Switching Tracks
Central Station, Sydney, usually one of the nation’s busiest, is eerily deserted.
we must find better ways to protect those most at risk from COVID-19 without transferring risk to the economy. By Nick Cater.
There is plenty of evidence to suggest Australia is in a better place than it was this time last month.
There is also much evidence to back the conclusion that we are not. Stopping a pandemic without killing the economy is that kind of problem.
The public policy challenge, we should remind ourselves, is not to bestow immortality on the entire population or even to prevent all suffering. Those things are above our pay grade and must be left in the hands of the Almighty and the doctors.
Our task is to control the risk of an excessive rise in demand for scarce health resources that would overwhelm the medical system, as it has in Italy and Spain, for example.
On that measure, there is little question that we are in a far better position than we were at the start of the crisis. The sealing of borders and the introduction of distancing and isolation procedures has tamed the rise in new infections giving us confidence that the demand for acute hospital beds will not spike in the short term.
The government has also made rapid progress on the supply side, commissioning more acute treatment beds and equipment and striking a deal with private hospitals.
There is an important caveat to this. We need to learn to live with this virus until a medical solution is found, which may be as long as two years away. The risk of a second wave cautions against complacency.
COVID-19: Read the MRC’s coverage of the debate in Australia and around the world
Evidence of our worsening position is plain to see on the empty streets of our cities which a month ago were teeming with consumers and suppliers making thousands of commercial transactions every minute.
At the end of the day people would ride home crammed into crowded buses and trains in a manner that causes us to shudder now. But at least they had money in their pockets.
A Roy Morgan survey this week found that 1.4 million Australians lost their jobs in March. Unemployment for March as a whole was 12.2 per cent but that number obscures the changes to the economy that took place in mid-March.
Even allowing for Roy Morgan’s methodology, which consistently puts the unemployment estimate several points ahead of that produced by the Bureau of Statistics, this is a scary figure.
The longer the current measures stay in place, the worse it will get. Early economic modelling suggests that economic output this year will fall not by a little but a lot.
If we were able to see the future clearly enough to predict the knock-on effects from sector to sector, the high probability of one or more large corporate collapses, broken supply chains, or the impact of dramatic fiscal expansion on the productive economy, the numbers would likely look even worse than the modelling is so far showing.
The non-economic cost of the current measures is even harder to state in numbers but is no less important. The experience of full isolation for an indefinite period, the loss of employment, the universal loss of amenity and disruption in almost everyone’s life has put a strain on kinship and social networks.
This is not an either-or question. The public health challenge is inseparable from the economic challenge.
But the fact that we have reduced the public health risk while increasing the economic and social risks demands that we think again.
The answer is not more of the same. The public policy focus is shifting from containing the public health risk to containing the risks to our economy and future prosperity.
It must do so without neglecting the risks of a second wave of COVID-19, a guest we didn’t not invite into our country but one we are going to have to live with into 2021 and possibly beyond.
We must find a better way of keeping the virus in check that allows businesses to increase activity and social distancing to be adjusted.
In our view, that can be achieved by using public health measures that are targeted at those most at risk of serious illness or death while allowing the rest of the country to go about its business with caution.
This will be enhanced by improved track and trace procedures, more testing, and exploiting the possibilities of new treatments which are showing positive results overseas.
Restrictions on our international borders should remain. It is our firm view, however, that the restrictions that must remain in place, and in some cases be increased, do not require heavy enforcement.
The evidence is before our eyes that most Australians are taking sensible precautions and will continue to do so as long as the risk remains.
What’s required now is allowing for common sense and flexibility.
Defining the at-risk group, those who must be given special protection against coming into contact with the virus, is easily done in broad terms.
In our view, however, the best public health advice to give is: “If in doubt, contact your doctor.”
The targeted strategy is far from perfect, but there is no perfect way of dealing with the virus. The challenge is to balance the risks and make the least imperfect decisions.
The alternatives are worse, in our view. A New Zealand-style lockdown will not eradicate the virus, but it will almost certainly make the economic pain worse.
Herd immunity is an attractive thought, but it requires about 60 per cent of the population to have been infected. We would appear to be considerably short of that, even allowing for the high number of asymptomatic carriers the virus is understood to infect.
Even France, a country where a much high number of infected cases have been reported than in Australia, authorities put the proportion of the population infected at 3 per cent.
The horizon to achieve collective immunity is too distant to offer immediate comfort. It would require an acceleration in the infection rate that could quickly reverse the gains made so far and substantially increase the risk of health facilities becoming choked.
Others have proposed a “stop-and-go” strategy, alternating periods of social distancing with periods of return to normal life.
British epidemiologist Neil Ferguson has suggested using the number of admissions to intensive care as an indicator. Once a given threshold has been crossed, social distancing measures would tightened and reduced when the rate of admission slows.
Yet researchers acknowledge the difficulty of controlling the disease in this way, given the lag between infection and the onset of acute symptoms. The challenge is not dissimilar to that of preventing milk boiling over on a stove.
Further, it would increase uncertainty in the business community that would erode business and consumer confidence.
In a situation like this, it pays to revisit first principles. Robert Menzies defined the key role of government as creating an atmosphere in which businesses thrive and prosperity grows.
Amidst the wicked complexity of the problem we are wrestling, that thought should remain illuminated in our minds.