Australia's Squandered Pandemic Luck Bodes Ill for Its Future

For much of the past 18 months, living in Sydney while a pandemic has raged around the rest of the world has been such an undeserved blessing that I’ve felt almost embarrassed in conversation with overseas friends.

From May last year until a few weeks ago, life had been close to normal, beyond the usual routine of QR codes and closed international borders. Even face masks had largely disappeared. Less than five dozen cases of local transmission occurred in my home state of New South Wales this year until June 16, when a limousine driver carrying flight crew from the airport caught the delta variant. The outbreak that resulted has now infected more than 700 people, and brought Sydney to a standstill.

Australia's Squandered Pandemic Luck Bodes Ill for Its Future

Even as restrictions have tightened, cases keep rising, and the number whose source is so far unknown — more than 100, as of Tuesday — is starting to get to the point where contact tracers will struggle to keep a handle on things. While many parts of the world are emerging from a year of restrictions into glorious summer, Sydney is entering its winter of discontent.

What could have gone so wrong? The lessons are familiar ones for Australia. Our failure to heed warnings before it gets too late bodes poorly for the ability to navigate other complex global crises in the coming years, from China-U.S. rivalry and international migration to energy transition and climate change.

At first, Australia was blessed by its geography — a familiar situation for a country whose affluence is grounded in its mineral wealth. As the world’s most sparsely populated major economy (only Namibia and Mongolia have fewer people per square kilometer), it’s been remarkably easy to segment into discrete quarantine zones.

Unlike European nations, where some cities are bisected by international borders, or the U.S., where many straddle a tri-state point, Australia’s major urban areas sit in separate states, eight hours’ drive or more from their nearest neighbors. When an outbreak overwhelmed Melbourne and the surrounding Victoria state this time last year, but was prevented from spreading to New South Wales, my family was able to cross the border and holiday in tropical Queensland because Sydney was outside the danger zone.

As so often in Australia’s history, that geographical good fortune has come to breed callousness and complacency. More than 30,000 citizens have been stranded overseas and say they want to return. Technically, that’s been possible: The country had enough places in hotel quarantine to accommodate 6,370 arrivals a week. In practice, though, anyone unable to part with a five-figure sum to pay for flights and accommodation for each returning traveler is stuck.

The cases of those unable to travel overseas to visit dying relatives, or trapped in quarantine on returning here until it’s too late, have become legion. More than a year-and-a-half into the pandemic, federal and state governments are only now starting to take serious efforts to build dedicated Covid quarantine facilities to ease the pressure on hotels. For those with the money and the job flexibility to leap through the necessary hoops, Australia’s borders are more or less open. Everyone else is trapped.

Australia has always had a shameful record on its treatment of migrants, in spite of the fact that nearly half the population is now first- or second-generation immigrants, and a quarter have roots outside Europe. Those squalid instincts haven’t gone away. When India’s outbreak was at its worst in early May, the government banned all travel from the country, with the threat of jail for those who attempted to evade the rules. No such measures were extended for equally virulent epidemics in the U.S. and U.K. As Sydney’s outbreak started to spread, the first move from all sides of politics was to raise the drawbridge: Quarantine places, already insufficient, have now been cut in half. 

Australia's Squandered Pandemic Luck Bodes Ill for Its Future

It’s the complacency rather than the callousness that’s led to Sydney’s current problems, though. In contrast to the U.S., U.K., the European Union and Canada, which each secured agreements to at least half-a-dozen different vaccines, the government of Prime Minister Scott Morrison put far too many eggs in too few baskets. That's been compounded by the fact that the country still hasn't introduced the sort of no-fault compensation system that drug manufacturers depend on in most developed countries to protect themselves from lawsuits over vaccine side-effects, further reducing the pool of candidates.

The early success of virus suppression meant that this wasn’t treated as a concern until it was too late: Repeated opposition calls since last December to advance the vaccination schedule have been casually dismissed. Of Australia’s five vaccine agreements, one locally developed shot failed to pass clinical trials and another, by Novavax Inc., has only just completed them, while Moderna Inc. hasn’t yet applied for approval of its dose.

That’s left the country heavily dependent on AstraZeneca Plc. The 50 million doses being manufactured locally would be sufficient to cover almost the entire population of 25.8 million, but the rare cases of associated blood clotting caused the vaccines advisory body to recommend the Pfizer Inc. shot be used instead for everyone under 50 and, latterly, 60.

Unfortunately, there isn’t enough Pfizer to go around. Just 20 million doses will be available before October, with a further 20 million arriving in the last three months of the year. With case numbers now rising, officials have reversed their soft ban on under-60s getting AstraZeneca. Still, the messaging has been so confused and alarming that even those for whom it’s recommended have been saying they’re unwilling to take it. Barely a third of the adult population has had a first dose of either vaccine, with about 11% fully covered. Johnson & Johnson’s single-shot dose has been approved for use but, astonishingly, the government hasn’t even put in an order.

Australia's Squandered Pandemic Luck Bodes Ill for Its Future

The current crisis was entirely foreseeable, and indeed foreseen. With hardly any disease- or vaccine-acquired immunity, Australia is months behind other rich countries in its ability to handle a fresh outbreak. If Sydney’s lockdown measures don’t succeed — and even now, members of the state government have been chafing against them — the country faces a very grim few months until it finally has sufficient vaccine supplies to protect itself.

The government has at least been willing to spend the necessary funds to support the economy, with the announcement of an open-ended A$500 million ($372 million)-a-week package for Sydney on Tuesday just the latest example. That, along with the revenue from a river of iron ore flowing offshore to support China’s Covid stimulus, has helped ride out the worst effects of the pandemic. Among major developed economies, only South Korea, Ireland and Taiwan performed better last year.

The problem is what will happen with the next crisis, and the one after that. The failures that led to Australia’s current situation — a belief that its good fortune is born of merit rather than luck, an inability to plan for contingencies, a breezy confidence that something will turn up to save the day — don’t just apply to its handling of Covid-19.

An economy that’s been riding for two decades on the growth of a friendly and materials-hungry China is now faced with a more hostile partner that has cut off exports of a host of Australian commodities. The world’s largest fossil fuels exporter after Russia and Saudi Arabia is confronting a planet that’s cutting out carbon — most of all coal, where its export volumes have fallen around 10% in the past year alone. The twin lodestars of Australian diplomatic policy, Beijing and Washington, are increasingly impatient with both Canberra, and each other. Meanwhile, a nation whose economy has for centuries grown hand-in-hand with its burgeoning migrant population is closing its gates to the outside world.

In this pandemic, Australia may just survive its failure to develop a plan B. It won’t always be so lucky.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

©2021 Bloomberg L.P.

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