And we're back with Episode 11 of the Viral Upside - with something for everyone;- boning Pollies, philosophy, imaginary border fights, over-stimulated economies, letter shaped economic recoveries and bog roll shortages!
Pollies take a boning break to deliver world-class virus response.
Vicky and Barnaby knock it off to focus on fighting the pandemic.
Research emerging from think tanks across the world suggests our decisive and hard-line virus mitigation strategies are the reason our economy did not enter a recession (a recession means two successive quarters of negative growth, and we’re only predicted to have one) as well as our incredibly low COVID infection and death rates. We had a few big advantages playing our way - the fact that we live on an island, have a managed economy, spare public funds available for stimulus and, most importantly in my view, a largely compliant, law-abiding and egalitarian society capable of following rules that are in our own best interest.
This pandemic has made me more proud to be Australian (if that was possible), and weirdly more respectful of the difficulty, complexity and loveless nature of the job of our government officials, and I know I’m not alone in this view. The Australian Government has earned back its constituents' respect by steering us through this crisis in such an admirable way, at the same time taking a prolonged break from the political infighting, leadership challenges and boning in parliamentary buildings. A small mercy for our democracy, indeed.
Overstimulated (in a good way). The $200b war-chest of savings set for the biggest boom ever.
If a toddler watching an hour of toy unboxing videos on Youtube is the definition of over-stimulated in a bad way (real-life example from my house this morning), then Jobkeeper has over-stimulated our economy in a good way. Cashflow Koala and his mates committed $250 billion in stimulus into the economy (noting only $143 billion of it has been dispensed with another $107 billion still to come). Interestingly - last year household saving deposits in banks jumped by $114 billion, and business deposits jumped by $104 billion - meaning we essentially saved ALL our stimulus money, and then some. I found this surprising given that the last 9 months had been the rainiest of rainy days in 50 years, yet we seem to be hoarding our cash for a rainier one.
Commentators are noting that Australia’s economy is officially flushed with more cash than ever in history. Once some semblance of predictability and confidence return (see my rant re: State Borders), the pundits are excited about consumers and businesses investing and spending that cash, which could forebear one of the greatest economic growth periods in our history.
State Border fights illustrate the existential futility of the human condition…
This Lamb Ad - a funnier expression of the stupidity of this problem than my attempt below.
Bear with me here...
I’m not sure how deeply you’ve considered your own existence, but many philosophers argue that every institution in society is simply a collective fantasy, existing only through our shared belief in it.
There is no difference in the topography, people, flora or fauna, laws of gravity or even material physical distance separating Tweed Heads in NSW and Coolangatta in QLD - yet we’ve all agreed that they are separated by an invisible border, therefore creating different States with different laws. There is no physical border in existence here; there is only a dotted line drawn on a map hundreds of years ago that we’ve all chosen to believe in. When you think of it like this - the utter irrelevance of arguing every day, on every news program, about slamming imaginary borders shut, when these borders only exist in our minds, is palpable and makes us seem no more intelligent than the microscopic virus we’re attempting to contain, (which is indeed the only physically existent thing in the above example).
Now there is a very big difference between a state border and Australia’s border - in that Australia’s border is a moat, and therefore actually exists. We are physically separated from the rest of the world, adding to our advantage in this terrible situation. Yet we insist on enforcing these pointless imaginary separations between the parcels of land on this island we share together, destroying our ability to band together and pull our society out of this economic and public health crisis. We should be trading freely, travelling freely and spending our $220bil of saved funds inside of our economy whilst we are stranded down here together.
Do I believe in outbreak mitigation, contact tracing and tough measures - absolutely. Do I believe in localised lockdowns to prevent spreading events - 100%. Every state has figured out how to prevent, or end an outbreak - albeit Victoria was a little slower than the rest of us. Do I believe we should limit travel from a hotspot - yes where practical.
But do I think business or private travellers from Cairns, should be prevented from travelling to Perth or Adelaide, with less than 24 hours notice, because there is a known case 1800km away in Brisbane - total poppycock. Do I think someone trying to cross the Queensland border to see their mother who is dying 15km away as-the-crow-flies should be stopped for 4 hours, subsequently missing her mother’s passing (real world example) - in the service of virus mitigation, hell no! That particular example is a human rights violation, in my view. Can any business in Australia operating outside of its home state continue to trade confidently in this environment? It can’t! We can’t recover unless we can establish some certainty, and this can only be achieved with a unified approach to virus management across Australia.
The systems are robust and effective - we’ve had a year to make them that way. Therefore - if we trust each other to mitigate spreading events, then there is NO NEED TO SHUT BORDERS - firstly because they don’t exist, and secondly because shutting a whole state to mitigate a small local outbreak is unfair to citizens more remotely in that state.
The border closures are born from political grievances and other imaginary boundaries we’ve constructed in our minds that are making people unwilling to collaborate if they hail from the blue or the red team (the two-party preferred system is another excessively dumb social construct). This border bullshit is destroying national business confidence and making it impossible to attempt to turn our lives back to normal, or at least find a new normal.
A K-shaped recovery? Sounds ridiculous. But good for us in industrials.
People smarter than me reckon this graph looks like a K?
Economic academics feel the need to reduce their theories to letters of the alphabet so that us everyday morons can understand them. What they now reckon is that we’re having a ‘K-shaped’ recovery (oh, a ‘K’ now I get it, we all scream!) - where different sectors of the economy recover at different rates.
Due to amazing operating conditions in mining and unbelievable investment levels in civil and commercial construction, we are all plopped right in the middle of the most fertile parts of our economy.
It is expected that the resources sector will grow 8.2 per cent globally in the next 12 months, driven by the usual suspects (iron ore, coal etc) alongside high demand for battery metals and rare earth elements (something Australia is getting good at). If you follow any of the listed mining companies on the ASX, you will notice that stock prices in the sector are going from strength to strength, with record earnings projected.
Talk of the infrastructure boom that is upon us now, propped up by $300 billion in additional COVID stimulus on top of an ambitious infrastructure spending programs of past Liberal governments, has turned to concerns around a palpable shortage in equipment, people and consumables for concurrent major projects. In our recent article, ‘How COVID-19 Impacted the Australian Construction Industry in 2020’, we surveyed industrial businesses across the country and found that 51% of respondents said they plan to purchase more equipment in 2021, and 59% also said they’re looking to hire more employees.
I call these ‘champagne problems’ - because not being able to grow fast in an expanding construction market is a hell of a lot better than not being able to survive in a contracted one (and that was/is a not-to-distant reality for a lot of our customers in SEQ and WA). But it will be a frustration none-the-less unless we can kiss and make up with China, and reform our visa provisions (which will also require us to open our state and national borders). Industry leaders are already calling out project delays if we can't find more skilled labour.
Sadly, not every sector will be as lucky as us in industrials, with tourism, hospitality and some service sectors greatly affected over a much longer term by this ongoing saga.
Bog Roll Shortage Strikes in Greater Brisbane after 3 day lockdown announcement.
Isle 6, Coles New Farm - Friday 7th January - Seriously, Brisbane. Aren’t we past this?
In a scene not dissimilar to the angry horn-wearing Q-Anon supporters storming the Capitol in Washington last-week, Brisbane residents ran mindlessly to their local Coles on Friday to buy up on the bog roll upon hearing the news of an imminent 3-day lockdown. This, of course, raised many questions amongst the thinking population of the town - the most poignant of which is pondering how much toilet paper a household needs over a 3-day period, particularly when you can legally attend the shops to restock at any point during the lockdown.
Also, bye Donald.
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