Corporate Australia accuses Canberra of putting politics first with lockdowns

Australia is making “big mistakes” in failing to reopen to the world, with business leaders accusing the government of putting politics before science ahead of a looming general election.

Increasingly fed up with Covid-19 lockdown policies, and a failure to rollout vaccines that would allow the economy to open up, the leaders of many of Australia’s biggest companies — including BHP, Macquarie and Qantas — have said the nation will have to learn to “live with the virus”, as many other countries have done.

In an open letter to both the federal and state governments, the heads of 79 big companies, “which employ almost one million Australians”, warned that lockdowns were having “long-lasting” effects and were creating more economic problems.

“The borders should have never been closed,” Graham Turner, chief executive of travel company Flight Centre, told the Financial Times.
“We’re making some very big mistakes here.”

Australia shut its borders in March last year and, for a while, won international praise for successfully pursuing a “zero-Covid” strategy. The highly contagious Delta coronavirus variant, however, combined with a failure to source vaccines, has left borders sealed and much of the nation locked down.

“It’s time for corporate Australia to turn its disquiet and rumblings into a roar,” said Greg O’Neill, the chief executive of Melbourne fund manager La Trobe Financial, one of the signatories to the open letter sent by the Business Council of Australia. “It is time for courage and honesty. Not politics.”

But political pressure is mounting on Scott Morrison, whose conservative coalition government has a threadbare majority, is trailing in the polls and is embroiled in multiple scandals.

This month’s announcement of an Australia, US and UK security pact gave Morrison’s Liberal party a fillip, but it still trails Labor, the official opposition, by 6 percentage points.

Voters are increasingly turning their backs on both parties in favour of independents, according to a Newspoll survey, as frustrations over the lockdowns smoulder.

The numbers of Covid-19 infections appear to be plateauing, though remain more than three times higher than August last year, their previous peak, with about 1,700 new infections a week.

Big businesses are concerned government is pandering to an anxious public because a federal election must be held by May next year.

Turner said that the prime minister was “scared of making a wrong move”.

“I spent five weeks working in London over July and August and they’ve still got a lot of infections but they’re back to normal,” he added. “Decisions are being made for political reasons, not on any scientific or evidence basis. That’s probably the most frustrating thing for business.”

Australia’s Department of Home Affairs responded that international borders remained closed “to help prevent the spread of Covid-19”.

Tim Harcourt, a senior economist at the University of Technology Sydney, said he was “surprised to what extent things have held together”.

Harcourt, who was formerly chief economist at the Australian Trade Commission, the country’s international trade agency, conceded that the situation was not ideal but felt the Business Council of Australia was overstating the problem.

“They’re lobbyists, they’re rent-seekers,” said Harcourt, “so they’ve got to put the strongest case they possibly can”.

This month, the Reserve Bank of Australia said the “considerable momentum” of the nation’s economy had been “interrupted by the Delta outbreak and the associated restrictions on activity”.

After Australia powered out of recession in the third quarter last year, gross domestic product was “expected to decline materially” in the September quarter and unemployment would “move higher in coming months”, although from a low base.

While the setback was “expected to be only temporary”, a high degree of uncertainty remained and “much will depend on the health situation and the easing of restrictions”, the bank said.

Australia’s vaccination rates remain among the lowest in the developed world, with just 41.4 per cent of the population fully inoculated — well behind the UK (66.7 per cent) and Canada (70.4 per cent) and below the US, where 54.7 per cent have been doubled jabbed.

Canberra has been increasingly successful in sourcing vaccines from abroad but shortages remain and are a big source of friction.

After a Delta outbreak in June, much of the national Pfizer vaccine supply was diverted to New South Wales, Australia’s most populous state and home to Sydney, the country’s biggest city. That decision helped NSW rapidly increase its vaccination rates but left other states with greater shortages.

In its letter, the Business Council of Australia said the country was “juggling a mental health emergency” and that “some of the impacts of current lockdowns are hidden, and the effects will be long lasting”.

It added that “as vaccination rates increase, it will become necessary to open up society and live with the virus, in the same way that other countries have done”.

The sentiment was echoed by small business. Alexi Boyd, chief executive of the Council of Small Business Organisations, said the refusal to open internal and external borders was undermining Australia’s economic recovery.

O’Neill added that frustration was growing across the country.

“Ask any union, business, employer group or political party — all are commissioning polling on community attitudes, and it’s all coming back with the same two overwhelming observations: ‘I want my life back’’; and, ‘if people choose not to get vaccinated, stuff them’,” he said.

“Aussies are a pragmatic bunch after all.”