Finance Finance News Stephen Mayne: Time to listen to business and ease Victoria’s brutal lockdown
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Stephen Mayne: Time to listen to business and ease Victoria’s brutal lockdown

Victorian Premier Daniel Andrews won't fight the Inquiry's efforts to access his phone records. Photo: TND
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At the risk of getting smashed on Twitter as a heartless capitalist putting money making ahead of community health, and after living through this brutal Melbourne lockdown for much of the past six months, I’m ready to argue for a different path out of the lockdown to the one unveiled by Daniel Andrews on Sunday.

As an increasingly hostile and united business community keeps saying – from VECCI, to the Business Council, to Ai Group and Wesfarmers CEO Rob Scott – the Victorian lockdown is too harsh and the Premier appears to have a tin ear when it comes to consulting with and listening to business.

Victoria is calling its strategy “aggressive suppression”, but under Dan’s plan on Sunday, we won’t get to enjoy “COVID-normal” until November at the earliest, or until there has been no new cases for 28 days straight.

Surely that’s New Zealand-style elimination, rather than suppression.

As for the specifics of Stage 4, which is now locked in for at least eight weeks until September 28, does anyone else think it is passing strange that the fanciest of ice cream stores and cake shops are trading away across Melbourne, yet Bunnings is shut at a time when many isolated Victorians would like to work on their homes?

“COVID-normal” is still months away for Melburnians. Photo: Getty

The same goes for Officeworks.

If we are forcing everyone to work from home, it makes no sense to shut down access to office supplies beyond newsagents, particularly when there has been no evidence of any virus spread at either Bunnings or Officeworks.

And why are the newsagents even open when 7-Eleven and supermarkets sell newspapers?

Is it something to do with pleasing the gambling industry through lottery sales, just like the inconsistent decision to keep horse and dog racing going across Melbourne and regional Victoria?

Victorian Racing Minister Martin Pakula says wagering must continue because of animal welfare issues with horses and greyhounds. But what about the impact this lockdown is having on human welfare?

With a mental health crisis deteriorating and millions of Melburnians losing their fitness during this shutdown, why not give small concessions, such as allowing tennis and golf for two?

By all means go nuclear on hotspots – such as clusters in specific suburbs, meat works, housing commission towers, hospitals, distribution centres, quarantine hotels and nursing homes – but why ignore the informed voice of business and instead flatten the economy with a one-size-fits-all approach?

It almost seems as if Mr Andrews, a former highly competent Victorian health minister, is feeling personally guilty and responsible for the second wave outbreak and subsequent devastating loss of life across Victoria’s aged-care sector. So much so that he is determined to minimise the health impact, no matter what.

He often says “I decided” in his daily press conferences. But this is meant to be a cabinet government, where no one person should have the power to make these calls alone, be it a politician or a single medical bureaucrat such as Brett Sutton.

After Labor’s landslide victory over the Victorian Liberals in 2018, where is Dan’s enormous backbench in terms of speaking up and bringing some balance to the equation? Do any of them listen to business constituents?

Similarly, why hasn’t Dan once spoken to Opposition Leader Michael O’Brien to try and bring some consensus to the decision-making process? And why wasn’t the federal government at the table before Sunday’s announcements, particularly given that Canberra is largely picking up the tab?

Deep in the red

On top of everything already announced and flowing, Victoria is going to need an additional $10 billion-plus in federal bailouts after this shutdown to restore the state’s battered balance sheet. Not to mention the devastated private sector.

Mr Andrews and his long-serving Treasurer Tim Pallas had progressively blown the budget on a big infrastructure program during their first five years in office, ramping up gross debt to a record $55 billion, even after raising $10 billion privatising the Port of Melbourne in 2015.

That left them with very little financial wriggle room going into this pandemic.

If the Reserve Bank suddenly announced it was selling all its Victorian government bonds rather than buying them through its unprecedented $60 billion-plus money printing operation, we’d be in all sorts of trouble.

Surely the RBA, as our new chief lender, should be consulted on the scale of the lockdown provisions.

The federal government’s highly transparent centralised borrowing authority, the Australian Office of Financial Management (AOFM), makes a public announcement with every bond tender and publishes total outstanding debt on its home page. It’s currently at $775.6 billion.

Due to excellent real-time transparency, we already know that yesterday’s $2 billion federal offer of nine-year bonds cleared at a yield of just 0.924 per cent, so there’s plenty of cheap long-term debt available for a bailout.

Where’s the transparency?

Compare that to the AOFM’s Victorian equivalent, Treasury Corporation of Victoria, which has said very little since this April 24 update when it warned that its 2020-21 borrowing requirement would be between $10 billion and $14 billion higher than the previously advised $10.2 billion.

Back in 1992-93 when Victoria last had a recession and budget crisis, the new Liberal Premier Jeff Kennett was screaming blue murder about Labor’s $33 billion state debt and $2 billion-plus annual deficit.

He fixed this with a brutal reform program by axing more than 100,000 Victorian public sector workers and privatising about $33 billion worth of state assets between 1993 and 1999. But now there are few state assets left to sell.

In light of this history, it is disappointing that Mr Andrews has delayed the state budget from May until October. Where is the transparency?

It would be foolish to turf Andrews, as shock jocks like Alan Jones demand, given he’s normally a highly competent Premier.

However, he’s made a few mistakes with this pandemic. Financial management is his weak suit, and he shouldn’t be the Messiah making all the decisions centrally.

This is particularly so when his inclination is to go for extreme lockdown, regardless of the cost to business and community wellbeing.

Wesfarmers is a great Australian company that employs 30,000 Victorians, so why not listen to its advice and let the locked-up public make quick solo visits to purchase supplies from their safely run Bunnings and Officeworks stores, at the very least.

And anyone for tennis?

Stephen Mayne is an independent journalist, founder of Crikey.com, shareholder activist, Qantas shareholder and former local government councillor who can be reached at Stephen@maynereport.com or via Twitter @maynereport

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