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Edition 244 – Border Closures

Last week, the Federal Government engaged in the biggest budget spend in the nation’s history. A massive deficit as a result of personal income tax cuts, business investment stimulus and infrastructure spending are all targetted at firing up an economy that has been impacted by COVID 19.

When you read the budget papers (I know, only certain nerds do!), it’s eye watering the numbers the Government are talking in terms of deficits over the next few years and the size of Government debt. By mid decade, Australia’s Government debt will be close of $1 Trillion. In a lesson in history, back in 2007, the Howard Government had Zero debt, so adept had they been at managing the budget, restructuring the economy and building a sovereign wealth fund.

However, and it’s rare I turn political in my weekly broadcasts, it’s my honest opinion that unless the states open their borders to each other, the deficits and debt will all be for nothing.

In recent months, here’s what some of my own clients have experienced in their interstate dealings:

  1. Client A – turned back at the Queensland border, in spite of having all the necessary documentation to prove the need for their staff to be in the Sunshine State to install vitally important equipment for the food industry. Those staff were flown back to Sydney, same day, at a not insignificant cost to the business.
  2. Client B – that performs work in the essential preventative maintenance arena, dealing with, essentially, a shut down economy in Victoria to the point where, shortly, they may need to lay off staff. They’ve endeavoured to re-deploy staff to New South Wales. However, the cost of quarantining staff and rejigging programmes is proving difficult, amplified by the ongoing restrictions on business in Victoria.
  3. Client C – that performs work throughout New South Wales and faced the officious attitudes of people that made their own decisions about accepting their predominantly Sydney based workforce into regional New South Wales. These people were going against Government Health Advice and creating their own “internal” borders, to the detriment of the ultimate client, and my own client.
  4. Client D – who has made the decision to hold off chasing work opportunities in Queensland simply because they’re not prepared to invest the time and cost of travelling to the Queensland border, only to be turned around at the invisible line.
  5. Client E – an allied health business that has been completely smashed, being based in metropolitan Melbourne. The fact the police have entered their premises and checked why they’re open, when there is very limited business activity, may be what needs to happen in a COVID lockdown. But, it is incredibly concerning when hard working, law abiding family business owners are subject to enquiry and inquisition as if they lived in some Eastern Bloc country in the Cold War era.

I understand the health advice and follow it. I’ve been supportive of the measures that have been adopted by the Australian and New South Wales Governments.  However, there is a growing economic crisis unfolding that will create greater health concerns for business owners and their staff if we don’t get back to work. 

Shutting borders doesn’t get rid of the virus. It simply prolongs the inevitable and doesn’t prepare jurisdictions for learning to manage the virus in small numbers.

It’s my strong belief that we need to adapt to living with the virus. A vaccine could be some time away, so in the meantime, we need to get used to social distancing, hand sanitising, the four square metre rule and simply doing things a little differently. The longer state borders remain closed in a country that has pretty much closed itself off from the rest of the world, the more catastrophic could be the financial and other health consequences for family businesses, their owners and their employees

Less than 15 cases per day in New South Wales is deemed too much by other states, so they keep their borders closed to the Premier State. There are some European and North American jurisdictions that would love to see those numbers, yet still remain open for business.