The state of Victoria and its Premier are getting both worried and serious about beating the Coronavirus, slugging citizens with $200 fines if they don’t wear masks as of Thursday. The question is: why is New South Wales waiting?
Like most Aussies, I don’t want to wear a mask but this isn’t the time for social likes or dislikes with this damn virus bound to trouble us health-wise, and especially wealth-wise, until a vaccine shows up.
The economics of this crisis is simple. If we don’t wear masks and reduce the spread of COVID-19, then more businesses will be closed down or restricted in how they work. Many businesses will simply close. And all this is bad for jobs.
The jobless rate could go to 10% rather than 8%, which means 1.2 million rather than 800,000 Australians would be forced onto the dole queue. So masks could help save 400,000 jobs and related households from economic repression and social depression.
While draconian in nature, fines work for those pigheaded people who just can’t play ball with sensible rules, such as not speeding, driving while texting and hosing down a footpath during drought-related water restrictions.
As Gerry Seinfeld once joked: “People…they’re the worst!”
Like it or not, we’re in this economy together and a survey from Brand New Australia (reported in the AFR) showed how the virus is changing our attitudes. And these changes threaten the economy as we know it.
All these revelations don’t scream anything positive for the economy. Fear of the future will hurt spending now, just when the economy (and those worried about their jobs) needs consumers to demand ‘stuff’ to get economic growth to turn positive.
Changing the way we want to live and opting for a simpler life all have negative implications for lots of businesses that have been developed in the old pre-Coronavirus Australia. Gradual change to a better way of living can be managed by an economy without great disruption. But a sudden change to say, not going out to restaurants but instead eating at home, could kill a big employing sector like hospitality.
The big hope for the economy (and it’s linked to one of the survey’s revelations) is the discovery of a vaccine. Some 44% say they won’t be relaxed about life until a vaccine is found. And late last week Goldman Sachs’ virus expert, Salveen Richter, argued that “a vaccine may gain US approval in the second half of 2020”. The infection increases in the States and a Trump re-election plan has the White House driving researching companies and the Federal Drug Administration to fast-track the arrival of a vaccine.
In fact, it has been this belief that a vaccine will soon show up that explains why Wall Street continues to ignore rising US infection rates. Clearly, if no vaccine shows, then stocks will slump again and the negative confidence effects will take the economy with it.
So do masks work?
There’s a lot of disagreement on the subject but expert virus predictors from Melbourne Uni say if 90% of Victorians wore masks, the chances of elimination of the virus goes up to 50% (from 5%) if only 50% of people wear masks in crowded indoor places.
Australians are renowned for gambling on anything (including two flies climbing up a wall, as the old saying goes) so why wouldn’t we gamble on masks for the sake of jobs, saving business owners from bankruptcy, keeping the budget from getting so high that taxes will need to go up for a long time and for the peace of mind of fellow countrymen and women?
This morning I did my money report on 2GB with Ben Fordham with a mask on. At the end of the report I asked Ben if he noticed anything different? He said no.
As I said earlier, I personally don’t want to wear a mask but if it’s made compulsory, I’d do it for the greater good. How about you?
Click here to subscribe to the Switzer TV channel on YouTube and keep up to date with all of our shows.