Coronavirus: Elimination strategy ‘will cost us $319bn’

Trying to eliminate the coronavirus costs more than annual government spending on defence, education, health and social security combined, a think tank says.

People exercising in Melbourne on Monday. Picture: David Crosling

The cost of trying to eliminate the coronavirus from Australia is more than annual government spending on defence, education, health and social security combined, according to new economic modelling released by a free-market think tank.

From June this year to the middle of 2022, the “elimination strategy” being pursued by state and federal governments will cost $319bn, equivalent to 23 per cent of GDP, the report, Medical ­Capacity: An Alternative to Lockdowns, has estimated.

“Put another way, the cost is the equivalent to 2.2 times the total annual value of Australia’s entire healthcare and social assistance industry,” the report, written by research director Daniel Wild and Institute of Public Affairs associate Asher Judah, concluded.

The report comes amid debate about the proportionality of ­Victoria’s ongoing lockdown, which is set to last at least another three weeks, and ahead of the federal government’s budget, expected to reveal the biggest deficit since the 1940s.

“The consequences of the lockdowns could be likened to a form of aggressive asset stripping where the political class and elites appeared to have been empowered and grown wealthier at the expense of an ever more precarious middle-class,” Mr Wild said.

“Lockdowns have brought about one of the greatest regressive transfers of wealth and power in Australia’s history,” he added, pointing to evidence that the ­impact of the lockdowns had weighed more on younger ­Australians.

The research paper found that 26 jobs had been lost in the private sector for every new job added to the public sector since March, while more than 953,000 Australians aged 15 to 24 were ­either unemployed or under­employed.

The report calls for state and federal governments to return to a policy of “flattening the curve”, or ensuring the medical system can cope with coronavirus cases, rather than trying to eliminate the virus.

The report said there wasn’t evidence that long lockdowns worked. “They lack proportion by outlawing or severely limiting the undertaking of activities which pose an infinitesimally small risk to public health, such as surfing alone in the ocean,” it said.

“Governments must learn to live with COVID-19 and adopt an approach that minimises the ­social, cultural and economic costs of risk management.

“The best COVID-19 response was always about balance. Governments should put in place measures to protect the elderly and vulnerable, implement high quality contact tracing, continue with random community testing, and maintain international border control measures,” he added.

Only states with more than 500 new cases a day could justify “stage-three” type restrictions.

The report builds on analysis in New Zealand by economist Martin Lally that found government lockdowns there had saved years of life at 190 times the usual amount spent by government agencies to save lives.