This must end.
As Premier Dan Andrews starts to slowly wake up to the reality that a COVID zero-transmission target is unachievable, the state continues to suffer under a gruelling extended lockdown that is killing our economy, to the tune of hundreds of millions of dollars every week.
The too-slow realisation – that completely eliminating the virus from Victoria is an impossible task – is edging Premier Plod closer to a more common-sense approach that includes easing restrictions while ramping up vaccination rates.
Under the eased restrictions being considered will be the ‘new normal’ condition that the fully vaccinated (and I count myself as one) will have the freedom to gather, attend major events (Australian Open, The Grand Prix, Spring Racing Carnival anyone?) and go to the footy and other local sport. While the unvaccinated will find themselves in a continued state of isolation, barred from entering pubs and venues where transmission risks remain.
Getting our major events back is a vital recovery phase given the tourism and the hospitality industry impacts of both money being spent and jobs being created.
The only ones seemingly creating a pathway out of this is the Victorian Chamber of Commerce and here’s their current plan.
As Chief Executive Paul Guerra said “Victorians are good at coming out of lockdowns – we’ve done it five times now – but the sixth time must be the last. This plan is necessary not just for coming out of lockdown but also for staying open. It’s no longer just a business crisis – the response to COVID has developed a mental health crisis, education crisis, worker crisis, and community crisis. We must get out of this.”
Impact felt by businesses
This is welcome news, but the cost has been high and has largely borne by Victoria’s small businesses who have been set back years by these onerous, extended, and repeated lockdowns.
As I wrote last month, I have many clients who run hospitality venues who are facing a years-long process of recovering their financial position. Premier Plod must consider the damage his overly ambitious lockdowns have cost the business community, the economy and Victorians generally. Will he deliver fiscal support? Unlikely.
So, now, the race is on to reach 70 per cent fully vaccinated so that we might enter a new kind of COVID normal where life can resume. We’ll ultimately be left with a new two-tiered state of vaccinated versus unvaccinated but over time, herd immunity will be achieved and we’ll live with this virus the way we live with the flu, taking booster shots every year and maintaining good hygiene standards.
As discussed in my previous post (It’s time to vaccinate for the sake of our Australian economy) we all share a responsibility for getting the economy back to as normal a state as possible. The vaccines present minimal risks (much lower than getting hit on the head by a coconut, or being hit by a car) and it’s up to all of us to step up and protect ourselves and each other by getting vaccinated.
Key to recovery
The key to any economic recovery is the housing sector and the construction sector. These two sectors underpin both the state and national economies and for us to be able to frame any sort of economic improvement these two sectors must be firing. It’s as simple as that.
We know that construction is where the jobs are created. But at Box Hill 20 workers on a development site on Whitehorse Road have tested positive and construction has been shut down, forcing 85 workers into isolation. This construction shutdown will be costing the developer significant dollars, not to mention the potential lost wages for the workers if they’re casual. This is not a sustainable way to live. Our economy cannot continually withstand this juddering motion.
It’s easy to look at the booming house prices and think that COVID is not having any negative impact on the housing market, but that’s not true and it’s questionable how long these prices will withstand the lockdowns.
The property market needs to open so that inspections and auctions can resume as soon as possible. Stamp duty is one of the most lucrative taxes to fatten the state’s coffers and the more housing turnover slows, the more hurt is inflicted on state revenues. In fact, stamp duty income is the third largest revenue line item in the budget, behind Commonwealth GST receipts and payroll tax.
The lockdown is turning the tap off for the massive number of auctions that take place in Melbourne every week. With a clearance rate of more than 85 per cent, auctions are a key plank in the Melbourne housing market, where the median house price has just passed $1 million.
And at the end of the day, someone or something has to pay for these massive budget deficits and spending that the Labour government is burdening us all with.
Time to open
The UK is leading by example of how living with COVID could look. On July 19 the nation put an end to all COVID restrictions, including social distancing and mask wearing indoors, having achieved 71 per cent of fully vaccinated population. In the weeks following the end of restrictions infection rates and death rates seemed to fall, according to early data.
Right now in the UK whilst Covid cases are 20 times higher than the same time last year, the number of deaths and hospitalisations is a fifth of last year. So it seems that Britons are carrying on with life, now accepting that Covid is no longer the major cause of death (it is actually no. 9 on the list in the UK behind dementia and Alzheimer’s) even though the virus is expected to claim as many as 100 lives a day. In normal times, 40,000 Britons die each month from all causes and it seems they are accepting of this fact.
So there you go, it appears that there IS a way to live with COVID and return to economic growth conditions. Small business owners who are in the hospitality, retail and entertainment industries could look forward to focusing on all the normal challenges that face business owners, without the draconian impost of ineffective COVID lockdowns.
Come on, Premier Andrews, let’s get back to business so we can all get on with our lives. Open Victoria for business again.
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.
- A dose of reality for the Victorian Premier - September 13, 2021
- What do Sydney’s rising house prices mean for homeowners, investors, and first-home buyers? - September 1, 2021
- Melbourne: Looking at all sides of surging property prices - August 27, 2021