

The lessons for business survival on the Gold Coast will be salient for Victorian firms grappling with the altered landscape. As central as tourism is, the Gold Coast is much more than a beach and holiday destination.

What’s sometimes forgotten is that it is Australia’s sixth biggest city, with an economy that looks a lot like what the national system should be: heavy on job-generating ser­vices through tourism and hospitality, with vibrant small business and burgeoning light manufacturing generating an estimated $7bn a year.

Rebecca Cordoma, 28, owns one of the 90,000 small businesses registered on the Gold Coast. To put that in perspective, Brisbane, 80km up the M1, boasts four times the population but only 180,000 such enterprises. Cordoma’s swimwear line, Second Swim, was powering until the coronavirus struck. Virtually overnight, she lost key customers in the US and Italy. Her manufacturer in nearby Currumbin went into hibernation, partly because many of its machinists lived on the NSW side of the border and couldn’t get to work.

Like ripples in a pond, the disruption churned through the supply chain. The contractor who did her promotional photo shoots, Masao Tamaoki, had to close his studio for lack of bookings.

Cordoma’s costs went through the roof. A $98 swimsuit delivered to an online customer in California chewed up $93 in shipping after her courier service cranked up charges.

“We have just been sitting still for the last couple of months,” Cordoma says.

Spare a thought for leisurewear designer Ellie Hopley. “Be patient, be kind,” she enjoins on her email sign-off, having been inundated with abusive messages from frustrated customers.

Her Shuturp line is in demand worldwide, but keeping up with orders from the US and Canada has been problematic after the North American nations tightened Customs requirements.

“I had to stop as the delays were too long,” she says ruefully. “People are getting angry, and being able to ship to the US has been the hardest. I’ve still got people asking where their orders are from four months ago — it’s been a negative all round.”

Clothes designer Ashy Bines had just released a new activewear label when the border closed. She says the business had to adjust — and fast — pivoting to an alternative lounge collection to cater for stay-at-home customers.

Her advice: “Not to panic and to be open to new ideas, new ways of doing things. Don’t hold back. Try and fail, but keep adapting. Sometimes the best business ideas and strategies can come from difficult situations — find those opportunities. Having a long-term view is also important.”

At the Iron & Resin Garage, which housed a thriving sideline business in motorcycle accessories, Robson is worried that its US distributors are running short of stock. It has missed out on a stock of new winter riding gear.

“We’ve always been pretty cautious — we don’t have overheads or are leveraged with a massive bank loan,” Robson says.

“That has helped us get through this and having JobKeeper to help our staff when we were in lockdown was a huge weight off our shoulders.”

Carly Snodgrass has been cooling her heels at home trying to figure out what to do with her three ventures — T-shirt business Undercurrent, a suspended ticketing operation and a quarterly tourism magazine that couldn’t be distributed in March because many of her advertisers had closed down.

She is waiting for the crisis to break in Victoria before deciding on her next move.

“I think restaurants will come back first,” Snodgrass says. “I can see opportunity there but I haven’t pushed yet as we want to see what happens in Melbourne, something which no one expected.”

Tamaoki, 40, says a strong digital presence was the salvation of his media business. When the studio operation faltered, he ramped up the online photograph shop and web design practice.

“With people shifting more online, I’ve been quite busy, actually,” he says. “I think the lesson for me is that you have to have an online presence. If you are a business relying totally on local traffic, it’s not enough.”

Andrews says business at large should take careful note.

The scope of the emergency in Victoria reinforces the threat to lives and livelihood that COVID-19 poses. Who can say how many more eruptions will take place in Australia?

The northern hemisphere is in the countdown to winter, and that will bring fresh challenges in countries that have ridden out the first wave of infections as well as those that continue to struggle, especially the US.

The one certainty, she says, is that it won’t be business as usual on the other side.

“Industries are going to have to look at a new way of operating because fundamentally our lives and the way we work have changed over the last six months, and it will not return to how it was at the end of last year,” Andrews predicts.

People will need to think like entrepreneurs, not employees. “It will be starting their own business opportunities, whether they do that as a contractor or whether they actually start their own business … developing a product, selling a product or service,” she says.

“And it might be that people have to look at a range of opportunities rather than just one full-time job. And that’s not necessarily a bad thing because that actually creates a range of development opportunities for people to use a range of skills.”

Andrews agrees she’s talking about a revved-up gig economy, hardly a comforting prospect. But she argues this is something to be embraced, not resisted.

“I really want to stress it is not a negative. There will still be opportunities for people to have full-time ongoing employment, part-time ongoing employment, and there will be casual work as well,” she says. “But people will increasingly look for their own opportunities and the trends are already there.”

Additional reporting: Mackenzie Scott