Scott Morrison yesterday warned more Australians will likely lose their jobs after the unemployment rate jumped to 7.1% in the recession “we shouldn’t have had to have”.
The Prime Minister’s statement to the House of Representatives evoked Paul Keating in describing the recession, saying it would never have happened without COVID-19.
While the COVID-19 shutdown has undoubtedly been devastating to many Australians, as all deep recessions are, there are silver linings that should leave Australian in a stronger and more sustainable position once the crisis is over.
Let’s list these silver linings.
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 to above, COVID-19 has exposed our universities’ unhealthy and corrupting addiction to international students, as well as the CCP’s corrupting influence.
Fourth, COVID-19 has finally ended Australia’s long “recession free” run, getting the monkey off policy makers’ backs.
The desire to keep Australia from experiencing a technical recession has 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, policy makers will no longer be under pressure to keep the GDP streak alive via policies that boost growth, but erode individual living standards.
Fifth, COVID-19 has shifted the Morrison Government towards the centre and broken down federal/state barriers.
In particular, we are now likely to see a permanent increase in JobSeeker, alongside lasting improvements in federal/state cooperation via National Cabinet. Such advancements were unlikely pre-COVID.
Finally, 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 environmental benefits, cost savings and congestion benefits. It also mitigates the need to invest in expensive new infrastructure to boost capacity on roads and public transit.
In terms of productivity, WFH offers large benefits.
No doubt I have missed other benefits that are likely to arise from COVID-19. I’d be interested to hear your thoughts in the comments below.
