Do we actually need so many cafes, nail salons and hairdressers?
Shuttered small businesses should use this enforced downtime to take a good hard look at themselves.
In many cases the current coronavirus crisis is only exacerbating, not causing, their future collapse. Just ask any overworked accountant at the moment.
Now I know it’s almost un-Australian to criticise the “engine room of the economy”; the 2.2 million small enterprises which employ almost half our workforce.
While government, banks and employees are all keen to do everything to ensure all businesses can snap back, not all can or should.
The hospitality sector, for example, had continuously argued that they were on such low margins that they could not even afford to pay their workers the correct wages.
“Too high, too complex,” they argued. Well now they have plenty of time to catch up on the correct awards and check the books to see what they should be paying and, more crucially, if they can afford to pay it.
Some greedy landlords might be on the back foot for the moment, but they will eventually return to their bad old ways of hiking rents and letting tenants close.
In the new economic order maybe we have to question whether we really need so many cafes, restaurants, hairdressers, massage therapists, nail salons and the like.
And we definitely have to wonder just how many eyebrow shaping salons our population can sustain.
The move to these service industries came at the expense of brick and mortar shops. Small and large, they were already suffering a retail apocalypse before the current health crisis or the earlier bushfire crisis.
After this enforced isolation that downturn will only escalate.
Pity the poor frock shops. What on earth will happen to an entire season’s worth of fashion that was not worn and will be dated by the time they reopen?
When I started The Small Business Show on the Nine Network 25 years ago, the huge number of struggling hairdressers was a regular feature.
Their inability to attract workers has only worsened and the same problem persists. Just because you are handy with a pair of scissors does not mean you can open and run your own establishment successfully.
God forbid we should admit that not everyone is cut out to run their own business; that the dream of being our own boss can in fact be a nightmare.
Traditionally some 60% of all small businesses are estimated to fail within the first three years and we don’t want that number escalating.
When a local cafe near me announced its accountant had advised it to close at the outset of the crisis, I encouraged neighbours to shops at stores they wanted to see survive at the end of this.
But despite all the current goodwill it is not clear just how much consumers are willing to pay to support their local businesses.
The Made In Australia campaign was a prime example of shoppers claiming they would prefer to buy home grown produce while in reality opting for the cheapest option even if it was sourced offshore.
Nowhere will this be crystalised more than in one of the hardest hit and over serviced sectors: restaurants.
This week Restaurant and Catering Australia CEO Wes Lambert said he held fears for 25% of the 47,000 odd restaurants nationwide, leading to the headline in the Good Food section that “12,000 restaurants may shut for good”.
Fewer restaurants means less competition and higher prices, a similar argument to the one playing out in the airline sector.
Just like the small businesses themselves, we’ll all have to do the sums and work out just who we can afford to save in the new economy.
Inevitably new business will be created to replace those that are lost and the jobs that go with them. Hopefully not all will be in the low paying gig economy.
Who are Australia’s essential workers? Short answer: women
For decades women have fought to be equals in the workforce. Now they are emerging as Australia’s most essential workers.
But as new job figures show, they might also be shouldering most of the economic fallout.
Women are on the frontline in the war against coronavirus: fitting ventilators in hospitals, educating vulnerable children and helping stack supermarket shelves.
As the economic shutdown allows only the most essential workers to continue, it is predominantly women — despite being paid less on average than men — who have been left doing these important jobs.
The hard numbers reveal women dominate industries such as healthcare, education and food retailing, which are powering on as much of the economy grinds to a halt. As a consequence, women are disproportionately represented on the frontline of the pandemic.
Almost 80% of healthcare and social assistance workers are women, including nurses, doctors and hospital support staff. Aged-care workers are in the highest risk environments and have the biggest proportion of female employment at 95%. They are also much more likely to be part-time, lower paid and casual.
“It really does highlight how our workforce, particularly these service sectors, are so dependent on women,” Cherelle Murphy, a senior economist with ANZ, said.
“Without women they simply wouldn’t operate.”
Around the world, societies are depending on women more than ever to get through the chaos of COVID-19.
In the United States, the New York Times reports one in three jobs held by women has been deemed essential.
In Australia, there is no official list of who is essential and who is not. Prime Minister Scott Morrison has said an essential worker is anyone who has a job.
Yet almost all the industries operating at capacity now — except mining and manufacturing — are dominated by female workers.
Women are over-represented in education, making up 72% of teachers and childcare workers. They are still heading into work, or preparing to be the first to return.
There are many other jobs at the frontline of this crisis. Supermarket and pharmacy staff also show up to work and keep food and medicine on shelves. They are also more likely to be women; 60% of all retail sales staff are female.
But as emerging job figures reveal, there is another side of the crisis where women appear to be over-represented. Data published by the ABS on Tuesday reveal that women, particularly young women, have been more likely to lose their jobs in the past few weeks.
Economists say this is because the JobKeeper scheme does not cover casual workers who have been employed for less than 12 months, most of whom are young women.
“The job cuts and wage cuts for the week ending April 4 were bigger for women than men. It’s really a different scenario,” Murphy said.
“You’ve got the healthcare sector absolutely in demand, social assistance, aged care, childcare, but you’ve also got a whole lot of women at the other end losing their jobs. “
Another thing affecting women is unpaid home labour – this has increased because many children are being home-schooled. And as Murphy notes, as 72% of Australia’s primary carers are women, if anyone drops out of the workforce to care for others, they are more likely to be female.
Australian Nursing and Midwifery Federation’s federal secretary Annie Butler says it is a bitter pill to swallow when the crisis has revealed the critical role female workers play in Australia’s economy.
“These are the people that we can’t do without,” Butler said. “Until it’s demonstrated to us by a crisis, we chose to ignore how valuable those workforces actually are.”
Are we seeding a flu crisis later in the year? Looks like we might be
Our influenza vaccination clinics have gone nuts. At a recent one we administered over 70 flu shots to young and old, to sick and healthy alike. Not surprisingly, stocks are low, but still the people flock in. Demand has been unprecedented (sorry, promise I’ll never use that word again).
Last year people were told to wait until later in the season before being vaccinated. The flu season often peaks around August/September, and we know that immunity from the vaccine can fade after a few months. So vaccinating in, say, April, risked leaving people vulnerable four to five months later.
This year the advice has been different — we’ve been telling people to get in early. COVID-19 is bad enough. COVID 19 plus flu could be much worse. Hence the flocks
Call me sheepish, but I have a nasty feeling we may have got this one all wrong.
We are currently using extreme social distancing measures to reduce the spread of COVID-19. It seems to be working, with the curve bending or flattening or anyway doing something more desirable than shooting straight up. And this is with a virus that is already here, and is more infectious than the flu.
If social distancing works for something as easily spread as COVID-19, it is going to be even more effective with a less infectious agent like the flu virus. This was shown in the 1918 flu epidemic, when one of the most effective measures that reduced the spread of flu was social distancing.
There are already indications this is happening. January and February had higher numbers of flu cases than average years, but the curve is showing early signs of flattening and even dropping.
In other words, the societal measures we are taking for COVID-19 are at least as effective at reducing the flu risk. Yet we are vaccinating the hordes at a time that, I now believe, may be the least necessary.
My worst-case scenario? September arrives, COVID-19 is relatively contained and social distancing measures start being relaxed. The flu virus emerges, immunity from vaccination five months previously has waned and we now have a flu crisis.
COVID-19 has so far killed under 100 Australians. In the nasty flu outbreak of 2017, 1255 died.
As the photo below shows, the other day I bravely went for my flu shot. I’m beginning to wish I’d waited.
One possible solution would be a booster round of flu shots in a few months’ time, but is the government really going to fund this? I suspect not, even if we could persuade people to roll up their sleeves a second time around.
So amidst the hysteria of patients wanting flu vaccination ASAP, I’m considering advising them to hasten slowly. Social distancing is helping keep them safe now, vaccination will help keep them safer later.
Nick Carr is a Melbourne-based GP, author and broadcaster.
What should governments do to protect jobs and incomes, now and in the future?
The COVID-19 crisis is changing the way we live and how our economy works, and that looks set to be the case for an extended period. The crisis also requires new thinking about the role of the state in a liberal democracy.
We are already seeing new experiments to refashion liberalism — often in surprising ways that transcend traditional ideological divides.
We have seen a conservative government in the United Kingdom provide an 80% wage subsidy to private-sector firms up to a relatively generous cap.
We have seen a conservative government in Australia — one that has made scolding over “debt and deficits” the centerpiece of its political brand —providing a $130 billion wage-subsidy package.
And it has even worked cooperatively with the Australian Council of Trade Unions to fashion the JobKeeper package and to make changes to workplace laws.
Those measures are likely to be temporary, but even once a vaccine is widely deployed and this particular crisis is over there will no doubt be pressure to redesign for the 21st century the liberal economic model of the last 30 or so years.
Two broad options around work have already been discussed in light of globalisation and automation: a universal basic income (UBI) and a jobs guarantee. The COVID-19 pandemic has further highlighted how fragile work can be in a radically interconnected world.
The wage subsidies that are part of packages in the UK, Australia, the United States and a number of western European countries are not UBIs in the traditional sense. They are generally more targeted at specific workers in specific firms hit hardest by the pandemic.
But they are wage-replacement schemes.
Spain has already announced that it intends to enact a true UBI after the crisis, with their minister for economic affairs stating, “We’re going to do it as soon as possible. So it can be useful, not just for this extraordinary situation, and that it remains forever.”
It’s too early to know what that might look like, but may get some idea from similar pitches — such as 2020 Democratic primary contender Andrew Yang’s plan to provide every American (including the very wealthy) with a US$12,000 per annum “Freedom Dividend”.
A jobs guarantee, by contrast, would involve the government ensuring that there was meaningful and productive work for anyone capable of performing it.
That might involve work on government-led infrastructure projects, environmental remediation like cleaning up beaches and waterways, or a range of other socially productive uses of labour. Programs like this formed a key part of the US government’s response to the Great Depression, the New Deal, through the Works Progress Administration.
It is important to distinguish between what is a good policy response during the crisis, and what will make for good policy after the crisis.
Right now, replacing income is key. This pandemic is an economic challenge the likes of which we have not seen in the modern economic era. The 2008 financial crisis involved large demand shocks. People didn’t want to spend money and that meant others didn’t want to produce, which gave them less money to spend, creating a vicious downward spiral in economic activity.
It also involved a massive disruption to the proper functioning of financial markets. The Great Depression had similar features.
The COVID-19 crisis involves both demand shocks (like those of 2008 and 1929) and supply shocks. Significant parts of most economies have shut down either by government mandate (think restaurants, tourism, or sporting and cultural events) or because people understand that close physical contact is too risky.
Worse still, these supply shocks can spill over into demand shocks as a recent paper by four leading economists shows (see what an academic presentation during a lockdown looks like). The correct policy response is something like the UK government’s wage replacement scheme. The Australian scheme is directionally correct, but too small.
A jobs guarantee would make little sense right now because we want people not to work in many circumstances, to prevent the spread of the virus.
One thing that wage replacement in the present crisis shows is how expensive a UBI would be. The UBI Center (a think tank that provides open-source tools that allows one to assess various UBI proposals) calculated the cost of Andrew Yang’s “Freedom Dividend” as being US$2.8 trillion per annum, based on the 236 million adult citizens in the US. That’s more than the entire federal budget. Even a relatively modest, say, AU$20,000 a year UBI in Australia would be more than our total budget.
A UBI that is truly universal is prohibitively expensive. So, while wage subsidies that have elements of its features are right during the COVID-19 crisis they won’t be affordable afterwards. In addition, a UBI in normal times does not provide the meaning, sense of purpose, and social connections that a job does.
In short, a job is about more than a pay cheque.
Post crisis we are better served by a jobs guarantee. This still involves a fairly dramatic rethinking of liberal economic orthodoxy, but automation, globalisation, and the possibility of another pandemic make it an important and necessary change.
If the income generated by a job in a jobs guarantee program were, say, 90% of the minimum wage (in a country with a reasonable minimum wage like Australia), then it would encourage the private sector to keep people where possible, but create meaningful alternative options for those who can’t find work. Long-term, that’s a better plan.
The other great long-term challenge that we face — one that will still be there post crisis — is how to address climate change in a meaningful way.
We have advocated for some time now the Australian Carbon Dividend Plan, where a $50 per tonne tax is placed on carbon emissions and all of the money generated is returned evenly on a per-capita basis to all voting-age Australian citizens. That would put $1300 per annum into the pockets of every such person.
Now that is meant to compensate for the increased costs of goods and services because of the carbon tax while preserving incentives for behavioural change, but the average household would still be $585 a year better off after the price increases.
And because the dividend is the same for all citizens, those at the lower-end of the income distribution do even better on net — $1,305 a year better off for the bottom 20% of households. If they lower their carbon footprint they would do better still.
That’s a relatively small basic income relative to, say, Yang’s Freedom Dividend. But it does address the other pressing challenge of our time, climate change, which has understandably received less attention during the pandemic.
Right now, replacing people’s incomes is critical to ameliorating the devastating economic effects of the COVID-19 crisis. But when the crisis has passed, income replacement of various kinds — especially a UBI — will no longer be the appropriate policy.
But the crisis and the government’s response will likely prompt new thinking about the role of the state in a liberal democracy.
Some of that thinking has to be about how best to get through the pandemic and its economic aftershocks — and in that case largescale wage-replacement, or even some form of semi-universal basic income, seems like the most effective and appropriate response.
But some of it needs to be future-oriented, and focused on a post-pandemic world.
And in that world, a jobs guarantee and a carbon dividend are two new things that governments could do to protect the economically vulnerable — and the planet — in ways that are truly sustainable.
Rosalind Dixon is a professor of law and director of the Gilbert +Tobin Centre of Public law. Richard Holden is a professor of economics at UNSW Sydney.
The cost of our lives: when do we relax lockdown, why and at what price?
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.
How long before a vaccine is ready? Scientists are racing for the good of all mankind
Predicting when a COVID-19 vaccine will be developed, licensed, and manufactured at a global scale is, frankly, a mug’s game. The shortest predicted timeframe — that it may be ready within 12 months of the mid-January release of the virus genome by Chinese researchers — would be an unprecedented achievement.
To put it in perspective, the HPV vaccine took 15 years.
During the Zika outbreak in 2015, a vaccine was ready for testing after about seven months, but the epidemic slowed before an approved vaccine got to clinical trials. Likewise, attempts to develop vaccines for severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS) were shelved when those outbreaks where contained.
But this crisis represents something new. Here are some of the local and international efforts, and where they’re at.
Flinders say they’re “closing in” on a vaccine. Flinders University Professor Nikolai Petrovsky told Crikey his team’s target was to have a vaccine in human trials as soon as they had the animal testing results in six to eight weeks time.
“The commonly quoted 12-18 month timeframe is in respect of highly experimental vaccines that have not been previously extensively tested in humans,” he said.
Petrovsky said as soon as the genomic sequence of COVID-19 became available in January, his team used this, “combined with our previous experience in developing a SARS coronavirus vaccine” to characterise the key viral attachment molecule called the spike protein.
Though he stressed expectations should be realistic until all testing is completed, Petrovsky said that, with the right government support, he was confident that a vaccine could be “developed extremely rapidly and in humans before the end of this year”.
He said the team had built a pandemic vaccine platform over roughly the last 15 years that was designed to be “plug and play”.
“We have extensively tested this plug and play pandemic vaccine platform in multiple human studies and shown it to be effective and safe including against various strains of bird and swine flu. We also showed it was effective against SARS coronavirus in animal studies,” he said.
“So the reason we can be so fast versus other groups out there is we just needed to swap in the sequence for the COVID-19 attachment protein into our vaccine and start manufacturing it.”
Moderna Therapeutics, a biotech company based in Boston, has shipped the first batches of its COVID-19 vaccine. The first vials were sent to the National Institute of Allergy and Infectious Diseases, which will ready the vaccine for human testing as early as this month.
The United States and China are leading the charge to develop a vaccine, a kind of 21st century Space Race. A day after Moderna got approval, CanSino, a Chinese biotech working with the country’s Academy of Military Medical Science announced it was also proceeding to human clinical trials.
CanSino said it had already got positive results testing its vaccine on animals. Human testing will continue for the rest of the year.
CSIRO scientists have begun work on testing for a potential vaccine to coronavirus.
The testing will be carried out at the Australian Animal Health Laboratory (on ferrets, who contract the virus in the same way as humans) in Geelong and is expected to take three months.
CSIRO’s director of health Rob Grenfell told Reuters his team were working at a “remarkable” pace, reaching the pre-clinical testing stage — which usually takes up to two year — in about eight weeks.
However he was sticking to the 18-month time frame for developing and delivering a vaccine to the public.
British American Tobacco
In “why the fuck not, it’s 2020” news: British American Tobacco (BAT) has announced that its US biotech subsidiary, Kentucky BioProcessing, has moved to pre-clinical testing for a tobacco plant-based vaccine.
While stressing it is in the early stages of development, BAT has said it could produce up to three million COVID-19 vaccines weekly by June — as long as it receives government support and can form partnerships with other researchers.
We’re sure the research has nothing to do with keeping their customers, which the virus appears to be wiping out even faster that the rest of us.
The University of Queensland
UQ was working with the Coalition for Epidemic Preparedness Innovations (CEPI) way back in January 2019, preparing vaccines to stop (what was then) the world’s next epidemic (and is now just life).
Unsurprisingly, it has recently gotten a funding bump from both state and federal government, to the tune of $17 million. UQ is pushing to start clinical trials by July, and says the extra money could help it shave up to six months off the development time frame.
Also at UQ, researchers are set to begin clinical trials of a potential treatment for COVID-19 using existing drugs for the treatment of HIV and malaria.
However, UQ Centre for Clinical Research director David Paterson was forced to issue an import clarification: “I have never suggested these drugs be used before a trial establishes their efficacy. Unfortunately, my comments have on some occasions been used out of context … I do not support the stockpiling of these drugs.”
Scientists at Monash University and the Peter Doherty Institute say they’ve found that an existing anti-parasitic drug — Ivermectin, used to treat viruses such as HIV, dengue, influenza and Zika — also kills the coronavirus in test tubes in 48 hours.
“Ivermectin is very widely used and seen as a safe drug. We need to figure out now whether the dosage you can use it at in humans will be effective — that’s the next step,” Dr Kylie Wagstaff, who led the study, told the Australian Financial Review.
“In times when we’re having a global pandemic and there isn’t an approved treatment, if we had a compound that was already available around the world, then that might help people sooner.”
Monash is still seeking funding for pre-clinical testing and clinical trials, making a time frame impossible to nail down. But according to Wagstaff “realistically, it’s going to be a while before a vaccine is broadly available”.
It’s not just China, Western Europe and America working on vaccines. OncoGen, a research centre based in the Romanian city of Timisoara, began trialling a vaccine in March.
While the country does not usually produce vaccines due to a lack of resources, researchers say they’re hoping their efforts show they “stand shoulder to shoulder” with their colleagues across the world.
Will Australia consciously uncouple from China?
One potential side-effect of the global coronavirus pandemic: Australia could see a historic reversal of its closeness with China.
As the pandemic continues, and even beyond that, we can expect policies favouring domestic manufacturing to be viewed far more sympathetically than they have for years. Our factories are all in China now and this offshore manufacturing of essential goods is starting to look reckless.
At the same time, global travel has screeched to a halt. The increasingly large flows of people between Australia and China have stopped. Will they recover?
It seems likely to be a long time before international jaunts become so easy and abundant as they were in 2019, and we may have to make do with a much smaller contribution from one of our biggest tourism partners.
But it’s not just these practical aspects of the pandemic that are driving China and Australia apart. There is a political aspect too.
China’s government has brought criticism on itself for failing to eliminate the wildlife markets where the virus first jumped to humans; and then for under-reporting viral spread.
These failures of Chinese governance should be prosecuted in multilateral and bilateral discussions. But they are also fuelling popular anti-Chinese sentiment.
China’s state apparatus deserves a good deal of criticism. It is an anti-democratic authoritarian regime that is slowly oppressing Hong Kong, imprisoning Uighurs in frightful “re-education camps”, building a cult of personality around Xi Jinping, and playing dangerous games of brinksmanship in the South China Sea.
We must take that into account when making foreign policy. But a popular upsurge of anti-China sentiment is a dangerous thing.
We have seen unsubstantiated rumours of “busloads of Asians” stripping supermarkets, and criticism in the Nine papers of businesses for sending medical supplies to China when it was the epicentre of the pandemic. There is even a wild petition on Change.org calling for the government to check every shipping container bound for China “and remove everything to do with groceries”.
That might sound crazy, but at the same time the Australian government has changed the law to permit five years jail time for anyone exporting hand sanitiser.
We are a small country and a trading nation. We are not America. Trade wars are likely to rebound and hit us hard. Ask dairy farmers if they’d like China to stop buying their milk powder.
The general upswing in negative sentiment towards China makes life very hard for Asian people in Australia. Around 2% of Australia’s population was born in China, and there are many more second- and third-generation migrants on top of that. Racial discrimination against this substantial group (and others) is already being reported.
Negative sentiment also increases the chance of a breakdown in geopolitics. People on Twitter are calling on their governments to #NukeChina and, while that won’t happen, the chance of a skirmish in the South China Sea is heightened when Sinophobia is peaking.
This should frighten us all. Any conflict over Taiwan, or other islets in the region is going to pose an enormous problem for Australia. Not so much because we will be torn between our old ally and our new trading partner. But because we will certainly choose democratic values over dollars and suffer economically.
For these reasons, we must engage constructively with China, while keeping racism out of the discourse and resisting knee-jerk reactions against trade.
Decoupling from China is a wise idea, but it must be done in a way that protects Chinese-Australians and avoids immiserating us all.
Will big companies use COVID-19 to dodge tricky AGMs?
In this time of lock-downs and social distancing, how should big public companies conduct their annual general meetings (AGMs)? Are shareholders allowed to turn up and will there be any scrutiny of the board or will directors take the opportunity to shut down debate?
There are a range of big companies with December 31 balance dates which are scheduled to hold their AGMs over the next few weeks. Indeed it started yesterday with construction giant CIMIC, the old Leighton Holdings, which webcast its 45-minute AGM from its North Sydney office.
There was one written question on gender equality submitted before the CIMIC meeting which the acting chairman duly read out. He then paused the meeting so that shareholders in attendance could write down their questions and give them to an attendant, after which the board would go into a huddle and come up with a response.
Unsurprisingly, there were no questions during the meeting, presumably because barely any shareholders turned up, although they weren’t actually banned. There was no ability to ask online questions during the gathering, either written or oral.
CIMIC is one of the most issues-rich companies on the market given controversies such as the Casey council scandal, terminated construction contracts with Transurban over the West Gate Tunnel and ongoing attempts by the Spanish parent ACS/Hochtief to increase its control over the company, which has involved buyback and creeping transactions worth more than $200 million over the past two weeks.
Sadly, none of this was canvassed yesterday.
ASIC released an update last month giving December 31 balance day companies a two-month extension until July 31 to hold their AGM whilst also encouraging the embrace of appropriate technology. The Brisbane Broncos which, bizarrely, is an NRL team trading as a public company controlled by News Corp, last week opted to delay, but most of the big players are soldiering on as follows:
- April 3: Santos in Adelaide — see notice of meeting.
- April 8: Scentre Group in Sydney — see notice of meeting.
- April 30: Woodside in Perth — see notice of meeting.
- May 7: Rio Tinto in Brisbane — see notice of meeting.
- May 8: AMP in Sydney — see notice of meeting.
- May 13: GPT in Sydney — see date announcement.
- May 19: Atlas Alteria in Melbourne — see date announcement.
- May 20: Alumina in Melbourne — see date announcement.
Sydney Airport is the only major company scheduled to hold an AGM in April or May yet to reveal its hand.
After the disappointing effort by CIMIC yesterday — where there were heavy protests by independent shareholders against the three Spanish directors up for election but no debate or commentary about this — the pressure is on oil and gas giant Santos to deliver a more interactive gathering tomorrow.
The Santos meeting is important because it is facing some hostile shareholder resolutions on climate issues which have been unusually embraced by most of the powerful proxy advisory firms, as The Age noted earlier this week.
Indeed, the proposal for Santos for better to disclose its carbon targets is tipped to receive as much as 40% voting support.
In a positive sign, Santos released a statement on March 23 saying shareholders could no longer attend the meeting but “the live webcast will include the facility for shareholders to ask questions in relation to the business of the meeting”.
However, as explained on the Santos website, shareholders will have to pre-register and then type out their written question during the meeting. There will be no throwing to a shareholder to ask an oral question, like you could do on any conference call.
It also looks like the sponsors of the shareholder motions, including the Australasian Centre for Corporate Responsibility (ACCR), won’t be able to speak to their motions and Santos will have no obligation to read out their pre-submitted questions to the meeting or allow any follow up based on the answers provided.
Companies need to remember that S250S of the Corporations Act requires shareholders to be given a reasonable opportunity to ask questions during an AGM.
Investment banking analysts are being given regular opportunities to ask CEOs live, unscripted questions on conference calls — Transurban did one yesterday and Woodside did one last Friday, even producing this 10-page transcript of the debate.
If companies are worried about too many shareholders wanting to speak, they could just limit it to six to eight pre-registered speakers, such as the Australian Shareholders’ Association, the ACCR and a small number of shareholders who express interest and pre-register.
Companies such as Westfield owner Scentre Group have been particularly taciturn during the COVID-19 crisis, issuing very brief updates. Indeed, as this list shows, about 30 of the ASX100 companies are still yet to make any update to the ASX about the impact of the virus.
So when Scentre Group has its AGM in Sydney on April 8, it should include an ability for shareholders to ask unscripted questions over the phone to extract more information on the battles with tenants and the like.
The technology is there and the law requires it, so just do it.
What can Australia learn from New Zealand’s coronavirus modelling?
Following some spectacular question-dodging by Prime Minister Scott Morrison, deputy chief medical officer Paul Kelly announced modelling on Australian coronavirus cases would be “unlocked” later this week.
New Zealand’s modelling has already been released, with one report thanking “our Australian colleagues for their valuable work in providing modelling data on numbers of infected cases for different scenarios”.
But researchers say while estimated case rates match other modelling, New Zealand’s modelling is preliminary at best and excludes a number of necessary variables to be applied to Australia.
In their “plan for” scenario, 65% of New Zealand’s population would be infected, with 34% of the population developing symptoms. Deaths would range from between 12,600 to 33,600 people.
Tom Kompas, a foundation director of the Australian Centre for Biosecurity and Environmental Economics and chief investigator in the Centre of Excellence for Biosecurity Risk Analysis, told Crikey the modelling needed more data and variables.
“It uses a basic supervision risk and intensity model,” he said. “As more data comes in, you can make it more elaborate.”
But where it currently stands, Kompas said, lacks depth.
“The way in which you validate parameters and infectious diseases change results if you don’t have the data,” he said.
Frustrated with the secrecy from the government, Kompas is currently working with a team to develop a model applicable to Australia.
“Ours is a bit more comprehensive,” he said. It uses publicly-available data and is set to be released within the coming days.
Dr Mahmoud Elkhodr, information communication technology lecturer at Central Queensland University has previously used artificial intelliegence (AI) predictive analysis to model coronavirus spread. He told Crikey it was difficult to apply New Zealand’s modelling to Australia.
“Is it applicable? Impossible to tell … there are a lot of variables involved. Some were not even considered in the report.”
Transmission sources, he said, were a key driver in Australian cases, with those arriving from overseas isolated. Border controls are mentioned in one New Zealand model, though it focuses on travel restrictions over quarantine.
Similarly, there’s little modelling on what effect introducing new medicines or vaccines, and when, would have on the ICU rate. Australia’s rate of testing is significantly higher than New Zealand’s too, which would also effect the model, Elkhodr said.
“The next two weeks are very crucial in determining where we are heading. We will either follow the UK curve and US curve — the worst-case scenario, which is very unlikely — or South Korea’s curve — the best-case scenario. The next few days will determine the path we are taking.”
Ben Phillips, associate professor in ecology and evolutionary biology at the University of Melbourne, had developed an app to model the spread of coronavirus. He told Crikey forecasting the spread was difficult but important.
“The key question right now is how public health measures affect the rate of the virus … This week will be a massive decider,” he said.
Phillips stressed the importance of the government releasing data and modelling.
“It facilitates researchers being able to help … not releasing it limits the capacity for people to collaborate,” he said.
Expert, the mob or gifted amateur — who should you listen to in a crisis?
Who should you listen to in a crisis? Had you asked me this in 2019, I’d have given a simple answer. Listen to the experts, I would have said.
But in 2020, the world is much more complicated. The pandemic has fractured a lot of long-held beliefs. Among them is the idea that the right information will come from the establishment sources.
We are finding ourselves amid a flurry of amateur communication that might be evidence of the death of the expert, or perhaps, if you’re feeling optimistic, might be a sign of the democratisation of expertise.
A clarion call
The best example of the elevation of the amateur is an article written on March 10, titled “Coronavirus: Why You Must Act Now“.
This article became a turning point in the fight against the virus. It was technical but accessible, and extremely persuasive. It has been read tens of millions of times, shared by all sorts of people in all sorts of forums, and translated into dozens of languages. You likely already read it.
It includes a few forecasts that have been shown to be imperfect, but it is fair to say the article was very good. It was also a big part of the call to action the world needed, at the exact right time.
March 10 might sound extremely recent, but it was another era. There were only 40,000 cases of coronavirus outside China. Australia had just 92 cases and the US under 1000.
On March 10, nothing much was locked down and no stimulus packages had been announced. While stock markets had begun to wobble and toilet paper was growing scarcer, football seasons were still planned, complete with crowds. Prime Minister Scott Morrison hadn’t even announced his intent to attend the rugby, let alone backed down. The WHO still classified the outbreak as a local epidemic, not a global pandemic.
So March 10 was a pivotal moment crying out for such an article. Its rapid spread helped solidify the public support for strong action. After reading it myself, I looked into the credentials of the author, a young man named Tomas Pueyo.
Isn’t this kind of weird? I found myself thinking, because Tomas Pueyo is not a doctor. He is not an epidemiologist either. He is the author of a self-published book about the Star Wars movies, a former employee of the casual gaming company Zynga, and a quintessential tech-bro, complete with Stanford degree.
Shouldn’t we be listening to epidemiologists at this time? Not silicon valley dudes? I asked myself.
But I couldn’t entirely commit to this line of criticism. I was unable to dismiss Pueyo on his lack of credentials alone, because his work, it seemed, was an extremely valuable voice of reason.
Everyone is putting their oar in
Pueyo was not the only non-expert pushing the world to take action against the coronavirus.
Here in Australia, the Grattan Institute has been vigorous in its calls for action against the virus. Is the Grattan Institute a public health think tank? It is not. Grattan CEO John Daley is a former McKinsey consultant and banker. That hasn’t stopped him from publishing a searing call to action, demanding we shut down the economy. (Economists are famous for dabbling in policy, even where they might not be welcome.)
In the US, Bloomberg Opinion columnist Noah Smith (also an economist) has been extremely motivated in pushing the US to do more testing. Which is frankly a very good idea.
So where are the experts?
Why are these voices gaining attention ahead of the world’s public health experts? Why are we amplifying them? Is it as simple as anti-intellectualism, or the fetishisation of economists? I have three theories for why true public health experts are barely making a dint in the marketplace of ideas.
One is about labour markets.
The problem is probably not that the world is listening to a tech-bro like Pueyo. The problem is we live in an economy where a guy as gifted at analysis and communication as Pueyo ends up working in Silicon Valley, optimising Angry Birds. Silicon Valley can pay people many hundreds of thousands of dollars a year, plus stock options. The WHO, meanwhile, offers public servant pay.
The second theory is about raw numbers. There are hundreds of thousands more economists, pundits and tech-bros in the world than there are epidemiologists. Even if every epidemiologist wrote a blog post advocating for urgent action, the odds of one of them striking the right notes that create virality would be low. Others can take the same messages the public health experts wish to convey and shape them into more compelling forms.
The third theory is more concerning: that public health epidemiologists are not free to say what they think. For example, the chief medical officer of Australia comes out and stands next to the prime minister at a press conference, and their messages are the same. The PM claims Australia’s policy directives are based on medical advice.
But how can that be? Surely advice aimed at optimising health outcomes — minimising viral spread — must be tempered with political and economic perspectives. But it need not be if the health policy experts are politically captured and the medical advice is toned down to be more politically acceptable. Public servants everywhere must serve their masters.
Likewise, the WHO is beholden to its member countries, some of whom are very powerful.
In this way of looking at the world, the messages we are getting from outside the world’s health bureaucracies are being shared not just because they are catchier, but because they are purer. Non-experts are free to say what they truly believe without fear. And it is fearless messages we need most at this time.