The more I think about it, the more I see positive long-term benefits from the COVID-19 pandemic.
Sure, the huge rise in unemployment, lockdowns, inevitable business failures, and the rise in government debt are bitter pills to swallow. But there are silver linings that should leave Australian in a stronger and more sustainable position once the crisis is over.
Let’s accentuate the positives.
First, COVID-19 has put an end to Australia’s unsustainable and increasingly unpopular mass immigration program for the foreseeable future. In doing so, it gives Australia the unique opportunity to catch-up on infrastructure investment, which has fallen badly into deficit following 15 years of extreme immigration-driven population growth:
Second, COVID-19 has forced Australia to confront its unhealthy reliance on China and the CCP’s corrupting influence on our institutions and economy. It is forcing Australia (and the world) to decouple from China, which will ultimately lead to a more diversified and stable global political economy.
Third, and related, COVID-19 has exposed our universities’ unhealthy and corrupting addiction to international students, as well as the CCP’s corrupting influence.
Fourth, COVID-19 ended Australia’s long “recession free” run, getting the monkey off policymakers’ backs. The desire to keep Australia from experiencing a technical recession augmented self-defeating policies like mass immigration, in order to keep the aggregate economy growing artificially. In the process, they have eroded per capita outcomes.
Now that Australia’s recession-free run has ended, policymakers will be under less pressure to keep the GDP streak alive via policies that boost growth, but erode individual living standards. Although, we have seen dud policies like the axing of responsible lending laws in a futile bid to protect house prices and juice growth.
Fifth, COVID-19 has forced the Morrison Government to abandon its futile budget surplus obsession and helped to bust federal/state barriers.
The Morrison Government has been forced to spend big to support household incomes and growth. And with a bit of luck, we will finally see a permanent increase in JobSeeker. There may also be lasting improvements in federal/state cooperation via National Cabinet. Such advancements were unlikely pre-COVID.
Sixth, COVID-19 will likely result in permanent changes to the way we work, with companies and employees now set up to work from home (WFH).
Even if CBD office workers only WFH one day per week on average going forward, this offers large cost savings, congestion and productivity benefits. It also mitigates the need to invest in expensive new infrastructure to boost capacity on roads and public transit.
Finally, the shift to WFH has forced the NBN Co to invest $4.5 billion to upgrade older parts of the National Broadband Network (NBN) to fibre.
While COVID-19 has undoubtedly been a bad experience, and 2020 will go down in history as a shocker, we cannot downplay the long-term benefits that should arise from COVID-19.
