AVOID PANIC AND BANK ON LAND TO MAINTAIN VALUE IN TRYING CONDITIONS

HISTORY has a habit of repeating itself, although dressed differently on every occasion. World wars, depressions, credit squeezes, and recessions are dotted throughout our economic history. All have left scars but on every occasion we have recovered, rebuilt and moved forward, and I have no doubt this will happen through this current COVID-19 crisis.

My experience through four recessions, three major stock market crashes, a nineto month national pilot strike, the Asian financial crisis, 9/11, the global financial crisis and others is that fear is the biggest issue. Fear generated by so many people driving speculation about what might happen and all the consequences, most of which do not come to reality. It is the fear itself that causes bad decisions. Those decisions have significant economic consequences.

We will see a significant rise in unemployment as we are asked to self-isolate where able to, and, where not, to keep social distancing. Government and health official decisions are grinding economic activity a massive slowdown. The consequence is loss of jobs. Unemployment could easily reach 30 per cent but it will not be ingrained. A significant proportion of the unemployed are people who simply won’t have jobs while this lockdown of industries and social distancing continues.

As soon as these restrictions are lifted there will be a massive demand for new employees and the unemployment rate will reverse. There will of course be more longer term casualties as some industries will take some time to bounce back. I am inspired as I see so many businesses innovate and while we hear every day about businesses suffering, there are many that are busier than they have ever been.

What is encouraging is there are unprecedented government assistance programs being unfolded each day, whether it is for individuals or for businesses.

Good-hearted Australians are also rising to the challenge in ways we have never seen. Commercial landlords offering rent free or vastly reduced rents, many residential landlords are assisting genuine unemployed with rent relief, banks offering mortgage relief, council’s deferring rates, and so on and so on.

These measures will buy some time for individuals who find themselves in difficult situations to navigate their individual circumstances.