John Daley and Matt Cowgill have penned a thoughtful analysis of the coronavirus on the Grattan Institute’s Blog, arguing that the Australian Government must take decisive action now to limit social gatherings in order to slow the spread of the virus and prevent it from becoming a full blown pandemic:
Australia currently has 100 diagnosed cases of coronavirus, as of 10 March. Countries that have hit the 100 case threshold fall into two camps: those that saw rapid spread of the disease (China, Italy and Iran), and those with a managed case load (Japan, Singapore and Hong Kong). Australia would need to act as soon as possible to ensure we join the latter camp.
It took Italy around two weeks to go from having fewer than 100 diagnosed cases of coronavirus to having nearly 10,000 cases. The health system in the richest part of Italy is now struggling to cope with the load. The terrifying maths of exponential growth can see pandemics spread very, very fast. The rate at which the virus spread in Italy is not an outlier – it spread at a startlingly similar pace in Iran, South Korea, and China.
A range of other countries now look to be treading a similar path…
Not everywhere has experienced a week-on-week doubling of coronavirus cases. Singapore and Hong Kong, in particular, have gone down a different path, as did China and South Korea after their initial outbreaks. These countries have introduced widespread social distancing measures including the closure of schools, universities, childcare centres, public gatherings…
Further spread in Australia is now inevitable, as health authorities acknowledge. Australia can slow or stop the spread of the virus now by adopting social distancing measures that will have a real economic cost. One alternative is to adopt social distancing measures later with an even higher economic cost. The other alternative is to let the virus run its course, which will probably have a very high human cost in shortened lives, particularly of the elderly, and carries the risk of significant social break-down.
As MB has reported repeatedly, the lesson of Philadelphia versus St Louis in the Spanish Flu of 1918 is instructive:
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Philadelphia downplayed the Spanish flu and stayed open for three weeks, resulting in a virus pandemic and high death rate. By contrast, St Louis immediately clamped down and banned public gatherings, resulting in virus containment and far fewer fatalities.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
