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Warning of Economic Crisis, Australia Avoids Full Virus Lockdown

Prime Minister Scott Morrison is trying to thread the needle as he battles to save the economy and contain a health crisis

Warning of Economic Crisis, Australia Avoids Full Virus Lockdown
The Opera Bar stands empty at the closed Sydney Opera House in Sydney, Australia. (Photographer: Brendon Thorne/Bloomberg)

(Bloomberg) --

Prime Minister Scott Morrison is trying to thread the needle as he battles to save the economy and contain a health crisis as coronavirus cases surge in Australia. As leaders the world over are discovering, something may have to give.

“We’re dealing with a health crisis that has caused an economic crisis,” Morrison said after an emergency meeting of the National Cabinet late Tuesday. “Lives are at risk in both cases,” he added, citing the toll that financial ruin would take on Australians.

The conservative leader’s response to the outbreak so far appears to fall somewhere between the total lockdowns announced by New Zealand Prime Minister Jacinda Ardern and India’s Narendra Modi, and that of U.S. President Donald Trump, who says he wants his economy re-opened by Easter despite warnings that would create a human catastrophe.

Morrison has incrementally tightened restrictions over the past week, shutting pubs and casinos, banning international travel and urging people to stay home, while injecting more than A$80 billion of fiscal stimulus to protect jobs and businesses. He’s faced criticism from some who believe the government is over-reacting and from those who want more stringent controls before the country slips into an Italy-style crisis.

Meanwhile, confirmed cases have surged five-fold in the past week to more than 2,400, while thousands have already lost their jobs -- sending waves of newly unemployed into long queues outside welfare agencies nationwide.

Mixed Messages

Morrison’s press conference on Tuesday night, when he announced a laundry list of businesses that would close, was widely panned for apparent inconsistencies. Barbershops can remain open, but nail salons can’t. Personal trainers can have classes of 10, yet weddings are restricted to the couple, two witnesses and a celebrant.

Opposition Leader Anthony Albanese, whose main opposition Labor party has supported Morrison’s fiscal packages, called the announcement “confusing.”

During and after the press conference, social media lit up with criticism and parodies of the prime minister’s seemingly piecemeal restrictions, which contrasted with the direct, blunt orders of Ardern and Modi. Many are confused about what Morrison’s “scalable” measures to halt the outbreak may entail. He’s told the nation the government is now preparing a “Stage 3” response, without providing any details what that might look like.

The biggest confusion has been around education. In New South Wales state, for instance, schools remain open and authorities insist they are safe. Yet parents are being encouraged to keep their children home.

Warning of Economic Crisis, Australia Avoids Full Virus Lockdown

Morrison says he’s following the advice of Australia’s Chief Medical Officer Brendan Murphy -- that shuttering education facilities would hurt the battle to “flatten the curve” of new cases because 30% of vital health workers would have to stay home to school their children.

Still, political analyst Haydon Manning said it’s too early to judge Morrison’s efforts and he should be lauded for bringing leaders from Australia eight states and territories into a National Cabinet to forge a cohesive approach.

“What’s occurring is a chance for Morrison’s government to become a great one if it transpires that Australia manages to emerge from this crisis, in relative terms, intact,” said Manning, an associate professor of politics and public policy at Adelaide’s Flinders University. “These are unprecedented times and only history will show if most of the right things were done.”

©2020 Bloomberg L.P.