Virus fortress economy cannot allow immigration or foreign students

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It’s bleedin’ obvious, at the ABC:

Victoria has requested logistical support from the Australian Defence Force and help from other states as it tries to tackle an increasing number of coronavirus infections in the community.

Overnight the state recorded 20 new cases of COVID-19, following a week of increased community transmission that left health officials “worried”.

The ABC understands the Victorian Government has requested 300 ADF personnel, mainly medicos, for logistical support like helping with hotel quarantine and working in hotspot areas.

New South Wales, Tasmania, South Australia and Queensland have accepted Victoria’s requests for support, although the full details of what resources were being sent by each state were not clear.

“Victoria has requested the assistance of other states as we continue to ramp up testing and community awareness in key coronavirus hot spots,” a Victorian Government spokesperson said.

“This support will mean we can get even more tests done and results back quickly — and a stronger effort to remind Victorians if you are sick, stay home and get tested.”

Victoria’s requests for resources come as health authorities roll out more testing sites in six local government areas identified as coronavirus hotspots, and try to engage with multicultural communities in those areas.

Breaking down the latest news and research to understand how the world is living through an epidemic, this is the ABC’s Coronacast podcast.

A spokesman for the Prime Minister said ADF personnel were already on the ground in Victoria, and there were talks about whether more could be deployed.

“The Prime Minister has been in regular discussions with Premier Andrews and the Minister for Defence about the possible further deployment of Commonwealth resources, including the ADF and their expertise, to assist Victoria to manage the spread of COVID-19,” he said.

“The Commonwealth Departments of Defence and Health are working with Emergency Management Australia to expedite a request for assistance from Victoria after the Victorian State Control Team determines what support it requires.”

There have been two separate coronavirus clusters linked to quarantine hotels in Melbourne — the Stamford Plaza Hotel and Rydges on Swanston Hotel.

Late last week Victoria’s Deputy Chief Health Officer Annaliese van Diemen said possible social distancing breaches by security guards working at the Stamford Plaza Hotel, which housed returned travellers in mandatory quarantine, could have contributed to the outbreak.

Federal Health Minister Greg Hunt said the nation’s Chief Medical Officer Brendan Murphy had taken the issue of hotel quarantine to the medical expert panel in recent days.

The Victorian outbreak is clearly being driven in large part by quarantine failures. Can the army change that? I doubt it. In part it’s just that people cannot be trusted, via Bloomie:

People infected with coronavirus were allowed to board aircraft and travel to Hong Kong in recent days, highlighting the challenge of controlling the pandemic while governments seek the safest ways to reopen borders.

Hong Kong’s health authority said one infected passenger arrived Sunday from Manila on a Cathay Pacific Airways Ltd. flight, and another was on a Cathay Dragon flight from Kuala Lumpur. Both were diagnosed with Covid-19 before they traveled. It also said 45 passengers on Emirates flights from Dubai over the weekend either were confirmed or probable cases. The airline only restarted flights to Hong Kong this month.

The infections underscore the risk of peeling back restrictions when the global pace of infections keeps accelerating. Airlines worldwide, largely propped up by government bailouts, have been lobbying to get their planes back in the air as they face more than $84 billion in losses this year.

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If immigration and international students are blocked for a few years then we’ll see deflating house prices, a lower AUD and recoveries in (ex-tourism) tradeable sectors but also stronger consumption given the virus will be contained.

If immigration and international students are allowed back in the best case is constant outbreaks of the virus, lower consumption, probably still lower house prices plus a higher dollar. And there’s a very high-risk case that we’d see rolling shutdowns and domestic demand cratering.

The Australian economy can get through this reasonably well if there is no second wave of virus. But if there is a second wave it will be calamitous.

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Thus, bringing in foreign students and immigrants is an asymmetric bet the wrong way.

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.