‘The opposite of planning’: how Australia put the economy before health of the nation

When governments ditched Covid health advice, people might have assumed there were carefully honed policies to handle the surge in cases. That is not what is being revealed

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Last modified on Wed 19 Jan 2022 14.30 EST

It’s hard to know the moment Australia’s response to Covid turned from purposeful to a parody, but it was probably when economics trumped health advice.

First there was the mid-December declaration by Dominic Perrottet to leave mask use to “personal responsibility” and discourage curbs on the movement of the unvaccinated just as the Omicron variant took off.

Then there was Wednesday’s sirenic call by prime minister Scott Morrison to the 150,000 international students with visas.

Not because we want them to be here studying courses they pay over the odds for. Rather, it would be “incredibly helpful” if they filled “critical workforce shortages”, not least in “healthcare, aged care, those types of sectors”, the PM said. BYO RATs?

Now the NSW government is considering waiving “responsible service of alcohol” certificates as a priority because what we lack most right now is sufficient booze flowing in our pubs.

Any humour, though, would probably be viewed darkly by Sydney paramedics who recently picked up a 93-year-old woman with a broken hip who had been waiting 13 hours for an ambulance. Or the surgeons at the city’s Liverpool hospital who cancelled cancer operations this week because there wasn’t a spare ICU bed if patients suddenly required one.

With economics in the ascendancy, policymakers are relying on the health sector bending but not breaking. Draconian threats of retribution against those who speak out may help to cauterise the public debate, leaving empty supermarket shelves or deported tennis stars to dominate headlines rather than the images or appeals of patients or carers in distress.

Our political leaders may also take heart from early signs that the hit to consumer and business sentiment from what independent economist Saul Eslake calls Australia’s “voluntary lockdown” will be short lived.

True, confidence in January may be the lowest in 15 months – and at a nadir not seen in this typically cheery month since 1992 – according a ANZ-Roy Morgan survey. But another reading of sentiment by the Westpac-Melbourne Institute, released on Wednesday, points to only a modest retreat so far, although anxiety gathered pace during the period covered by the survey last week.

Eslake says there’s few hard numbers since Omicron really took off. Still, Google and Apple mobility data signal people are sharply reducing their movements, presumably as they try to avoid being infected or because they or close contacts have been, and they are restricted from venturing to work or to shop. That’s bad news for the hospitality and tourism trade.

“The economic impact to the extent that it’s going to get measured is probably bigger on the supply side than on demand side,” he says. “The economic consequences of people not being able to go to work are probably greater than the impact of people being afraid of going out and spending.”

Households have become adept at finding ways to work and spend from home, which should provide some economic ballast. So, too, will their hoard of some $220bn in savings accumulated during the past two years.

Those supply impacts are not to be sniffed at. According to the US Federal Reserve, that nation’s central bank, Omicron varies from previous Covid waves in its rattling of supply chains, stoking inflationary rather than deflationary pressures. Similar effects are playing out in Australia, Eslake says.

Moves to fill our staff shortages by cutting Covid-positive isolation times from 14 days to seven and soon – if comments from the Morrison government are any guide – to five will increase the risk of further spreading the virus.

“I don’t have the [epidemiological] expertise to know whether that’s the optimal trade off or not, but it obviously is a trade off,” he said.

Richard Denniss, chief economist at The Australia Institute, is more blunt.

“Letting people that are at high risk of having or spreading the infection return to work quickly helps the labour supply this week, and harms the labour supply in the coming weeks when it spreads,” Denniss said. “So this is the definition of short-termism.”

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It’s also reverse of the health advice that governed Australia’s pandemic response for the first 18 months.

“We are so desperate at the moment, that we are willing to trade off an extra nurse today or an extra truck driver today at the cost of three or more absent in a week or two’s time,” he says. “So, we now have a Covid-induced labour supply problem.”

The Doherty Institute modelling presented to national cabinet in late 2021 warned of 200,000 cases a day in a worst-case scenario, according to reports last month.

The modelling assumed only baseline public health safety measures and partial contract tracing, the Sydney Morning Herald reported at the time. The institute is now mulling whether to formally release their assessment.Doctors warn privately the return to school of children from the end of next week – although Queensland has delayed the restart for two weeks – will contribute to another wave of patients. Not many will be children – although most remain unvaccinated – but rather infected parents, grandparents or teachers.

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“Even if there’s enough teachers for school to start in the first week, on current trajectory, three weeks after it starts, they’ll be very significant absentees and, you know, everyone presumably is going to be surprised when that happens,” Denniss says.

When governments ditched health advice, the public might have assumed they had readied carefully honed policies to accommodate the surge in hospital cases, or had fallback measures to flatten that famous infections curve if need.

Instead, what’s being revealed “is the opposite of planning”, Denniss bemoans. “Hope is not a strategy.”

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