What does roadmap to recovery look like for Australia?

Even as Victoria confronts a six-week shutdown in response to emerging coronavirus cases, other states are reopening. Policy responses must reflect the needs of the most vulnerable, say UNSW Business School’s Leisa Sargent and John Piggott.

Some parts of Australia are seeing businesses reopen after shutdowns to reduce the spread of the coronavirus. In some places more Australians are heading back out onto the streets, filling up cafes and restaurants, increasingly driving to school, shops and even trickling back into the office.

What impact is the easing of coronavirus restrictions in those locations having on health and the economy, and who is bearing the brunt of policy responses to COVID-19?

First steps towards Australia’s post-pandemic recovery

There is little question that Australia relies very heavily on migration.

“If you think about a lot of our exports – especially people-based exports like tourism, education, business services – those exports require our borders to be open, and open in a reasonably efficacious way, not open in a way that requires two weeks’ quarantine every time you cross the border. And it’s going to take some time before that can be done safely,” says UNSW Business School’s Scientia Professor of Economics John Piggott, Director of The ARC Centre of Excellence in Population Ageing Research (CEPAR).

Agreeing with Prof. Piggott, Senior Deputy Dean of UNSW Business School Professor Leisa Sargent says a successful economic recovery will also largely depend on people’s movement and sensibilities around physical distancing.

“It’s about staying connected to people … It’s also about making sure people are spending again, going out and taking local holidays, recovering from what I think has been a period of being quite separate from the world,” she says.

“In some ways, I think it’s a great opportunity for people to be thinking about how we get business back on track.”

The recovery may also depend on the extent to which people and government can support and reopen businesses that have been partially shut down, with great consideration given to helping them get back on their feet.

Policy responses must help those most at risk

A recovery plan must also address the vulnerable groups in society that have been hit hardest by the pandemic, says Prof. Piggott.

“The first is young people who are starting in their careers and are now being tripped up. You start working at a professional organisation, and six months in or 18 months in, suddenly you’re on three days a week. That’s a really negative thing to experience early in your career,” he says.

Another vulnerable group are workers in their 50s, or older. “It’s reasonably common knowledge that if you are thrown out of employment at the age of 55, you’ve got much less chance of coming back into the labour force than you do if you’re younger … the rate of long-term unemployment is much higher for people above the age of 55,” says Prof. Piggott.

This could mean that more people drop out of the workforce altogether and retire early, minimising their chances of saving for retirement.

“Imagine you’re 55, the kids have just left, and you’re really looking forward to the next 10 years being the decade where you can save a lot … now you’re out of work and will have exhausted your superannuation by the time you’re 65 or 66. You’ll be someone who lives the rest of their life on the age pension. That’s a very different life trajectory from the previous one,” says Prof. Piggott.

Women, especially those with young children, are another vulnerable group, notes Prof. Sargent. “They’ve had a double duty of working remotely in many circumstances and also having to homeschool,” she says.

“I think it affects women more than men. It affects, I guess, both parents in terms of their mental health, but it also affects their productivity. They’re much less productive if they bring up children and have children around the house as well,” agrees Prof. Piggott.

It is also important to remember the occupational health of those who are more exposed to health risks than economic risks. “Maybe even someone who works in a checkout capacity at a retailer,” says Prof Piggott. “If you look at these kinds of jobs, there are a lot of mature women. So, they’re once again more exposed than other groups to those sorts of risks.”

Attention to all the above will have a crucial role to play in Australia’s path to recovery.

What is the longer-term impact?

Some say the pandemic creates a once-in-a-lifetime opportunity for Australia to rebuild and reshape the economy for the better. Others are confident that, for example, flexible working is here to stay.

Prof. Sargent says there will be “permanent flexibility” and “an opportunity for more satisfying lives”, but this means people will have to think hard about what it means to work, the design of work, and the quality of working life.

“Many people have been on a steep learning curve, and I think we’ve got to take the best of that with us going forward, and leaving so-so technology and outdated management processes behind,” she says.

Prof. Piggott also observes that “we’ve brought quite a lot of the world forward. Maybe 20 years from now or 10 years from now, this would be happening anyway. But actually, we were going through a crash course.”

“The future of work is now. We got to a technology-mediated workplace very quickly and in a transformative way, and we were still getting our heads around that, to be honest,” Prof. Sargent says.

“Businesses need to be careful investing in enterprise platforms and managing in more inclusive ways.”

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