Australia is about to shut down for six months

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We’ve already botched it by being too slow and weak at the border. It’s only just ticked into autumn but the virus is loose and killing, via Domain:

A 95-year-old resident of a Sydney aged care facility at the centre of a coronavirus scare who died this week has tested positive for the disease, NSW Health said.

The elderly woman is the first person in NSW to die with COVID-19 and the second in Australia, after a 78-year-old West Australian man died from the virus on Sunday.

NSW Health confirmed six more coronavirus cases on Wednesday night, bringing the total number of positive infections in the state to 22. As of Wednesday midnight, there are a total of 52 cases nationally.

The new cases include an elderly female resident at a Macquarie Park nursing facility, a female doctor who works at Liverpool Hospital, a female patient from the Northern Beaches, a male from Cronulla and a female who is believed to have returned from the Philippines.

Some of these are local transmissions. Still, the virus is containable before winter:

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The typical flu season runs from June to September, though can come earlier:

Referring back to our Spanish Flu analogue, Australia could let the virus rip and perhaps be through it in three months:

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1918 Spanish Flu epidemic death rates per city

But that’s not going to happen. It’s not a viable public policy option nor will private decisions volunteer it, despite the encouragement of a suicidal Ross Gittins. To wit, at The Australian:

A furious row has erupted over emergency coronavirus funding between the NSW and federal health ministers after an outbreak at a Sydney aged-care facility caused an exodus of staff who refused­ to turn up for work.

The Australian has learned that aged-care workers collect­ively called in sick to BaptistCare’s Dorothy Henderson Lodge at Macquarie Park, in Sydney’s northwest, on Wednesday after the death of a 95-year-old resident and the infection of three people, including an aged-care worker, an 82-year-old male resident and a female resident in her 70s.

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So, most likely, we’ll slow the spread via shut downs and warm weather through May. Then in June the virus will spread more quickly but the shutdowns will intensify as well, until October.

In short, the Australian economy is on the verge of a six month shut down. There won’t be much internal movement. The borders will remain closed, at first by us and then by everyone else as they get better but we get sicker. The private sector will bunker. And the public sector will enter a death struggle with the virus.

This is will deliver a gigantic recessionary shock unfamiliar to contemporary experience.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.