We must hold our nerve to stay on a path to growth

23 December 2021

This opinion article by Business Council chief executive Jennifer Westacott was first published in The Australian on Thursday 23 December 2021 

Right now, the economy is emerging strongly from Covid lockdowns, but the longevity of the recovery depends squarely on our ability to keep borders open, welcome people back and guard against knee-jerk decisions.

This doesn’t mean throwing caution to the wind. Australia is in a far stronger position than many other countries to manage existing and emerging variants, with world-leading vaccination rates and test-trace-isolate programs.

We are in a new phase of our Covid response – managing risk while removing the last planks of Fortress Australia. This means we need to truly learn to live alongside Covid, which necessarily requires residing alongside uncer­tainty and volatility until the pandemic ends. The overriding task is to implement robust, sensible, predictable and nationally consistent systems to ensure our reopening and recovery plans are resilient to any shocks to come.

Now that we are finally dismantling domestic and inter­national borders, Australia must resist the temptation to halt reopening plans in the face of emerging variants. If we lose our nerve and once again pull up the drawbridge, we will restrict growth and create inflationary pressures that erode any short-term increases in wages that flow from holding back labour supply.

Instead, we must stay the course and once again become an open, innovative and ambitious economy that grasps the opportunities from global markets.

Clear, consistent and risk-based action is the best way to keep people safe and maintain the economic momentum of our recovery. Going forward, national cabinet can limit the economic damage of the uncertainty created by the new Omicron variant, and future variants, by giving businesses and the community clarity and certainty that the mistakes of the past will be avoided.

We believe this centres on a four-pronged approach.

One: clear and consistent messages about what restrictions may be put in place, and their triggers.

Two: a commitment to no statewide lockdowns and domestic border closures which throw people’s lives into chaos; plus, an increase in testing capacity.

Three: state governments should stay the course with no caps on incoming international travellers and, if it becomes necessary, quarantine limited to just 72 hours.

And four: stronger systems to manage outbreaks locally, if necessary, to be planned for now.

These risk-management steps go hand-in-hand with the proactive actions we need to take now to lock in the gains of the recovery by removing supply side constraints while also laying the foundations for longer-term growth. This includes continuing the work to get critical skills, international students and returning Australians back into the country. Jobs depend on it.

Australia must commit to reopening the border to all other temporary migrants, including business travellers, tourists and other visitors. There is no time for delay. We can’t let skills and labour shortages create bottlenecks that hold back Australia’s economic recovery. Job vacancies have risen to be 50 per cent above the pre-Covid period.

As economic activity rebounds, there will be opportunities for Australians who are out of work to find a job, but with a workforce shortfall of over half a million workers we will also need to rapidly draw in critical workers from overseas.

Skilled migrants are good for business and are also good for our wider economy, they deliver the new ideas and technology that we need to transform and modernise our economy, build new ­industries, and create new jobs for Australians.

The same urgency applies for bringing back international students. The number of international students in Australia has halved since the pandemic began, and some 140,000 student visa holders remain overseas.

With deadlines for enrolling new students looming, and the first semester starting in February, we need to move quickly to make offers and welcome students back. We are already seeing some of the world’s best and brightest abandon Australia and turn to our competitors overseas.

Business remains committed to supporting the national effort to manage the pandemic: implementing Covid-safe measures; rapid antigen testing regimes; and supporting national vaccination efforts. And business will also be instrumental in supporting the rollout of booster shots through workplace vaccination programs.

As we head into 2022, the nation faces a choice. We can be overwhelmed by fear and put the shutters back up, which would stall our economic recovery – or we can learn to manage uncertainty and get on with powering our return to stronger economic growth. The sooner we do this, the faster we can get back to being the kind of country Australia is renowned for: confident and open to the world with living standards that are the best in the world.

Jennifer Westacott AO is chief executive of the Business Council of Australia.


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