Current Issue #488

COVID-19 is one of two curves we must flatten

To truly beat the virus, Australia must apply the same discipline and commitment it has successfully used to flatten the curve to tackling unemployment.

Bombarded by the daily horrors of the coronavirus crisis, Australians have worked hard to flatten the curve. There is no room for complacency. The virus respects no boundaries. It is relentless and opportunistic, forcing us to take the most radical of measures to contain it. Nothing is as important to us as tackling it immediately, boldly and without regret. With no vaccine available our only real choice has been to contain it, suppress it and try to manage it. Scepticism, hesitancy and timidity are friends of the virus. This is a cruel disease, impacting the elderly, the poor and disadvantaged much more than the rest of us. We have witnessed great cities like New York devastated by the virus while so many, less well-known parts of the world endure their own nightmares. 

No nation is immune. In Australia, a herculean effort is underway. Radical restrictions on our movement are working in tandem with extensive testing. The curve is flattening, allaying our fears of an exponential rise in infections and the horrible consequences of this. The lethal power of the highly infectious coronavirus must never be underestimated. Past viral outbreaks have taught us how important bold and early intervention is to containing viral infections like this. The great fear we have had is that our health system will be overwhelmed by waves of critically ill people. Public health officials have understood this well, persistently and persuasively prosecuting the need for widespread physical distancing, testing and tracing. There has been no shutdown. Hundreds of thousands of health workers, public sector workers, manufacturers, service providers have worked hard to support those of us who have a job and are able to work from home. Millions have been stood down or lost their jobs as countless businesses are forced to close their doors. We have successfully mobilised to prevent exponential growth in infections. A similar commitment must now be mustered to tackle skyrocketing unemployment. 

No nation can be fully prepared to tackle a crisis like this one. It sorely tests all. Mistakes have been made, some have had terrible consequences. Inaction and recklessness have fortunately been rare here, but tragically on display in the Dis-United States. We should have done better – why wasn’t the JobKeeper scheme put in place prior to the introduction of restrictions that led to mass stand-downs and layoffs? We could have prevented hundreds of thousands of Australians having to risk queuing outside of Centrelink offices around Australia. 

This is a diabolically complex crisis. We might contain the virus here but face a world where other nations struggle to bring it under control. Restrictions on international travel are likely to remain in place for a long time to come, impacting migration, social, economic and cultural exchange. Nations and regions will emerge from the crisis in very different positions, all concerned about possible new waves of infection and weighed down by loss of life and the enormity of the social and economic impact of the virus. Nations that manage to contain the crisis need to assist those that are struggling. We really are all in this together and need to take concerted action to contain and suppress the virus globally. 

Tourism, retail and entertainment industries are just the most obvious industries affected by COVID-19 restrictions

Like much of the world, the Australian and South Australian economies have been hit hard by the virus. Global job losses are huge. We have never experienced such a sharp and rapid decline in economic activity and employment as we have over the past few months. Nationally, the Australian Bureau of Statistics estimated the loss of around 570,000 jobs in a month, in the order of 44,000 jobs in South Australia. Hundreds of millions of jobs may well be lost worldwide before this pandemic ends. 

Containing the virus is a prerequisite to social and economic recovery. We don’t know what a post-corona society is going to look like but it will be shaped by our experience of the pandemic. We don’t want a repeat of panic buying or chronic shortages of Personal Protective Equipment, ventilators and other medical equipment. Too many health workers have been put in harm’s way and forced to make decisions about life and death they never imagined they would have to make. While we have not experienced the worst of this in Australia we cannot assume that we will always be so fortunate. We have a responsibility now to play a key role in developing a global solution. At the same time we need to ensure that we manage risk at a national level. Among other things, that means government using its procurement powers to sustain a network of local companies capable of producing essential equipment for both domestic and global markets. We have to put in place measures that de- risk access to essential medical supplies but not in isolation from other nations. 

Having maintained low rates of infection, minds are turning to how we breathe life back into the economy and ensure decent incomes during the recovery period. There will be progress and setbacks but our ability to manage the crisis has matured. It is grounded in an acceptance that, above all, we must be certain that the health response is working. We must continue to be guided by health professionals. 

All recessions inflict hardship and suffering and they leave scars. This one is no different but it doesn’t have to be as protracted as the downturns of the past. While it is unrealistic to expect the economy to ‘snapback’, we can, at the appropriate time, accelerate recovery and jobs growth through a combination of stimulus spending on both social and physical infrastructure, sustained income protection and an enlightened post-coronavirus economic recovery and jobs strategy. 

We have another curve to flatten – it is the exponential rise in unemployment and all the hardship that entails for individuals and their families. After the recessions of the 1980s and 1990s it took years, not months, for unemployment to decline significantly. While we can’t rule out a financial crisis in the midst of the current crisis, this was not our starting point. We are also not prisoners of economic dogma, though some might say we are all Keynesians now. Governments of various political persuasions are acting as if they have read the work of the great economist, J.M. Keynes. Most haven’t, but their actions reflect a truth that is hard learnt – in the face of great economic crises, governments cannot resile from acting boldly. They would do well to do this at all times. 

John Spoehr

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John Spoehr is Director of the Australian Industrial Transformation Institute at Flinders University in South Australia.

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