The long shadow of the virus means there is no easy path back to prosperity | Australian economy

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The coronavirus launched its silent assault on the Australia Day long weekend without revealing its ultimate weapon. This placed the community in far greater danger than was appreciated at the time.

The first group of cases, announced on 25 January 2020, were treated with appropriate alarm by Australia’s then chief medical officer, Dr Brendan Murphy. But the initial advice he provided to the public gravely underestimated the threat. Murphy believed the virus could be fought without disrupting national life. He saw no need to close the border to prevent its spread. For those returning travellers who had been in the centre of the outbreak in China, he recommended that they see their doctor or go to an emergency department “if they become unwell”. Murphy’s advice gave the virus a head start because it didn’t wait for a patient to show symptoms. It was Australia’s good fortune that we learned of our mistake just three days later.

On 28 January Australian officials received word from researchers in Germany that the virus could be spread without the carrier knowing they had it. A local businessman had been infected by a visiting colleague from China who seemed perfectly healthy – there was no coughing, sneezing, fatigue or fever to alert either person. A similar case was reported in Japan.

Health officials the world over had assumed that this new virus would behave like its more deadly genetic cousin Sars, which jumped from person to person only once the carrier showed symptoms. But a silent transmission was a game-changer. It meant hundreds, potentially thousands, could contract the coronavirus before authorities knew what had hit them. To combat a pathogen this insidious and infectious, nations would need to shut down much of their economic and cultural life. They would have to close their borders to foreigners, place returning travellers into quarantine for 14 days, and aggressively test their local population.

Australia had two advantages in this fight. One was natural: we had a continent to ourselves. The other was human-made: our public health system.

But these advantages could be undermined by complacent policy making, as the United Kingdom demonstrated. The UK was physically separated from the continent of Europe and it had the National Health Service, an institution that was founded in 1948 – 36 years before our own Medicare. Yet neither advantage was exploited. The border was left open into May, more than a month after everyone else had shut theirs. Meanwhile, the NHS had been run down by a decade of austerity and was unable to cope with the caseload. At the time of writing, the UK had the second-highest death rate in the rich world after Belgium. This perspective is important to bear in mind. Australia made its own luck. The key was a willingness to learn from early mistakes.

Initially, Murphy, along with his fellow state and territory chief health officers at the Australian Health Protection Principal Committee, thought the virus could be managed by self-isolating from just one country, China. The decision to close the border to our largest trading partner and second largest source of new migrants after India was taken on 1 February. The critical piece of information for Murphy was the evidence of infections spreading beyond the Hubei province, in central China.

The most curious aspect of the policy response was not the country-specific ban, but the political theatrics associated with its execution. China had already locked down the city of Wuhan, where the virus was believed to have originated, as well as 16 neighbouring cities in Hubei province. That meant we wouldn’t be stopping many Chinese citizens from coming here because they were already being prevented from leaving. Of more interest was what would happen to the Australian citizens and permanent residents who wanted to return home from Wuhan. We wanted to let them in, and the Chinese gave us a small window to move before they stopped all travel. In the end, the two countries negotiated the evacuation of more than 500 men, women and children.

An evacuee from Wuhan in the Christmas Island immigration detention centre on 5 February
An evacuee from Wuhan in the Christmas Island immigration detention centre on 5 February. Photograph: Reuters

The first planeload of 243 left China on 3 February. Their destination was Christmas Island, where they would remain for a 14-day quarantine before returning to their lives in Australia. They were joined by 36 more evacuees, part of a New Zealand-operated airlift.

The deployment of Christmas Island was problematic. This particular offshore detention facility was the desolate symbol of Australia’s border protection regime. Now it was being enlisted to suppress a virus. Whether it meant to or not, the Morrison government risked equating the evacuees with the asylum seekers who had previously been detained, and demonised, on Christmas Island.

A second flight carrying 266 people left Wuhan on 9 February. But Christmas Island was full so the evacuees were taken to a disused work camp outside Darwin. Australians evacuated from the Diamond Princess cruise ship stranded in Japan were also brought to the mainland.

To be fair, these improvised measures were effective in containing the virus in February when it was already running unchecked in many other rich countries. Part of the explanation for the low infection numbers at the time was that Chinese Australians did not bring the virus with them. In fact, there were no cases at all among the 243 on Christmas Island.

But the message was lost on the bigots in the community. Complaints of racial abuse lodged with the Australian Human Rights Commission surged in February and March. One in three complaints in February alone were explicitly related to the coronavirus. Scott Morrison became increasingly frustrated with the attacks, and gave an interview to SBS in April to call on all Australians to unite. By choosing the multicultural broadcaster to deliver this message, he made clear whose side he was on. “I am massively disappointed because it’s just so wrong,” he said. “It’s so against who we are as a people, and it was the Chinese Australian community that protected Australia so early on in this virus outbreak around the world.”

The paradox, of course, is that Morrison sent them to Christmas Island in the first place. Perhaps he regretted the overkill because he didn’t repeat the exercise for people coming back from other virus hotspots. The border was closed to Iran on 1 March, South Korea four days later and then Italy on the 11th. Australians returning from these countries were told to self-isolate in their own homes for 14 days; the same requirement that already applied to those who had made their own way back from China. But there was no enforced quarantine. Murphy cites this as his one great regret.

“I would like to have formally hotel-quarantined people a little earlier, because most of our cases at that time were coming from overseas travellers, but there wasn’t the room in hotels to do it,” he told the Senate select committee on Covid-19 in May. “I don’t think it would have been practical. So we did it as soon as we could.”

It was a catch-22. The hotels had to be put out of business by the closure of the border to all foreigners before there were enough rooms available to quarantine returning Australians.

George Megalogenis
‘Large parts of regional Australia will face the twin pincer of population decline and accelerated ageing.’ Photograph: Ben King

The main threat to Australia at the time was from the North Atlantic, not Asia. The United States in particular had been slow to test for the virus, and President Donald Trump had dismissed the whole thing as a hoax. The privatised US health system was also woefully unprepared.

The evidence that the virus was running unchecked throughout the US was hiding in plain sight – here holidaymakers returning from the Aspen ski fields had spread the infection across some of Melbourne’s wealthiest suburbs in February and March. Then came the double shock of the Hollywood superstar and the Australian politician who brought the virus to Australia. On 12 March Tom Hanks and his wife, Rita Wilson, went into quarantine on the Gold Coast after they tested positive for coronavirus. The couple were in Australia filming Baz Luhrmann’s biopic about Elvis Presley. The following day, as the first of the domestic restrictions were announced by the national cabinet of commonwealth, state and territory leaders, the home affairs minister, Peter Dutton, revealed that he had picked up the virus on an official trip to the US. Yet there was never any serious consideration given to imposing a travel ban on the world’s richest nation.

This undue deference to the US meant that infections surged from fewer than 200 cases on 13 March to more than 2,000 by the 25th. Two-thirds were from overseas. The numbers were supercharged by the case of the Ruby Princess, the boat no one thought to stop, or at least test for coronavirus, before its 2,700 passengers were allowed to disembark in Sydney on 19 March.

Murphy offered a possible explanation for that infamous lapse in his evidence to the Senate select committee.

“It had only been to New Zealand and back, and New Zealand was not seen as a high-risk country,” he said in response to a question from Senator Kristina Keneally, a member of the committee.

“I think everyone was quite surprised at the fact that there turned out to have been a significant Covid outbreak on that ship. On first principles it wouldn’t normally have been seen to be a particularly high-risk vessel.”

Keneally: “We certainly did know, though, that cruise ships presented a particularly significant risk. We’d had the Diamond Princess a month earlier.”

Murphy: “Exactly.”

It appears that an unconscious cultural bias undermined our early response. We fell for the trap of treating this as an Asian virus, an Iranian virus, then an Italian virus. The global nature of the pandemic was not fully appreciated by Australian health officials until mid-March, six weeks after the first asymptomatic case was reported in Germany.

The border was finally closed to all foreigners on 20 March, the day after the Ruby Princess docked. By the 25th, Australians were banned from leaving the country and every state except New South Wales and Victoria was closed to interstate visitors. A 14-day hotel quarantine for all Australians, regardless of the country they flew in from, was belatedly introduced on 29 March.

These measures helped to suppress the virus in April and May, and moved Australia on to the shortlist of role model countries that had flattened the infection curve. Then a spike in community transmission in June, linked to poor hygiene and lax controls in a handful of Melbourne’s quarantine hotels, provided a timely warning that the virus had not finished punishing complacency.

The pandemic has not only ended Australia’s record run of economic growth, it has taken the recovery out of our hands while we wait for a vaccine, or an effective treatment.

Australia’s wealth relies on open borders. We earn export income from mining, agriculture, international students and tourism. That last part of the equation – migration – has been responsible for the majority of Australia’s population growth since the early years of the 21st century. Before the lockdown, only two capitals – Brisbane and Hobart – and one region – Queensland – defied this trend by sourcing a majority of their population growth locally, through net natural increase and internal migration. In Perth international migrants accounted for 53% of the city’s population growth, in Melbourne the figure was 66%; in Sydney it was 85%; and in Adelaide it was 100%.

There is no easy path back to prosperity as long as the borders remain closed or tightly controlled. This seems perverse on one level. Australia’s reputation will be enhanced by its management of the health crisis. But while the virus is still burning around the globe, anyone who wants to migrate to Australia will have to be quarantined on arrival for at least 14 days. They may a face a second quarantine if they want to settle in a different region.

Australians celebrate Australia Day
‘Even a year without mass migration risks turning a health-induced recession into an economic catastrophe.’ Photograph: Chris Hopkins/Getty Images

Australia has held the door open to mass migration since the end of the second world war. Wave after wave, from Britain, Europe, Asia, the Pacific, the Middle East and Africa, have transformed our identity. No other country we compare ourselves to is as diverse. We are a majority-migrant nation, in which more than half the population was either born overseas or has at least one migrant parent. We crossed this threshold in 2018 when Australia’s population hit 25 million.

Even a year without mass migration risks turning a health-induced recession into an economic catastrophe. Sydney’s property bubble could burst – perhaps Melbourne’s as well. Adelaide’s population will stagnate, and possibly start to fall. Large parts of regional Australia will face the twin pincer of population decline and accelerated ageing.

The examples of past booms and busts contain a recurring theme. The three long runs of prosperity in Australia’s history – the wool and gold rushes of the 19th century, the postwar reconstruction of the 1950s and 60s, and our uninterrupted growth between 1991 and 2019 – had a dominant Melbourne in common. The Victorian capital was the fastest growing city in each boom because of its ability to attract and retain people from overseas, and to draw people from other parts of Australia.

Prosperity was shared in the closed economy of the 50s and 60s. Adelaide, for instance, was lifted by the same migration and manufacturing waves as Melbourne. But in the open economies of the 19th century and again in the years since the reforms of the 80s and 90s, wealth and power has been concentrated in Melbourne and Sydney.

Typically Melbourne, the city that flew highest during the boom, suffered the hardest landing in the crash. The two most spectacular chapters were the long depression of the 1890s and the deep recession of the 1990-91. On both occasions, large numbers of people fled the cosmopolitan south for the frontier states – to the Western Australian goldfields in the 1890s and to the early retirement of Queensland’s south-east in the 90s. This allowed Sydney to resume its position as the nation’s unofficial capital, while Melbourne waited sullenly for the next migration wave to break in its favour.

Sydney is more vulnerable this time because its property market has further to fall than Melbourne’s. Sydney was already losing 25,000 people a year to other parts of Australia before the first lockdown in March. Most were moving to Brisbane, where housing was cheaper. Melbourne, on other hand, had been attracting people from other parts of the country, most notably Adelaide. But that internal advantage was lost once its 5 million people were forced into a second lockdown in July, and every state and territory shut out travellers from Victoria.

Yet Sydney and Melbourne are also the capitals most likely to find new drivers of growth while our doors remain closed to the world, based on the talent they have already hoarded. Between them, the two cities account for just over 40% of the nation’s total population, but more than half of all its migrants, including more than 60% of the Indian-born people living in Australia and more than 70% of the Chinese-born.

The virus will cast a long shadow, even after it is eradicated. The challenge for Australia is to maintain cohesion during the health and economic crisis. Otherwise, the recovery may find the nation permanently divided.

• This essay will be part of the anthology Fire, Flood and Plague, edited by Sophie Cunningham and published by Penguin Random House in December

Source: The Guardian
Keyword: The long shadow of the virus means there is no easy path back to prosperity | Australian economy

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