billrider2013

• 

There have been a number of significant developments since my last post.

Tightening Border Controls

In Australia, as of the 25^th of March, all Australian citizens and permanent residents of other nationalities were restricted from travelling into the country from overseas. It was also announced that from 23.59 pm on the 28^th of March anyone entering Australia will be required quarantine themselves for 14 days.

Within Australia, restrictions on cross border movements between States are place with the exception of movements between NSW and Victoria.

High Profile Victims

On the 25^th  of March, it was announced that Prince Charles had tested positive for the virus. On the 27^th of March it was announced that the British Prime Minister, Boris Johnson had also tested positive to the virus.  It was also announced that Johnson would continue in this role of Prime Minister.

Poor Behaviour and Management in Australia

There have been some examples of some very poor behaviour and management in Australia in the face of the crisis.

There have been reports of Backpackers continuing to ignore the ‘social distancing’ guidelines.  This has particularly been the case in the Eastern Suburbs of Sydney, particularly in Bondi. 

I have experience an example of this type of behaviour  here in my hostel in Brisbane.  A group of German backpackers ignored those guidelines and held a party in their 6 bed room.  The rule is that there is a maximum of 2 people in any one room.  I understand there were over 10 people at this ‘party’.  Fortunately, management have taken the necessary action.

An example of very poor management was the control passengers arriving at the Sydney International Airport.  The people in the lines waiting to go through immigration and customs were crowded together.  They were obviously not observing the ‘physical separation’ rules.  This is of course is a worry.

What was also a worry was the reaction of the Australian Border Force (ABF) officials.  A spokesman said that the control of the lines was not the responsibility of the ABF. The Minister in charge of the ABF is Peter Dutton.  Anyone who has had any experience with the officers of the ABF will  likely haved noticed that it has a certain ‘culture’.  I suspect that having Dutton as its Minister does not help.

‘Stimulus’ Packages

As the crisis progresses, the governments around that world are trying to address the economic impact it is causing.  Obviously, the economic impacts are huge and unprecedented in living memory.  Already it is looking like the Great Depression of the 1930’s.

The governments are announcing ‘stimulus packages’.  These are taking various forms, but all involve the government’s throwing money at the economy. Examples include; cash payments to individuals, salary and wage support to businesses  for people who would otherwise have lost their job, access to unemployment benefits for those people that have lost their jobs, deferral of businesses taxes for those companies who are unable to operate in the current climate.

The costs of these packages are running in to billions of dollars, pounds and euros etc.  In the case of the USA the cost is already running into the Trillions of dollars.

I think the use of the word ‘Stimulus’ is misleading.  Where these packages have been used before, for example in the 2008 Global Financial Crisis (GFC), the circumstances were different.

In the GFC, consumers lost confidence and stopped consuming.  Goods and services were still available to be consumed and the challenge was to get consumers spending again.  The Labor Government in Australia implemented a significant ‘stimulus‘package.  The government was criticised for spending too much.  However, no one knows if it was too much.

One thing this is certain, Australia did not fall into a recession and the government avoided to the costs of significant a rise in unemployment with the attendant welfare expenditure and a drop in income tax and other tax revenue.

This situation is significantly different to the GFC.

The obvious big difference is that the ‘supply’ side of the economy was still in place in the GFC.  In this case that ‘supply’ side has been severely impacted.  Clearly, the production of some physical goods have been impacted.  For example, cars made in Italy.

However, the big impact is this crisis,  is on services.  For most rich economies, the ‘services’ sector is the largest part of the economy.  Industries like tourism and hospitality, entertainment and education are huge.   These industries have largely been ‘shutdown’.  It doesn’t matter how much money the government pumps into the economy, people are not going to buy services that are simply not on offer.

No one is going to restaurants.  No one is taking flights to holiday destinations. No one is going to the cinemas or theatres. No one id going to sporting events.  No one will be going to the 2020 Olympics. 

It doesn’t matter how much the governments pump into their economies, these industries are not going to recover until the virus is brought under control.

Politicians Found Wanting

Of no one will ever take the ‘dickhead’ crown off Donald J Trump.

However, in the lower league of Australian politics, Senator Mathias Corman aka the ‘Belgium Waffle’ is climbing up the ladder.

Just believe me.  Don’t even both to watch his performance on the ABC’s Insiders program this morning.