Virus suppression will break “Australia”

Let’s put aside the debate about whether or not Victoria should or shouldn’t crush the virus. Instead, let’s focus on where it is actually going right now.

Victoria’s lockdown is backsliding already, under assault from rent-seekers that long ago put aside doing business for lobbying. At rentier headquarters, the AFR:

The Victorian Andrews government has made concessions on lockdown restrictions for business, after a revolt by top CEOs including Woolworth’s chief executive Brad Banducci who has secured a compromise deal for Woolworths, Coles, Aldi and Metcash.

Concessions revealed by the government on Thursday included greater flexibility for building and construction work, allowing metal workers and concessions for flower growers, poultry farmers, seafood and small abattoirs, as well as car parks for essential workers.

So, this Stage 3.5 lockdown is now much more likely to result in an ongoing pandemic.  Given the lack of will, lack of foresight and fragmenting political economy, VIC will be very fortunate to cut virus numbers to where NSW has them.

What will that look like then?

First, social distancing and ongoing fear will suppress demand for as long as the pandemic lasts. The likelihood is there will be further lockdowns as suppression fails from time to time.

Second, no state, probably not even NSW, will open up to VIC so long as the pandemic lasts. None of SA, WA, QLD, TAS, ACT and NT will open their borders to either, suppressing demand everywhere so long as the pandemic lasts.

Third, it will be impossible for Canberra to open international borders either, suppressing demand so long as the pandemic lasts.

Meanwhile, Australian identity will disintegrate as various state leaders mobilise their polity’s anger against others. In some cases, quite rightly. Canberra has already lost the faith of the entire polity, so it will not be able to do anything to stop it.

Australia will fragment into non-virus and virus jurisdictions. The commodities fortress economies will radically outperform the property-busted and deflating south-eastern virus economies, and the entire edifice of Australian horizontal fiscal transfers will come under immense strain. The national economy may never recover.

It’s hard to believe that it could come to secession and kinetic conflict. But if there is no effective vaccine and the pandemic runs for five years then who knows? Just imagine if WA decided to keep a larger portion of iron ore taxes to boost its fortress economy, for instance. Will Clive Palmer invade WA with Canberra’s backing?

See Bloomie today:

Covid-19 has created an economic downturn that will cause a “pandemic depression” in many countries, according to World Bank chief economist Carmen Reinhart.

The world will follow a path similar to the 2008 global financial crisis, only worse…

…The Reinharts warn that an economic rebound shouldn’t be confused with a recovery. In all of the worst financial crises since the mid-19th century, per capita gross domestic product took an average of eight years to return to pre-crisis levels, they say. The Reinharts encourage countries to press on with fiscal and monetary stimulus.

Without a vaccine, that nobody knows is coming, virus suppression will break “Australia”. It already is.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

  1. no vaccine + total lockdowns = bust, surely that’s a no brainer. I can’t see a way out of this mess now. It hasn’t been eradicated and it’s unlikely to be.

    • Ronin8317MEMBER

      COVID have been eradicated in Taiwan and New Zealand. It was eradicated in Singapore and HK too until they re-opened the border, then it went BOOM again. China is the same : no cases on mainland for a long time, but it keeps leaking out from people in quarantine, and have to shut down again.

      So eradicate is possible, but you MUST keep the border closed until a vaccine/cure is available. This is what QLD and South Australia is discovering right now : people simply cannot be trusted. WA have the right idea with their hard border approach.

      • exactly my point. Sure viruses can be eradicated like the original SARS. This one however is much more transmissible and without a very high level of compliance it will be transmitted. Understood about Taiwan etc, they are great models but exactly as u said opening up lets it break out again. We can’t be closed forever and the virus will be circulating somewhere even if it is O/S like India or somewhere, hence no vaccine = life with virus. NZ will be paradise for a while virus free, but what happens when they have to open borders, you know for travel etc? I think it will be circulating somewhere in the world. I can’t see aussie’s in the entireity changing behaviour for distancing etc, therefore the most likely outcome for me is total lockdowns + no vaccine = bust

        • But you don’t make any point at all. You just say “Bust”.

          Why is it a bust ? The only variation on life is that you can’t go on a holiday to Bali. As already pointed out the mathematics are fairly straight forward on tourism.

          So how is it a bust. We continue world trade, we continue exporting everything, increase domestic resilience. The ending of unfettered air travel will also fix global warming.

          Win win win.

          Unless you have a point to make apart from “I don’t like it” – thanks Pauline.

          • apologies, just overindebted people losing jobs n businesses n properties n stuff, I thought it might be significant enough to call bust, my mistake (I’ll tone it down to < bust, to = a few people hurting in sectors), I might need another coffee to get some optimism everything will be fine, carry on. You're right hopefully we keep exporting lots of minerals, I forgot. Apologies again.

          • innocent bystanderMEMBER

            you have just described the current WA.
            I have to say it is quite comfortable.

        • Agree. Seems a lot of people want us become the N Korea of the pacific-no one in and no one let out subject to some bureaucrats whim.

      • HK never reopened the border. There has been mandatory 2-week quarantine for permanent residents; anyone without a permanent residency cannot enter the city. It’s been this way since March. Transit passengers were also stopped until a short while back. What did happen, shades of what I gather happened in Victoria, was that there were various exemptions (sea crews, air crews) that seemed to allow the virus to get back in. There is also freight from across the border that you simply can’t stop (otherwise the city would starve).

        • And you trust the CCP that they didn’t have people traveling into HK? You know the ‘police’ from the mainland that are enforcing the new law there….
          Come on…..

          • That’s not what I said. What I said was that HK never reopened the border to o/s travellers (non-PR). There were always exceptions though; which I think is what got Victoria into trouble (as well as the security guards etc).

            Tbh I suspect the numbers in HK were a little suss for that whole period where there were reports of “zero new cases”.

  2. The Dis-united States of Australia has been coming for a long time, after all WA did vote to leave the federation in 1933.

    • We are full of half-measures. Take for example:

      Third, it will be impossible for Canberra to open international borders either

      Just this week 200 mango pickers arrived in QLD the NT from Vanuatu.

      Or look at Nicole Kidman, Danni Minogue and Delta Goodrem being exempted from hotel quarantine.

      Australia is so full or special interests exempt from laws that we sure as f_ck aren’t “all in this together”

      • That is key in the discussion. If we are going for suppression and asking the vast majority to make huge sacrifices then it should apply to all without exception.
        No diplomat or politician exemptions. If you travel, you hotel quarantine on return. No exceptions. No billionaire or celebrity exemptions.
        My concern is that all will eventually be for nought as our overlords and betters craft small exemptions for themselves. We can already see it happening. At some point someone will reintroduce the virus this way and it will be back to square one.

  3. Well then, no Viccos in Noosa this year – so this shambles has that going for it 😉

    • Unfortunately it is little Victoria…………. still full of “saddlebags with eyes”, lips that remind me of a Kenny Everett skit, small white footballs dogs, thick gold chains and air heavy with face powder. Basically a retirement village for those living the stereotype…………. shudder.

      • That, it is … and utter bell ends in their Porsche Macans carrying an expensive mal on the roof.

        Used to be a hippy settlement once — mind you, so did Byron Bay (which is brimming with fake people – just a slightly different set)

  4. The federal government will open the borders and release the mandatory quarantine iPhone / Android app to self isolate. Additionally, there will be COVID test stations at the airports. Likely within a few months.

    • SPUD’s jackboots will marshall all of these.
      Welcome to the travel permit, dystopian future.
      Your home is now your prison cell you’re paying off.

    • Arthur Schopenhauer

      There will be no App. They don’t have the people or the skill to deliver it.

      • drsmithyMEMBER

        Nothing a few tens of millions thrown to a mate can’t fix !

        It’s not like it actually has to do anything useful.

  5. Contemplating a break up along State vs ethnic lines is very optimistic, particularly given the extent of foreign RE ownership in this country.

  6. SoCalSurfCreeperMEMBER

    The problem is all these governments are making decisions without end-goals defined. If you’re going to destroy the economy you need to have a goal. A success criteria. As far as I can tell none of them do.
    And if you want people to line up you need to communicate it. Why is Victoria locked down? To flatten the curve? To eliminate? What happens when we reach that goal?
    They don’t know, and they’re making it up as they go along.That will prolong the twin disasters – health and economy – and guarantee failure at both.

    • I think Dan wants elimination but isn’t allowed to say it. Or doesn’t think it’s the right time yet. When we’re on the cusp of elimination, then he’ll tack on a couple of weeks.

      • SoCalSurfCreeperMEMBER

        He won’t achieve elimination by making exceptions for favourite sectors like construction. Ok Taiwan and NZ did it but virus wasn’t nearly as widespread. Melbourne’s rate appears similar to many of the more moderately affected US cities.

  7. Ask the average Melbournian – what is the aim of this lockdown?

    Few will say ‘elimination’ even though that is the mumbled actual goal of Dan Andrews.

    If the public is not onside with the immense pain of elimination it will not succeed. Anti-lockdown organisations are sprouting all over the community and its only a matter of time before there are serious protests.

    • From reading on MB and elsewhere, it seems Strayans are pretty united in wanting elimination. Of course, there are always noisy renegades.

    • Arthur Schopenhauer

      Not what I am hearing AM. But there are plenty of sock puppets promoting the idea.

  8. All of the above Or we follow the rational Swedish model with a particular emphasis on protecting the vulnerable

    • Problem is we’re all vulnerable, not just the wrinklies. Look at the long term impacts on people who’ve been symptomatically infected, wouldn’t wish that on anyone (with a few fu<ktard exceptions)

    • SoCalSurfCreeperMEMBER

      I’m beginning to think that history will show Sweden nailed this. Why are deaths trailing down to less than a handful a day? Their behaviours may have evolved but probably not dramatically. Is an immunity effect emerging? In the USA it also seems like the areas that got hit really hard the first time around are escaping the worst today. New Orleans was a disaster in April. Now the rest of Louisiana is, but New Orleans seems to be over the worst. It has not yet reemerged in New York City, where some estimate up to a third of the population have antibodies. Winter will test this hypothesis.

      • Science has already spoken, and the history has been written. Sweden failed in the most spectacular manner possible with the worst outcome of any nation. As their cases skyrocketed the openly admitted their failures.

        Zerohedge – where you get your information once infowars went quiet, fails to mention that Sweden completely CHANGED their approach to things when there was huge public outrage at the number of deaths occurring.

        But you only read what you want to hear.

        • They admitted their failure on not protecting the vulnerable. That they did not protect those in nursing homes. They did not say the overall approach was a failure.

          We need to do it Sweden style, but better.

      • SchillersMEMBER

        SWEDEN : Population 10m Coronavirus cases 81,967 Deaths 5,766 Active cases 67,904
        AUSTRALIA: Population 25.5m Coronavirus cases 19,890 Deaths 255 Active cases 10,941

        • SoCalSurfCreeperMEMBER

          Too simplistic. That is a snapshot in time. Assume for a moment there is never a vaccine. By letting it run its course Sweden may be at the tail end of it. The charts are sure beginning to look like it. Where is Australia in the process?

          • drsmithyMEMBER

            Too simplistic. That is a snapshot in time. Assume for a moment there is never a vaccine. By letting it run its course Sweden may be at the tail end of it.

            Or they may be digging themselves into a hole that they can never get out of because it becomes environmentally entrenched and end up with a massive long-term public health problem.

  9. The commodities fortress economies will radically outperform the property-busted and deflating south-eastern virus economies

    I agree, assuming China isn’t crushed by the global depression like everyone else. If the CCPs greatest Ponzi fails, then Western Australia done, as it’s only material industry dies. We have nothing else to replace even 10% of it. Grim.

    • I predict in 100 years we’ll be largely agrarian with a far smaller population. How we get there – well how have any countries/civilisations got there….

      Albert Einstein said, “I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.”

      Sell IPs now Lol 🙂

  10. Total lack of leadership from Scummo, as usual. That windbag is a dud. WA might end up seceding if Scummo ruins the eastern states through his negligence and buck passing.

  11. mikef179MEMBER

    “per capita gross domestic product took an average of eight years to return to pre-crisis levels”

    But isn’t the point just before a crisis is when the economy is usually overstretched anyway and assets are at extreme levels? Aren’t corrections fairly natural? I concede that this one is probably on the extreme end but then debt and valuation levels were extreme, so…

    Should we not be talking about having an economy that doesn’t get overstretched and so won’t fluctuate so wildly?

    • don’t start getting sensible now mike…the vested interests will hunt you down and lock in you a Melbourne skykennel

    • Come on mate – macrobussiness is rolling out some hysterical click bait like its mentor Zerohedge to get the advertising numbers up. Can’t have basic common sense.

      David has stated that Australia is now completely “broken” – thats it, its all over mate. Can’t see anyone surviving the end of the week.

  12. But I thought “we’re all in this together”?

    So the government back pedals on restrictions, allowing concessions for construction because it’s “the lifeblood of the Victorian economy” — despite high unemployment, commencements falling, population growth falling, property prices falling, commercial & residential vacancies shooting up — yet other workers in a more precarious situation (see retail, hospitality and other casual workers) are thrown under the bus.

    Well done, guys.

    People are already pretty frustrated with Stage 4 restrictions — and these ridiculous half measures to satisfy lobbyists only serve to build resentment and mean others will flout the rules and not treat the lock down seriously.

  13. Australia will fragment into non-virus and virus jurisdictions

    It’s already started. Front page of the Courier Mail the other day was “Maroon Fortress”. Qld is basking in it.

  14. Victoria has already flattened the curve – case numbers will trend down significantly next week, and based on everywhere else in the world will be back down below 100 within a fortnight. From there we will be back around NSW numbers within a week.

    Could you be a bit more alarmist maybe David. Surely you could have said we only have a month to live or something more outrageous.

    No – like everywhere else on earth – we wont “break”.

    These articles are going to look friking ridiculous in hindsight.

    • Surprising from the Murdoch press? They’re now shatting bricks having lost all their advertising revenue. Elimination will be difficult with them and the usual rwnj undermining the policy at every step.

      Scomo needs to decide the course, persuade the premiers and everyone can unite in euthanizing their nearest and dearest or acting responsibly for a few weeks while we starve it out. Fun times, hope Murdochs empire is irreparably harmed, hes a cancer on progress.

  15. GunnamattaMEMBER

    Eradication is the only real srategy short of a vaccine.
    Suppression is just a path to Zombie status. The shortcomings of the ‘suppression’ approach are fairly obvious – rolling lockdowns of greater or lesser magnitude, which ream the economy ever more, and lots of people dropping off the twig.

    I think all of these businesses and corporate types warning of the risk that large numbers of firms may never come back if we have more lockdowns are missing the point.  Australia has created a bubble economy over the course of a generation.  A large number of firms shouldn’t have existed in the first place if the Australian economy wasn’t a bubble, and that the limitations of being in a bubble include a heightened risk of mortality for a number of economic entities inhabiting the bubble the moment the bubble is popped.  Yes that will be immensely painful, but the pain relief should be targetted to an individual or household level rather than to a corporate entity level, because a lot of those corporate entities are going to be nothing but polyps ever again.  An awful lot of those corporates wanted the bubble economy, they wanted it to go on forever, they had based their entire model on the bubble going on forever, and they were wrong.  It has now ended, and nothing will be bringing it back.  Nothing will be bringing a lot of those firms back, and the only real question is how much ‘support’ to offer them on the way out the door.  Zilch would be my preference, for they consumed all of the support a government once might reasonably have offered in their road to this point.

    I find myself wondering if the lack of impetus on eradication (at a Federal Government – ScoMo and the Torynuffs – level)  reflects the idea that with the US manifestly never being in a position to ever eradicate the virus (without a vaccine), and the UK being in roughly the same boat, and the vague idea that if our cultural frames of reference are never going to be able to eradicate the virus then we may be doing ourselves a disservice if we do.  That combined with the sheer enormity of the economic restructuring Australia needs to get cracking on if it is ever to be able to think about providing a half decent economic bequest for future generations.

    • Display NameMEMBER

      The reticence at a Federal level for eradication is likely that migration is harder to start if you have a fortress economy chugging along as opposed to one constantly “living with” the virus. Nothing to lose in the latter case. And some belated growth as well even as it tanks living standards even more.

    • Outside of individual parents for their own children it appears most do not have a care for the future of the country, its people or its environment. We will need a wholesale collapse of current systems to create what needs to be created. Humans are terrible at gradual change. We need great disruption and great pain for great change.

      People also have to start giving a shit.

    • Gunna – you have come from somewhere that had a revolution
      My best friend is Russian so he has educated me well on its origins and who basked in the death of the many.
      How do you feel to see the police chiefs loving their new powers and most Aussies saying “Yes Sir No Sir…3 bags full sir”?
      And the journos stirring people up to attack cars with Victorian numberplates if out of state….

    • I read an article by a Dr who contracted it and he thought he recovered but then ended up with seizures and heart problem. Definitely a terrible virus that needs to be eradicated or vaccinated against, just not sure how we go with total lockdowns and jobs. Thanks for that lancet article, terrible stuff.
      Local Latest: Mosman GP tells of his terrifying experience with …www.mosmancollective.com › latest › mosman-doctor-t…

  16. You touch on an interesting point, about virus no virus jurisdictions, and it won’t stop there. As many locals end up with nothing and unemployed, the idea of multiculturalism will really be tested as more locals demand first options to jobs over students/immigrants etc. I would expect also more flights out of VIC back to home countries with a number of people that won’t be eligible for assistance and now with no jobs again left with no choice but to return home.

    • SoCalSurfCreeperMEMBER

      Golden opportunity for a savvy populist. I hope we get someone good. Couldn’t do much worse than the ALP/LNP.

  17. d*CTORX will not go unheeded

    he is our cassandra

    this site will owe him a collective apology within a years time or so

  18. kiwikarynMEMBER

    You guys should probably stop holding up NZ as the model, unless you actually want to do what NZ did, which you clearly don’t judging by your half-assed attempts at a lockdown. All these worker and job site exemptions, when the entire problem was supposedly too many sick people going to work. Guess what, if people are allowed to work, they will continue to go to work, sick or not, because (a) their employer makes them, (b) they might lose their job if they don’t, and (c) they dont qualify for Govt benefits (being non-Australian).
    In NZ all construction sites were closed. If your house was only half dried in, tough luck. If you were a flower or vegetable grower you left your crops to rot. If you were a non-hospital allied health practitioner you were closed even though that meant people ended up with permanent disabilities as a result. There were no sick migrant workers running all over town delivering food prepared by other sick migrant workers in restaurant kitchens.
    The current Covid strain that is circulating is more virulent than the original one, so what worked in March might not work again. And it especially won’t work if you are not prepared to do the hard yards in the first place.

    • Arthur Schopenhauer

      Yes, the construction exemption is odd. There is a site down the road racing to finish. 50% in masks.
      A few days ago, a young tradie with a hacking dry cough parked in front of our house. No mask.
      It shits me that some non-essential businesses have to stop, while tradie world carries on regardless.

    • Well, dare I say WA is a better model of success than NZ?
      We achieved all that NZ did, WITHOUT such measures, and still allowing our people a measure of normalcy and business to go on.

  19. That is an interesting read, as you say you need to park the debate of whether Vic can or cannot eliminate to then road map out what occurs if they do or don’t.

    The variable that remains massively unknown is multifaceted being;
    i) A vaccine will exist one day
    ii) The time it takes to get to vaccine (MB itself has published articles saying 4 years, *gulp*) and
    iii) The effectiveness of such a vaccine
    4 years of crippling economic winter/isolation from the World to arrive at a vaccine with and effectiveness in the high-teens % (like a poor flu season one can be) starts become a much more unpalatable scenario where they would all have to face, delayed, 80%+ of what could be done and dusted now.
    Even in pre-Covid MB when arguing to reduce the immigration intake from 200k+ it was acknowledged that going to zero never really was reasonable as you wouldn’t be taken seriously and the collateral damage from the collapse of the “ponzi” industries would inevitably hit everything else. Similarly I doubt the resource States could avoid the collateral damage of NSW/Vic imploding unscathed. The economic impacts shouldn’t be understated.

    Although I do appreciate the article at least giving it a crack and further acknowledge the risk calculus is incredibly difficult due to us still learning about the virus and that above noted known-unknowns.

  20. It is times like these that I am glad that I don’t have kids.
    The future of this country and its youth is bleak.

    • Raising children is the purpose of life.. to be a link in an unbroken chain.. and is of immense importance.
      Think of all the sacrifice your ancestors went through to get you to this point.. on two levels..
      1. They faced infinitely worse, and were bring children into a world infinitely harder and harsher.
      2. They put in that effort so the world would eventually receive you.. and in so doing carry their ancestors’ legacies onward.

      Good times will come for our children again.. but only if we have created them (the children that is).

      • Children might be the purpose of life for some and give purpose to many others; it is not for everyone.
        If you really think that “good times will come again” you really aren’t paying attention and/or are willfully ignorant or deluded.

      • I agree with you both. I didnt know what life was until I had children. They are the purpose of life.
        Having said that, I do know of some people that should definitely not have children under any circumstances.

  21. Do you really need car parks businesses to be open? Can’t you just park anywhere now? As no-one is driving around, who will miss a lane or two.

  22. The likelihood is there will be further lockdowns as suppression fails from time to time.

    No need to say “from time to time” since suppression itself is a fail as we can now see in Victoria. There is no such thing as reliably “containable numbers” unless that number is zero. The only thing that can work is community eradication.

    Sheer incompetence led them to drop back from level 3 restrictions at the beginning of June while there was STILL community transmission and when they should have known from Cedar Meats etc how difficult it is to contain outbreaks under level 3.

    Then when it was obvious that things were going pear-shaped again from the 10th to the 20th of June they refused to re-impose level 3 restrictions until it got far worse.

    Incompetents are running the show here.