A few good businessmen back lockdowns, borders

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A poke in the eye for the rampant business lobby and media virus psychos. At the AFR:

ANZ Bank chairman David Gonski has thrown his support behind the second Victorian lockdown as the right strategy, saying stopping the spread of the virus needs to be prioritised over the economic impact.

Mr Gonski, the chancellor of University of New South Wales and former chairman of Coca-Cola Amatil and the ASX, said he disagreed with the “pessimistic pessimists” and was confident the economy would emerge from this “terrible pandemic”; it was “a question of when”.

“I agree with lockdowns. I may perhaps be one of the few who believe in it, but I do,” Mr Gonski said at an industry event on Tuesday.

And Ryan Stokes:

There are compelling economic reasons for Australia’s biggest mining state to have a hard border closure, according to Seven Group Holding boss Ryan Stokes.

Mr Stokes said WA’s highly restrictive border policy added complexity to intrastate workforce movement, but was proving its worth with the mining industry set to play a key role in leading the national economy out of the COVID-19 malaise.

“When you weigh it up, you can understand the logic. The fact that WA can continue to perform, or the industry can continue to perform, at the rate they are is testament to that,” he said.

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The bottom line is that these policy tools contain the virus and therefore boost the economy anyway. Those demanding the alternatives that value dollars over lives actually just end up costing everybody more given a loose virus shuts the private sector anyway. See Sweden versus Denmark.

That is not to say that NSW hasn’t done a fantastic job of virus containment using testing and tracing so far, but there are a number of reasons why it should be considered horses for courses and VIC did the right thing as well:

  • NSW cases will have benefited from the VIC lockdown and other border closures;
  • NSW is humid and warmer than Melbourne keeping more people outdoors;
  • the virus never got a strong foothold as it did in VIC;
  • non-virus jurisdictions have clearly supported aggregate demand.
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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.