One man’s essential service is another man’s EBITDA
The COVID-19 pandemic has been especially challenging for governments around the globe because it requires two very different steps. Some leaders have risen to the challenge (Ardern, Merkel, Tsai Ing-wen of Taiwan), whereas others have unsurprisingly failed (Bolsonaro, Boris, Trump).
In Australia we have seen governments handle the lockdown reasonably well. The problem is, leaders who see their popularity rise seem to find it difficult to switch course. The unwillingness of South Australia, Western Australia and Queensland to open their borders up domestically (despite relying significantly on tourism) is one such example.
Dan Andrews’ Victoria appears to be the poster child of letting popularity guide decision-making. Victoria has belatedly re-allowed outdoor activities like golf and fishing last week, while some school children will have to wait until June 9 to get back to the classroom. By contrast, shopping malls remained open, and the source of Australia’s largest home-grown outbreak, Cedar Meats, was allowed to operate for a month after its first case was detected in early April.
The Cedar Meats cluster also raises the uncomfortable question of what exactly is an essential business? Schools and restaurants are essential, but in order to minimise potential infection, they were forced to shut. However, meat packing plants were allowed to remain fully open, despite their far higher risk. The Guardian has reported that “at least 12 of the 25 hotspots in the US — counties with the highest per-capita infection rates — originated in meat factories where employees work side by side in cramped conditions”.
The obvious counter argument is that meat is essential, so meat plants, regardless of the very significant risk of infection they cause, should remain open. The problem? Meat plants like Cedar export some if not the majority of what they produce (The Guardian noted that Australia exports 60% of the meat it produces, and Cedar is likely to sell more globally as it’s a leading halal producer).
Cedar’s website claimed “upgrading to a state-of-the-art meat export premises has provided the capacity to slaughter, process, package, freeze/chill and transport around 10,000 units per day. This allows quality products to be exported to all corners of the globe” and “we currently hold licenses to export to all destinations worldwide, including European Union, North and South America, South East Asia, China, Middle East and Africa”.
Cedar remaining open wasn’t essential to Australia, it was essential to its owners making as much money as possible.
So much for a second wave
The constant refrain made against a quick reopening of the economy is that it will be hit by a “second wave” of cases. People making those predictions don’t seem to be basing that view on any real observed fact. Germany, Denmark and Switzerland took steps to ease restrictions in late April and early May and have yet to be hit by a resurgence of cases.
The one real instance of a second wave occurring was Singapore, but that was largely contained to cramped foreign worker dormitories. However, Singaporeans were warning of dormitory outbreaks early on, so that was less a second wave and more a failure to properly handle the lockdown in the first place.
Australia now has excellent testing facilities (virtually anyone who wants a test can easily get one) — as we noted, this was not the case back in early April. Contact tracing, while not as comprehensive as South Korea or Taiwan, has also been improved.
National Health Minister Dan Tehan announced something of a mea culpa over the weekend, noting that the government will end the free giveaway to rich parents on June 28.
With every week that passes, the true calamity of the free childcare policy becomes more apparent. First there was the $1.6 billion price tag and risk being imposed on low-paid childcare workers. Then it was revealed that well-run centres would actually be far worse off due to the complex way in which the policy was formulated.
But that monstrous stupidity aside, an even worse unconsidered effect of the policy is coming to light. Many parents who want to return to work, like first-time mothers returning from maternity leave, are unable to get a spot for their child. So people who wanted to return to the workforce, and were happy to pay, are now forced to delay working.
Crikey has even heard of essential government workers, who were initially reluctant to send their kids back to childcare early in the pandemic, now being refused their pre-existing place due to lower capacity limits.
The government created an expensive policy which allows millionaires from Vaucluse and Brighton to get free child care, and stops desperate mothers returning to work. Good one, Scott.