Australia enters the great unknown

http://www.afr.com/politics/federal/australia-enters-the-great-unknown-20200318-p54bg2

The Prime Minister’s earnest appeals for Australians to demonstrate common sense and the best of our national spirit in helping one another will also resonate with most people.

Scott Morrison and Brendan Murphy address the media on new measures. Alex Ellinghausen

But already millions are suddenly realising their jobs and their incomes are no longer secure and in fact are far more likely to abruptly stop or fall away very soon. They only have to look at the near empty cafes and ghostly streets of Sydney and Melbourne, the big businesses whose employees are now working from home, the other smaller businesses already having to lay people off as their revenue and work orders evaporate.

Only a few businesses such as supermarkets that are facing consumer buying surges are now hiring. Westpac’s estimate of a 7 per cent unemployment rate by October looks, if anything, optimistic. Just paying the rent over the next few months is fast becoming an impossible challenge for many individuals and businesses.

Victorian Premier Daniel Andrews is right to say the time for normal stimulus measures is now replaced by “survival payments, a survival package” in order to keep more businesses afloat with emergency cash.

“We have many businesses who have zero income. Offering them a tax cut doesn’t necessarily do it,” he says. No indeed.

But it’s not really possible to find what can “do it” in an economic crisis that is still really only at the very start of the coming public health crisis. Governments in Europe and the US are also now saying they will do “whatever it takes” to defeat an enemy that is now inside rather than at the door. That means the level of money set to be injected by desperate Western governments would have been beyond fiscal or political comprehension even a few weeks ago.

Australia will obviously follow suit on Thursday with the announcement of more “safety net” measures now that the government’s fiscal stimulus package of last week seems almost irrelevant in helping an economy in the process of dramatically slowing if not shutting down.

The ASX closed down by another 6.4 per cent on Wednesday, with the occasional spikes up not obscuring the dramatic overall fall over the past few weeks.

It’s still the line showing the upward and accelerating trend in the rate of infections in Australia that remains the real drama.

Chief Medical Officer Brendan Murphy insists that any public health measures must be sustainable for the long term.

This backs the Prime Minister’s view that any closure of schools would be too disruptive because it would have to be in place for at least six months and cost tens of thousands of jobs, if not more, including forcing many parents, often working in essential services, to stay home. That logic has not deterred more than 30 American states so far closing their schools as well as much of Europe.

Yet Morrisons’s citing of Singapore as an example of a successful country that was keeping its schools open did not mention the corollary. Singapore, from the beginning, has controlled the virus far more successfully with aggressive testing, tracking and isolation of any cases and potential contacts. That means its COVID-19 caseload has hardly gone up since January – in sharp contrast to Australia – and there’s absolutely no problem buying items like hand sanitiser.

Not that the federal government is alone in belated recognition of measures that should have been required to most effectively limit or delay the spread of this virus while it was more controllable in terms of numbers.

So the Prime Minister declared state governments are “already putting in place proper hygiene processes in terms of cleaning of public transport”. It would have been more useful had the NSW government, for example, put such extra cleaning processes in place weeks ago, particularly when it knew the state was already dealing with particular hot spots for the virus in areas of northern Sydney.

“Life is changing in Australia, as it is changing all around the world,” Morrison said. “Life is going to continue to change as we deal with the global coronavirus.”

More than we know.

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