Weekend’s protests a useful experiment on COVID-19

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Over the weekend, tens-of-thousands of protestors gathered cheek-to-jowl across Australian cities protesting for “black lives matter”.

Predictably, these protests have garnered backlash from several quarters over concerns that it could lead to a second wave of COVID-19 infections across Australia:

Premiers are facing a growing backlash over COVID-19 social-distancing restrictions after allowing tens of thousands of protesters to defy health warnings and attend Black Lives Matter rallies in major cities at the weekend…

Chief medical officers will discuss the threat of new COVID-19 outbreaks as a result of the rallies and delays in easing social restrictions when the Australian Health Protection Principal Committee, led by Chief Medical Officer Brendan Murphy, meets on Monday. It will consider updated advice to national cabinet on its three-stage COVID-19 economic road map…

Finance Minister Mathias Cormann on Sunday condemned the actions of the protesters as “reckless and irresponsible”.

“How do we say to a businessman that he is not allowed to open in order to help us slow down or suppress the spread of the virus, but we are going to have tens of thousands of people gather like they have on the east coast? There is a complete and utter double standard here,” Senator Cormann said.

While I understand their concerns, and concur that the timing of these protests was unfortunate, they do provide policy makers with a useful experiment that otherwise would not have taken place.

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That is, if the protests do not lead to a spike in COVID-19 infections, this would indicate that risks from opening up the Australian economy to all but international travel are low. In turn, the protests could actually end up benefitting the Australian economy.

Of course, there is also the risk that we do get a spike in infections arising from the protests, indicating that community transmission of COVID-19 is still a high risk and resulting in slower reopenning.

Let’s hope for the former.

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About the author
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.