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Victorian Premier Daniel Andrews

As the rate of infection slows in Australia and in other countries in various stages of lockdown, the question of when the draconian restrictions on us will be lifted will become ever more acute.

Some experts, like ANU’s Peter Collignon, think we’ve already gone too far and social distancing was working fine before governments started punishing people for leaving their houses.

Others figures, like Victorian Premier Daniel Andrews, who appears to be, if not drunk, then mildly inebriated on the powers he’s handed himself and his police force during the crisis, want even more savage restrictions.

Already, business lobbyists are using recent falls in the rate of infection to call for an easing of restrictions. If those falls continue, and other countries begin to ease restrictions, we’ll hear a lot more, especially from business and economists, on why we should end the lockdown — even as countries that have been held up as exemplars of minimising infection rates either declare states of emergency or enter lockdown.

The question of removing restrictions will bring into greater focus the trade-off between health and economic outcomes. There’s been little challenge so far to governments plunging the economy into the deep freeze in order to protect the health and lives, primarily, of older people and those with existing health problems, and not much more objection to the government’s “whatever it takes” approach to keeping the economy on life support during lockdown.

But the lack of debate hasn’t changed the extent to which we’ve been engaged in a giant trade-off. Some of the economic damage that we’re now incurring would have happened anyway, regardless of what the government did, as China and the United States plunge into recession and take much of the global economy with them.

Even some of the spending by the government would also have been incurred — there were calls for some form of fiscal stimulus well before the pandemic arrived.

But if we only count the second and third stimulus packages, lost tax revenue from shuttered business and additional welfare payments, and ignore the loss to GDP of the lockdown (a contraction of 2.5% costs around $12.5 billion a quarter), we’ll be out of pocket by at least $250 billion at the federal level alone — and that doesn’t count the non-economic impacts of the lockdown either, like depression, suicide and family violence.

Will that have been worth it? What value a human life, after all? Isn’t it cold-hearted and churlish to wonder if we’re spending too much to save lives? Except, as Crikey has noted time and again, we do that all the time. We tolerate a level of death in the community because of our unwillingness to allocate resources away from one area of spending to another, because we understand that it’s about net community benefit, not looking at one problem in isolation.

The government even has a valuation of life that it tells policymakers to use in assessing the impact of policies they devise, which is currently about $4.9 million per life. Using that figure, the lockdown will have to have prevented over 50,000 deaths to deliver a net benefit.

Except, as Peter Singer and Michael Plant note in a discussion of this issue, many of those lives are of older people or of people with existing health conditions. A more accurate approach would therefore be to use a concept regularly used by health economists to assess disease and treatment impacts: quality-adjusted life years (QALY), which try to gauge how, and how good, the remaining life of a patient will be.

Given the age profile of those dying from COVID-19, such a calculation is likely to push the number of people we need to save to make the fiscal measures worthwhile up to a very high number indeed.

No policymaker has been thinking in such terms so far, at least not in Australia. Here, the focus has been on stopping the virus as quickly as people at whatever cost. But at what point do we lift the restrictions? That’s when such calculations will start to become important.

Doubtless there are some public health figures, representing the command-and-control mentality common to that profession, who’d prefer that the entire population was locked up until a vaccine was developed or the virus disappeared off the face of the earth.

But if we accept that’s an absurd position, we also accept that we risk people becoming infected and dying as a result of a decision to lift restrictions earlier. The earlier we lift them, the more likely we are to incur that cost of $4.9 million per life, or the QALY-equivalent, plus the costs to the healthcare system of taking care of them. There’ll be a crossover point when the estimated economic benefits of lifting restrictions start to outweigh the estimated costs in terms of lost life and healthcare of higher levels of infection.

Where that crossover point is depends both on how we model the economic impact of the lockdown — itself uncertain, given many of us are adjusting to life under lockdown by working from home and moving much of our production and consumption online — and how we model the path of the virus.

So far, the government — again, reflecting the infantilising mentality of public health figures and its medical advisers — has refused to share its modelling on the basis that it would scare people. It is only now, reluctantly and belatedly, moving to release some parts of it.

But without that modelling, there can be no informed debate of when it becomes a net benefit to Australia to start removing restrictions, and how we do it.

Peter Fray

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