Coronavirus fallout
Mike Seccombe on the government’s efforts to war game the virus and mitigate its economic toll
By Thursday of last week, Scott Morrison was a politician sorely in need of a diversion.
It had been a dreadful few days in parliament, during which he and his government had been on the defensive: about the state of the economy and the vanishing budget surplus, about the slow flow of relief funds to those affected by the summer’s devastating bushfires, and above all about the corrupted process by which they had disbursed $100 million in sports grants.
So, come 3.45pm, after the last bruising question time of the week, Australia’s leader took himself before the assembled media in the prime minister’s courtyard and endeavoured to show that the government was on top of the biggest issue of the moment – coronavirus.
Morrison brandished a sheaf of papers, held together with a bulldog clip and bearing an image of a virus, and announced he was implementing an “emergency response plan” to the threat of COVID -19.
“While the World Health Organization is yet to declare the nature of the coronavirus and its move towards a pandemic phase, we believe the risk of a global pandemic is very much upon us,” he declared.
“As a result, as a government, we need to take the steps necessary to prepare for such a pandemic.”
Even though Australia was ahead of the game “at this point”, Morrison said, it was now necessary to “elevate our response to this next phase”. And such elevation could involve some quite draconian measures.
Morrison went on at some length, projecting resolution and decisiveness, referring to deliberations of the national security committee of cabinet, presenting as a man in charge of events.
Except, as Stephen Duckett, a former secretary of the federal Department of Health, now health program director at the Grattan Institute, points out, the man in charge of events was actually someone else.
“At the national level, Brendan Murphy’s the one calling all the shots,” says Duckett. “And basically, they
[the government] have been doing what he says.”
Professor Murphy is Australia’s chief medical officer and chair of the Australian health protection principal committee (AHPPC), a body comprising all state and territory chief health officers.
And behind them, says Duckett, “there is a bureaucracy, there’s a machinery, there’s a set of processes about how Australia – not government – Australia should respond. There are pandemic preparedness plans in every state. This is not the first pandemic fear we’ve had in the past decade.”
Though the particulars of various threats change, says Duckett, there is a “routine and mechanism” for things such as quarantine and contact tracing, built up since before the Spanish flu pandemic of 1918-20.
The plan for dealing with coronavirus was based on this, refined according to the particular characteristics of this threat, informed by observation of the course of the disease elsewhere in the world, “war gamed” by the AHPPC according to different scenarios depending on the extent of transmission in the community, and discussed on a weekly or daily basis, according to Duckett.
Essentially, he says, all the prime minister did last Thursday “was just to put his label on it”.
Unsurprisingly, given the timing and tone of the announcement, there is a view, widely held in political and media circles and among some in the health establishment, that Morrison’s move was motivated more by political rather than medical concerns.
As Labor’s Health spokesman, Chris Bowen, noted, the emergency plan was actually published on February 18, nine days before Morrison’s press conference, “and has provided the basis for action since then”.
Bowen pointed out that the chief medical officer also held the role of director of human biosecurity, and that under the relevant act could determine that a “listed human disease” was communicable and a danger to general health. In the case that such a danger was determined, extraordinary powers could be exercised. COVID-19 was listed on January 21.
The powers available in the wake of that listing are very wide.
Individuals can be subjected to control orders, forcing them to provide personal details and/or body samples for analysis or to undergo treatment, and to be quarantined in their homes or medical facilities. On top of that, restrictions may be placed on people entering or leaving specified areas, which in practice could mean shopping centres, sporting facilities, aged-care homes, potentially whole communities.
So when Morrison fronted the cameras that day, little changed in Australia’s coronavirus response – there were just 22 confirmed cases of the virus identified in Australia, no evidence of person-to-person transmission and zero deaths.
It did change the conversation, though. It gave the prime minister and the Coalition something to talk about other than the government’s perceived failings.
In less than a week, circumstances also changed – dramatically – here and around the world.
In Australia, the number of cases has more than doubled, and it is increasing at an alarming rate. There is now evidence of person-to-person transmission, and a number of cases in which authorities cannot establish how the disease was passed.
Two elderly people have died, one a traveller aboard the cruise ship Diamond Princess. Equally tragic, but more worrying, the other was a resident of a Sydney nursing home. Another resident and a carer have tested positive. Forty staff at a Sydney hospital, who were in close contact with an infected doctor, have been quarantined under suspicion of infection.
The Reserve Bank calculates the hit from coronavirus, largely borne by the tourism and education sectors as a result of travel bans, will wipe about
0.5 of a percentage point from gross domestic product growth in the March quarter. That’s on top of another 0.2 of a percentage point lost due to the bushfires. The upshot is the economy will very likely shrink in the quarter. The RBA has not made an estimate for the three months after that, but there is good reason to fear Australia will enter a recession.
The government’s cherished budget surplus, which was looking parlous even before the bushfires and virus, is almost certainly gone – although Treasurer Josh Frydenberg still refuses to admit it. But he says the government is planning to spend billions in tax breaks for businesses and introduce other measures to prop up the economy.
Estimates of the cost of the virus, in terms of health and wealth, vary widely. Chris Richardson, a partner at Deloitte Access Economics, says modelling suggests a loss of between $5.5 billion and $6 billion, based on the current known impact of a relatively small section of the economy – education, tourism and mineral exports. That is assuming Chinese students are back in the country by April, and the pandemic is largely over by July.
The impact would be about a third of what we saw during the global financial crisis, says Richardson, a significant loss.
Professor Warwick McKibbin of the Australian National University’s Crawford School, who is a former RBA board member with considerable experience modelling the costs of pandemics, including SARS and MERS, suggests it will be at least that much, potentially more.
McKibbin and his ANU colleague Roshen Fernando offered seven different scenarios, varying according to how the virus progresses, how governments intervene and how health authorities cope.
Under the worst of these scenarios, as many as 68 million people could die around the world, including almost 100,000 in Australia. The cost to the Australian economy could range from about $6 billion to $150 billion, in a year.
One senior public health official, speaking on the condition of anonymity, says that on the basis of what is known about it so far, the indications are that the coronavirus pandemic will not be over quickly.
“Look, COVID-19 is big. Australia is going to be in for a tough winter,” he says. “There will almost certainly be many thousands of cases, and the expectation is that it will roll on for some months, and probably peak in July and August, as happens with the usual seasonal flu. Public health crises like these tend to go on longer than many people anticipate.”
He also thinks the government is doing the right thing, although probably not for entirely altruistic reasons – that Morrison, having lost credibility for his response to the bushfire crisis, now appreciates the risk of being seen as slow to act.
“The stakes are high for him after the mishandling of the bushfires. He’s got to handle this emergency a lot better than the last one. He can’t fuck up again,” the official says.
And to date the government – read Murphy and the health bureaucracy – has done pretty well, says Professor
Raina MacIntyre, head of the biosecurity program at the University of New South Wales’s Kirby Institute.
“Australia’s response to the outbreak is one of the best,” she says, “which is why we’re seeing relatively low numbers of cases here.”
MacIntyre says the world is collectively learning as the virus spreads – for, example, Japanese researchers showed that people can be infected and infectious with COVID-19 yet display no symptoms of illness.
“The point there is that it is not good having people in quarantine for two weeks unless you test all of them,” says MacIntyre, “[because] you could release somebody who’s actually asymptomatically infected.”
The United States, by contrast, “really messed up the testing. They talk about vaccines and drugs, but what you need right now to stop the epidemic taking off is to be able to test people,” she says.
The consequence of the US failure is now becoming apparent.
“The first case in the US was in Washington state, but it was six weeks ago. So that’s approximately three incubation periods on, which potentially means that first patient might have infected a bunch of other people who then infected a bunch of other people…”
The other “tried and true” measures, says MacIntyre, are travel restrictions and quarantine. Thus Australia did well by moving early with its travel ban on China.
It was costly, yes, but effective when COVID-19 was heavily concentrated in China. However, that is no longer the case. China is now one country where the spread of the virus has been reversed.
As of Tuesday this week, there were 130 confirmed new coronavirus cases there, according to the daily World Health Organization situation report, and 1792 scattered across another 72 countries.
Almost one-third of those were in Iran, upon which Australia has now imposed a travel ban, identical in its terms to that imposed on China.
But there also were 600 new cases in South Korea, bringing the total there to more than 4800. Italy had 347, France 91, Spain 69 and Germany 28.
The numbers pose a couple of questions. First, why does Australia not have travel bans in place for other countries? Second, why is China alone winning the war against COVID-19?
MacIntyre wouldn’t venture an opinion on the first question, beyond the observation that such decisions involved “a delicate balance between health and trade and economy” and would likely get harder as the virus continued to spread.
And the answer to the second question, she said, was to be found in the unique degree of control the Chinese government exercises over its people, which enabled it to enforce draconian restrictions.
“I don’t know that any country could do what China has done,” she
“LOOK, COVID-19 IS BIG. AUSTRALIA IS GOING TO BE IN FOR A TOUGH WINTER. THERE WILL ALMOST CERTAINLY BE MANY THOUSANDS OF CASES, AND THE EXPECTATION IS THAT IT WILL ROLL ON FOR SOME MONTHS.”
says. “I don’t think we could do that in Australia. I don’t think we could lock down Sydney so people were not allowed to go in or out for a month.”
Implicit in that statement is the prospect that COVID-19 could be unstoppable in societies without the ability to impose such restrictions.
The rising number of coronavirus patients in Italy presents an interesting case study. In international comparisons of health systems, it consistently ranks very near the top, certainly far ahead of China. In social terms, though, it is pretty much the antithesis of China.
Italians tend not to be terribly respectful of authority, as anyone who has read or watched news reports of attempts to lock down a few virus-infected towns will have observed – people cycling or jogging through containment lines, delivery vehicles going in and out, locals arguing with the police. And infection rates ever increasing. The WHO status report issued on Wednesday showed the number of cases in Italy was up again, by 466. The decision was taken to close all schools and universities.
Italy was faring worse than most, but the news was bad almost everywhere. Germany declared a pandemic; California declared a state of emergency.
Globally, new infections were up another 2103 across 76 countries. By Thursday, it was 81 countries.
In Australia, up before senate estimates on Wednesday, Brendan Murphy conceded it “may not be possible to contain” the spread of the disease. Through isolation and contact tracing, the hope is to slow its spread.
Murphy flagged the prospect of cancelling all elective surgery to free up hospital beds, and briefed senators on particular areas of concern, including aged-care homes and remote and Indigenous communities.
On Thursday, Morrison announced enhanced screening for visitors from Italy and a travel ban for South Korea. Australian travellers are being told to reconsider travel to the Republic of Korea, and if they do go to not visit the city of Daegu.
At a joint media conference with the prime minister, Professor Murphy said Australians should not panic. “There is no reason to put a mask on when you are walking around the shops, there is no reason to stop going to football matches or community activities, there is no reason to denude the shelves of lavatory paper in the supermarkets,” he said.
But he frankly admitted that the government has been war-gaming disease scenarios, including the possibility of “some millions of people being infected over a period of several weeks”.
Morrison jumped in to warn of the need to not “be speculative about this in the public domain” lest it create “unnecessary anxiety”.
“To all Australians, let’s get through this together, let’s help each other, let’s stay calm, let’s go about our business. Let’s continue to enjoy the most wonderful country in the world in which to live,” he said.
The prime minister, it seems, facing a slowing economy and a panicked public, has backed away from his pandemic declaration of a week earlier and decided
• instead to follow the doctor’s orders.