The economists issued the open letter to Prime Minister Scott Morrison and the National Cabinet, saying it would be a “mistake” to expect loosening social distancing measures would benefit the economy and jobs, given the rapid spread of COVID-19.
You can read the full letter here.
Mr Morrison has indicated measures could begin to be lifted within a month if a number of conditions are met, and other sectors – particularly retail – have pressured the Government to ease social distancing restrictions in recent weeks, saying they are not worth the damage to the economy.
The economists however say this is a “false distinction”.
“We cannot have a functioning economy unless we first comprehensively address the public health crisis,” they write.
“We recognise the measures taken to date have come at a cost to economic activity and jobs, but believe these are far outweighed by the lives saved and the avoided economic damage due to an unmitigated contagion. We believe strong fiscal measures are a much better way to offset these economic costs than prematurely loosening restrictions.”
The group says it is vital to keep social distancing measures in place until the number of infections is very low, testing capacity is expanded, and widespread contact tracing is available.
“A second-wave outbreak would be extremely damaging to the economy, in addition to involving tragic and unnecessary loss of life,” they conclude.
The letter comes as new research by the Grattan Institute estimates between 14 and 26% of Australian workers could be out of work as a direct result of the coronavirus shutdown, with the impact on jobs and the economy to last for years.
They found that the unemployment rate will rise to between 10 and 15%, its highest level since the Great Depression in the 1930’s.
But as other countries have shown – see the Swedish story here – the choice to focus on the economy can have a drastic impact on people’s health.
