Costly Covid bungles

We should be exercising more Covid caution, on both the financial and health fronts.

Perhaps in 2022 we are a bit bored with Covid compared to 2020 and 2021 when we anxiously awaited the state-by-state figures each day. But the 2022 Covid story is far more serious.

First to some brief statistics. Two-thirds of the deaths in Australia since the first Covid outbreak occurred in 2022, that is in the first four months of this year. The raw number of deaths per day has gone up roughly 12 times from 3 per day in 2020 and 2021 to 40 per day this year. It is a very big spike and knowledge of it is not very widespread.

To the end of 2021 we had 360,000 cases. In the four months of 2022 we have had a further 5.6 million cases. That is what you call exponential spread.

This has been the price of opening up, the price of “freedom”.

Two myths need busting. The first is that after business and recreational life return to normal, Covid will settle down to something like the flu.

Flu kills around 1000 people a year in Australia, but it fluctuates – some years half that, some years double. In 2022, Covid has killed nearly five times the usual annual flu toll and we are only four months into the year. And we have a far higher vaccination rate for Covid than flu.

The off-setting news is that with the fully vaccinated rate at 85 per cent and climbing, the death rate has plummeted in 2022 from 6 per 1000 to a little over 1 per 1000. In short, the unvaccinated are six times more likely to die.

That news tells us that Australia was much too slow off the mark with vaccinations and with effective quarantine – essentially Federal Government responsibilities. The consequence was that the states were virtually forced to impose lockdowns.

The Morrison Government claims it has handled the pandemic well, saving 40,000 lives and returning the country to normalcy.

Not so. The fact that Australia is an island and can shut out people easily and the fact that the state governments (both Liberal and Labor) took effective action were the reasons Australia did farily well. It was despite the Morrison Government, not because of it.

The Morrison Government’s dithering over vaccines has cost Australia dearly economically – leaving the deaths aside. 

A paper published this month – The Race That Stopped a Nation: Lessons from Australia’s COVID Vaccine Failures – by Richard Holden of the University of New South Wales and former ANU economics professor and now Federal Labor MP Andrew Leigh tells the story.

In early 2021, Australia had the lowest fully vaccinated rate in the OECD. Morrison was repeating his mantra that the vaccine roll-out was “not a race”. So, by the middle of last year when the Delta strain struck, Australia was hopelessly unprepared.

The Premiers and Chief Ministers, Liberal and Labor, did not want to see their unprotected people die so sent their states into lockdown to stop the virus spreading. It worked, but at a cost of $30 billion according to Holden and Leigh.

The Coalition Government – as is its wont – waited for the private sector to act and showed a remarkable reluctance to “waste” public money on a public-health campaign. 

And with quarantine it relied on private sector hotels rather than purpose-built quarantine stations or quarantine stations converted from immigration detention centres. The hotels were worse than useless. They helped spread the disease.

It also failed on testing. Not enough tests resulted in long queues and people giving up. It still fails on rapid antigen tests. They should have a QR code to make reporting easier. Again. the Government did not want to “waste” money on public health.

This attitude and its grievous economic consequences should not be forgotten when the Coalition asserts that it is the best economic manager.

Australians should now be questioning the stripping away of virtually all Covid controls. Intelligent economic management suggests we should be retaining as many cheap and easy controls as possible in order to prevent the need for costly lock-downs.

And now we come to our second myth. This is that successive Covid strains will get weaker and weaker.

The truth is that we do not know. Certainly, the plague which hit Europe in the 1340s got less deadly with successive reappearances over the next three centuries. But that is a long time to wait.

Conversely, the smallpox virus remained just as deadly in 1978 as it was in 1778. In 1978, Janet Parker, a medical photographer at Birmingham University Medical School, was the last person to die of the disease after contracting it from a research sample. As far as we know, all research smallpox samples have since been destroyed.

The point is that a Covid strain more deadly than Delta could strike anytime. We should ensure that a strike like that is slowed by maintaining a degree of mask and vaccine mandates until we know a lot more.

Mask and vaccine mandates are very cheap compared to lockdowns. Moreover, we know that whereas Covid vaccination drastically reduces mortality and morbidity, it does not eliminate it. In that respect it is like the flu, but unlike a raft of other diseases where vaccination gives a 99 per cent guarantee of protection. That tells us that cheap, effective protections beyond vaccination are worth keeping.

Finally, Australia should rebuild its economic resilience as well as its public-health resilience. Indeed, they go hand in hand.

In this election campaign, the major parties have been throwing ministerially discretionary money around in marginal electorates like confetti. Most of it is directed at silly little projects that local governments should do; wasteful, unproductive sporting facilities; and uneconomic roads to nowhere.

So far this election the Coalition has made $23.5 billion in pet-project promises, far outstripping Labor’s $1.8 billion.

This is shocking economic mismanagement at a time when the Budget deficit is hovering at $80 billion a year and Australia’s national debt fast approaching $1 trillion.

Worse, it is, as described by former Victorian Appeal Court judge and integrity commission campaigner Stephen Charles, simple corruption.

Crispin Hull

This article first appeared in The Canberra Times and other Australian media on 26 April 2022.

One thought on “Costly Covid bungles”

  1. This is shocking economic mismanagement at a time when the Budget deficit is hovering at $80 billion a year and Australia’s national debt fast approaching $1 trillion.

    Worse still is that the LNP has abandoned its “debt and deficit” wedge against Labor now that they have recorded a $134.2 billion deficit of 4 times the average of the last 2 Labor deficits 2012-2014 of $33.6 billion. And net debt 30 June 2022 is $631.5 billion, increasing to $864.5 billion by 30 June 2026.

    Treasurer Frydenberg 11 Feb 2020 “Could you imagine responding to the challenges we face, with the fires, the virus, the floods, the drought and the ongoing trade tensions between the US and China, with a $48½ billion deficit? We would have had to put up taxes!“. Treasurer Morrison 31 May 2018 “when we came to government we had to deal with the economic and fiscal catastrophe that was left to us by those who sit on that side of the House now”. 27 June 2018 Treasurer Morrison said “We have wrestled Labor’s gorilla of debt to the ground”.

    But they neglected to defer the stage 3 tax cuts until the debt and deficit come back to manageable proportions. The PBO estimated stage 3 would cost $15.7 billion in 2024-25 of which $1.3 billion goes to taxable incomes more than $347,000; $6.3 billion to taxable incomes more than $180,000: $8.5 billion to taxable incomes more than $150,000. $2.5 billion goes to taxable incomes up to $90,000. The cost progressively increases to $30.5 billion in 2031-32 when $1.6 billion goes to incomes above $462,000; $19.3 billion to incomes above $150,000 and $3 billion to incomes up to $90,000.

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