Picking the post-COVID winners
We need a plan to transition out of job and business support, writes Peter Skillern
AS the COVID pandemic escalates globally, those of us fortunate to live in Tasmania are giving thanks for being blessed enough to have avoided the worst of it to date. This is in no small part by having a decisive premier that has not succumbed to the pressures exerted on him to open our borders.
The bipartisan approach generally throughout this crisis is in stark contrast to the US, where partisan politics and pointscoring has driven that country to the top of the COVID infection and death rate.
There is no doubt though that closing borders and even more lockdowns extract a high price economically and, in many cases, have their health consequences in areas such as mental wellbeing. Many Tasmanian businesses have been adversely affected and a number will not emerge when we get to the other side. Equally there are many who have lost their jobs.
There are many on JobKeeper or JobSeeker payments implemented at the beginning of the crisis.
We are now reaching a point where we need to reassess these programs and long-term economic impacts. The ever-growing government debt has to be paid for at some point and it will be our children left with this legacy. It could be argued that is a reasonable trade-off to ensure we remain economically viable and ready to pick up where we left off. The reality though is very different. To begin with, the world as we knew it in 2019 is not returning. Pandemics throughout history have been a catalyst for significant societal change and this is no different. Economic realities post-COVID will remain changed, the practices of the past have in many cases been found to be unsustainable and have evolved as a result throughout this crisis. A prime example is the need for companies to have large and expensive office spaces to house their employees. We now know having home-based employees can and does work. We now know we can have many doctors’ appointments without attending a surgery, we can attend a vast range of meetings or gatherings without leaving our lounge rooms. New, yes, but many have adopted these and many other changes without a backward glance once they have realised how easy it has become.
However, we now must turn to the tough decisions. Is paying someone $1500 a fortnight appropriate when previously they were earning $500. The short answer is that we now have a distortion in the employment market. As businesses are beginning to start up they are finding it very difficult to attract employees, which in turn constrains their ability to engage economically.
In the coming season, agriculture needs large numbers of people on farms helping harvest, plant and pack. We need to ensure people are incentivised to do so. This is not only an economic argument. If we do not get that labour force there will be a negative impact on the food supply chain.
We have a range of props for the economy, but we cannot simply cease these at some point in the future. We need a plan to ease out of the support mechanisms and transition to a more robust, sustainable economy. We need to be thankful, while seeking realistic solutions to the immense economic challenges in front of us.