Far be it for me to side with bluebloods on anything, so here’s the responding petition to the recent appeal by the cream of Australian economics not to rush opening up:
An Open Letter from Concerned Australians on Trade-offs During the COVID-19 Crisis
The views expressed are those of the signatories and not necessarily those of their employer.
Summary: Australia’s outstanding success cauterising the spread of COVID-19 has placed us in a position to seek to promptly reactivate the economy. If the current lockdown is allowed to continue as some academics propose, millions of Australians will suffer from dire economic and human costs, including prolonged unemployment, rising suicide rates, homelessness, domestic violence, drug and alcohol abuse, and abject poverty. A measured exit from the current containment strategy will spark a recovery in employment, incomes and growth, and minimise the financial and health costs from what could otherwise be a 1-in-100 year depression.
Dear Prime Minister and Members of the National Cabinet,
The undersigned Australians have witnessed and participated in the public debate about when to gradually relax the economic lockdown in Australia as the country crushes the coronavirus.
Some academic economists have expressed the view that there is “false distinction” in the trade-off between the public health and economic aspects of the crisis.
We, as concerned Australians, including economists, believe the aforementioned academics’ claim that there is no such trade-off is both theoretically and empirically wrong.
We further believe that the academics’ failure to acknowledge the inherent trade-off between the costs of shuttering most Australian businesses in exchange for the benefits of cauterising the coronavirus will do permanent economic damage by sacrificing millions of jobs and killing businesses that have every right to continue to survive an exogenous shock that is the financial equivalent of an asteroid strike.
The fact is Australia is in a position to optimise national health outcomes while minimising the irreparable economic destruction wrought by a policy of prolonged containment. That is to say, we can have a well-functioning economy operating simultaneously with an unrelenting, all-out effort to address and contain the public health COVID-19 crisis.
The pro-active policy measures Australia has put in place at our borders and within our states and territories have dramatically reduced the number of new infections to impressively low levels. We have successfully flattened our COVID-19 infection and fatality curves more effectively than the vast majority of developed countries.
It is imperative that Australia does not now squander our enviable position by throwing the economic baby out with the bathwater in the name of pursuing health goals in isolation from the profound and permanent financial costs of these policies.
It is now clear the policy of containment is also having adverse social, health and other human impacts on the approximately three million Australians who are tragically unemployed, underemployed or preparing their businesses for bankruptcy.
There is a present danger that the incredible work policymakers have done saving the lives of the minority of Australians at mortal risk from COVID-19 could potentially precipitate a 1-in-100 year depression that has much greater negative health consequences for society at large than the virus itself. These include high levels of prolonged unemployment, rising suicide rates, homelessness, domestic violence, drug and alcohol abuse, and abject poverty.
This represents a direct, second-order health trade-off beyond the first-order economic costs that could, ironically, be much greater than the health fears that prompted the policy of long-term containment in the first place.
These concerns were reinforced by the RBA’s governor, Dr Phil Lowe, during his assessment this week that Australia faces a “once in a century event of marked economic contraction”. Governor Lowe stressed that “the more people lose jobs and the more businesses are destroyed, the longer it takes to recover”. “The longer this goes on, the greater the economic damage to the economic infrastructure of this country will be,” Dr Lowe said.
We also worry about the significant increase in public debt required to fund one of the world’s most aggressive fiscal programs to back-stop growth for the proposed six-month period of business hibernation.
High debt levels limit the ability of future governments to deliver world-class health and education systems and other much-needed public amenities. They will also constrain policymakers from providing the fiscal stimulus required to combat more serious future crises while burdening subsequent generations with responsibility for servicing large tax liabilities that have been assumed to protect a minority of their predecessors.
Our borders will need to remain under strict controls for an extended period until rapid testing is available at air and sea ports. It is also vital Australians maintain social-distancing measures to minimise the coronavirus’s reproduction rate. And we endorse the government’s desire to continue to expand Australia’s world-class testing practices and enhance contact tracing capabilities, which are essential for avoiding future outbreaks while getting workers back into their jobs.
A measured scaling-back of the current lockdown policy would help avoid a depression by allowing businesses to reactivate over May, bringing staff back to work, offering goods and services the public can acquire, which will generate much-needed income across our communities. This will in turn reduce the risks of severe mental health issues damaging the lives of millions of unemployed Australians.
Academic research shows that those who have a job enjoy substantially superior health and quality of life than those who do not. We owe it to all Australians to act in their best collective interests by maximising their health outcomes while minimising unnecessary economic, social and human costs.
Sincerely,
Everald Compton, Adjunct, Professor, Faculty of Health and Social Sciences, University of Queensland
Adam Creighton, Economics Editor, The Australian
Will Hamilton, CEO, Hamilton Wealth Partners
Kieran Hennessy, CEO Seattle Group
Nick Hossack, Principal, Benchmark Analytics, former adviser to Prime Minister Howard
Christopher Joye, CEO, Coolabah Capital Investments
Stephen Koukoulas, CEO, Market Economics, former adviser to Prime Minister Gillard
Ian Macoun, CEO Pinnacle Investment Management, inaugural CEO of QIC
Harry Moffitt, CEO & Psychologist, Stotan Group
Terry McCrann, Business Columnist, Herald Sun & The Australian
Andrew Mohl, Former CEO, AMP and Non Executive Director, CBA
Campbell Newman AO, Chairman of Arcana Capital and Former Premier of Queensland
Anthony Roberts, Managing Director, Porter Davis
John Stone, former Treasury Secretary and Senator for Queensland
Ramesh Thakur, Emeritus Professor, Crawford School of Public Policy, The Australian National University
Misfits, carpet-baggers, interests and buffoons so far as I can see.
This entire thing looks like a self-promotional beat-up to me. Here’s what the original piece said:
The undersigned economists have witnessed and participated in the public debate about when to relax social-distancing measures in Australia. Some commentators have expressed the view that there is a trade-off between the public health and economic aspects of the crisis. We, as economists, believe this is a false distinction.
We cannot have a functioning economy unless we first comprehensively address the public health crisis. The measures put in place in Australia, at the border and within the states and territories, have reduced the number of new infections. This has put Australia in an enviable position compared to other countries, and we must not squander that success.
We recognise that the measures taken to date have come at a cost to economic activity and jobs, but believe these are far outweighed by the lives saved and the avoided economic damage due to an unmitigated contagion. We believe that strong fiscal measures are a much better way to offset these economic costs than prematurely loosening restrictions.
As has been foreshadowed in your public remarks, our borders will need to remain under tight control for an extended period. It is vital to keep social-distancing measures in place until the number of infections is very low, our testing capacity is expanded well beyond its already comparatively high level, and widespread contact tracing is available.
A second-wave outbreak would be extremely damaging to the economy, in addition to involving tragic and unnecessary loss of life.
Look at the two crucial paragraphs that I’ve bolded. The two groups entirely agree.
The motley crew would be much better off campaigning for better policy outcomes for youth (and everybody else) than what is currently being mooted in ScoMo’s awful deform agenda.
But I guess all publicity is good publicity.
