THE ECONOMIC IMPACTS OF COVID-19

Professor Gigi Foster is Director of Education at the UNSW. She received her BA from Yale (majoring in Ethics, Politics, and Economics) and her PhD in economics from the University of Maryland.​ Professor Foster’s research interests and contributions lie in the areas of education, social influence, behavioral economics, and the multi-disciplinary analysis of human behavior in groups. Professor Foster is also active in the Australian media, particularly in regard to matters of education policy and economic thought.​​ On 29 April 2020, Gigi Foster joined Dr Tanveer Ahmed in a discussion of the economic and psychological effects of the COVID-19 pandemic. The discussion was filmed for Youtube broadcast and later also broadcast on Sky News Extra.

THE ECONOMIC IMPACTS OF COVID-19

 GIGI FOSTER

It’s a great pleasure to be back at The Sydney Institute giving another speech about a very relevant topic today – COVID-19. I want to emphasise that what I shall be talking about it is not just the economic impacts of COVID-19 as a health phenomenon but also the economic impacts of the response to the global crisis of COVID-19. Economically, what we have done in response to the virus is in fact more of an issue than what the virus has done directly to us.

I can start by saying that the costs of the worldwide economic lockdown that we have seen, are increasingly obviously stratospheric. China’s GDP has gone backwards by something like 7 per cent in the first quarter of 2020. US GDP is expected to fall by 3 to 8 per cent in 2020. In Australia, the projections are for somewhere between a 5 and 6 per cent fall. And that’s just in terms of GDP figures. The Guardian even, in mid-April this year, predicted that the pandemic could have profound and potentially long-term impacts on mental health and my co-presenter today is going to be talking a lot about that.  So, I will touch on some of the economic effects in terms of mental health and human suffering that we’re expecting to see because of the global response to COVID-19.

In a policy brief published also in mid-April, the UN offered a very disturbing set of findings on children with regard to the impact of COVID-19. The study mainly focuses on schoolchildren’s lack of ability to go to school and the deeper poverty into which they have been thrust, particularly in the developing world. I will emphasise during this talk that the main impact economically of the lockdowns that we have seen around the world is on the most disadvantaged people of the world. In developing countries, this impact is going to be huge, including things like famines. Within Australia, however, in the short run what kind of effects should we expect?

It’s very likely, based on early signs in the data that we have, that domestic violence is going up, mental health is deteriorating, and physical health is threatened by delays in health care and checkups for all sorts of maladies other than COVID19. And, obviously, incomes have been threatened. Casual and temporary workers will be hit most, as we know. The Jobkeeper payment is there, and it’s contributing to keeping people’s incomes afloat but it does exclude large sections of workers and we’ve seen hundreds of thousands of workers going onto  unemployment in the data in recent times.

Of course, the higher education sector has been heavily affected because of our extreme dependence on international students’ fee revenue, which I’ve spoken about here in the past. We would expect to see the hardest-hit workers to be in industries affected by the travel bans and other sorts of lockdown measures including in industries like retail, hospitality, travel and the performing arts. If you’re a performing artist, you can’t give a concert if people can’t come to the venue. We’ve seen, and will continue to see, businesses going bankrupt. Those businesses that have a little bit of slack already can withstand this sort of crisis more easily than those that were operating closer to the red zone with smaller margins. It’s the mom-and-pop businesses, the small businesses, the little entrepreneurships that I would expect to see hit most, with the bigger companies coming out possibly with higher market share at the end of this.

In the medium run, one important fact to bear in mind is that recoveries do not come quickly. Recessions aren’t “V-shaped”, as they say, so I would expect that the recovery will take us months if not years to actually fully realise. This will be due, mainly, to destroyed business links both within Australia and between Australia and those companies in our overseas trading partner countries. In the longer run, what we are seeing right now of course is some degree of impact on our children because of missed or lower quality education. Then there is the withdrawal of children from overseas universities as well and that will have impacts for a very long time on the cohort I’ve called the coronavirus cohort.

There are also going to be longer-run impacts of the domestic violence and higher child abuse and neglect. This is happening already because people are trapped in dysfunctional families. That will have long-run impacts for the lives of those people. Of course, there are also going to be longer-run impacts on healthcare. This is healthcare that would have taken place and prevented future illnesses were it not for the laser focus of the healthcare system on the COVID-19 projected infections and deaths. All of these effects are regressive. And they are all going to impact more on the disadvantaged members of our communities.

So, let’s look at the big picture of what economic activity is all about. Economic activity supports life, it supports human wellbeing, it supports longevity. It is about human welfare. I am one of those classical economic philosophers who believes that the point of having a functioning economy is not to have profits, it’s not to have lots of money, but it’s to have good outcomes for people in terms of human welfare.

Over many decades of study, it has been found that GDP per capita is the biggest predictor of human welfare, longevity, and good outcomes for people over history. That’s why GDP per capita is something to aim for. It’s not a perfect measure but it’s a rough guide to how well the country is doing and it’s the reason why we would prefer to be born in Australia today than in India, for example. Governments in high-income-per-capita countries collect money from the private sector to spend on investments like research and development, hospitals, schools, support networks for victims of domestic violence, and mental illness. On roads, on consumer safety commissions, and many of other activities that support the happy, healthy lives of their citizens. This is why income per capita is a good thing. This is why governments have a role.

When we don’t have as much GDP, when we impair our ability to spend on things other than COVID-19, we take away a little bit from all of those other categories of spending, potentially now and potentially in the future, to the extent that government spending on those other things is crowded out. It’s an open question whether the government today will continue to be willing to just print money essentially to finance those other kinds of investments. At the end of the day, you need to have economic activity to keep a country going forward, to support a reasonable quality of spending and quantity of spending by any government.

So, we do need to get the economy back working again so that our government can continue to spend on things that support our happy, healthy and long lives. Recessions are bad because there is idle capacity sitting around in an economy that is not being used to a productive purpose and generating income which then of course feeds that machine. The Australian government is trying to compensate the idle capacity of labourers who have lost their jobs by massive fiscal stimulus programs like JobKeeper. But the government cannot compensate perfectly for the losses that these workers have felt. There is just too much pain, there are too many different kinds of losses and too many little nooks and crannies and losses going forward for the government to be able to create a Band-Aid that fixes that problem fully. Again, it cannot make money forever. Eventually, you need real economic activity to soak up the money that it spends.

Now, a quick review of how economists think about the value of what we’re trading off in policy decisions like the one we have been facing the last couple of months. There are a number of measures and these are well-known to health economists. Perhaps less well known for lay people who may be watching this podcast or even to non-health economists are the following. The first is the value of a statistical life. The idea here is if an individual, for example, is willing to pay $5 to reduce her chance of dying this year by 1 in a million then her value of a statistical life is that $5 divided by 1 in a million, or $5 million. The VSL estimate used in calculations by consumer safety commission is in regard to things like speed limit setting. Optimal speed limit setting is generally somewhere between $2-$11 million per life.

Now it’s not nice to put a number on lives, a dollar figure, it’s not comfortable, we don’t like it. But, at the end of the day, because we live in the world of scarce resources, somebody’s got to put a figure on that in order to come up with a policy setting, for example the speed limit. At one stage, somebody said only an economist would ask the question, “what is the optimal number of dead babies?” It basically means what’s the optimal number of babies, who will die when you have a speed limit above five kilometres per hour. But you also don’t want to impede economic activity to the extent that it would be if you set the speed limit at five kilometres per hour. So, you have to balance these concerns. Any economist approaches a policy question like this by thinking in terms of trade-offs.

Another very common currency for the value of a life is the quality-adjusted life year, or QALY. In this currency, a year of perfect health is worth one QALY, and less than perfect health is worth less than one. Death is considered to be equivalent to zero, although some health states might be considered to be worse than death, and might have a negative value. Typically, in studies around the world, a value of somewhere between 100,000 and 150,000 per QALY is used. This is used by governments in health ministries when deciding via cost benefit analysis how much money to spend on different types of investments that may support health. We have to do this because we have a limited envelope to spend on every disease and illness that may affect mankind. How much goes to cancer versus how much goes to heart disease versus how much goes to disability support, those are decisions that are wrenching and very difficult and fraught philosophically, morally and otherwise. And we need a currency with which to grapple with those problems, and the QALY is the most commonly used one.

One thing has been striking in this debate in Australia about how to approach the COVID-19 crisis is that I haven’t seen estimates from the government in relation to QALYs. How many QALYs are being saved and how many QALYs are being sacrificed by our policy settings? That is exactly the sort of currency that one would expect for this discussion if it were done in the same way that we typically discuss preservation and supporting of life.

There is another basic unit of analysis, a newly suggested one on the scene. It’s called the WELLBY and it essentially allows us to analyse and capture unhappiness effects such as stress due to unemployment, financial strain, or increased risk of domestic violence. In this currency, one point of change in life satisfaction for one person for one year when measured on a 0 to 10 scale is a WELLBY. As a rule of thumb, the average year of life in a richer country is worth about six WELLBYs because we have a reasonably good quality of life in richer countries. It’s less in poorer countries with lower qualities of life. And then a whole life would then be worth, you know say it’s 80 years long, something like 480 WELLBYs. That then allows you to develop an understanding of what is being sacrificed when we inflict the suffering that we’ve seen under the economic lockdowns.

I won’t go into specific numbers about what the currencies that I’ve just discussed would indicate have been the costs for Australia of the lockdowns. Suffice to say, they have been pretty substantial in my back-of-the-envelope calculations. They’ve been also suggested in the media and increasingly talked about as something we should be considering when moving forward in the policy directions.

Basically, the method would be, in evaluating any policy, to discuss what are the options. The option we have right now is not the one we had two months ago. We do not have the option of not having a lockdown at all. Our decision now is do we continue it or do we end it, for example, a month earlier. To decide that, one would ask how many statistical lives in Australia would be sacrificed by keeping the lockdown in place compared to how many lives would be saved for example from COVID-19 deaths were we to keep that lockdown in place for the extra month. As I say, my back-of-the-envelope calculation indicates that we should have this discussion. It’s not obvious at all.

In closing, to get some perspective, the number of deaths per day in Australia is something like 300. We’ve had 75 or so people die of COVID-19 over the past two months. This is about 20 per cent of the number we typically lose in a day. Even if we were to have followed Sweden’s path which has had something a little under 2,500 deaths so far, scaling up to Australia’s population that would have seen us lose something like 7000 people. That’s still very well within the range that we would have expected over a couple of months’ period.  All but a handful of these deaths have been in people over 70 for whom the quality adjusted life years remaining is reasonably small, and negative effects on balance have been felt by the younger generation which is why I’ve described this elsewhere as a massive cost shift from the older people to the younger people in our society.

We’re making promising strides already in treatment. I’m very confident. The entire world is focused on this so we’re going to see treatments, possibly a vaccine but certainly treatments that lessen the fatality rate from this disease over the next three to six months. This will also reduce the stress on our healthcare infrastructure. The measured lethality of the virus already varies a lot between countries.

There are many things we still have to understand about the virus including its sensitivity to geographical and cultural factors, and I’m sure we’ll be learning a lot about that as we move forward. But I would ask if a second and more virulent wave of this virus does emerge, in our winter for example, I have to wonder whether a strategy more like Sweden’s, which may not be directed towards the creation of herd immunity but has the side effects of producing a lot more exposure to the virus and therefore some potential immunological defense against it, might have been a better approach for Australia.

ECONOMIC AND PSYCHOLOGICAL IMPACTS OF THE PANDEMIC – DISCUSSION – GIGI FOSTER, TANVEER AHMED & GERARD HENDERSON

Gerard Henderson: Thanks Gigi and Tanveer for a great presentation.

I thought I’d start first on the topic that Gigi raised about the disadvantaged and then go briefly to the topic that you raised about dignity. It seems to me that if you look at particularly ABC programs where people go on air with commentators [not you Gigi on Q&A the other day], but people who say we’re all working at home without realising that most people are not working from home. They may be at home; they may be at home minding children. But people who are doing cleaning, driving buses, building buildings, constructing roads they’re not at home. And many of those who are at home don’t have computers. And many people who have computers don’t have as many computers as they have children. So, it seems to me that, necessary though the social distancing provisions are, they do seem to hit very heavily at those who are not in professional employment.

Gigi Foster: I completely agree. And the point about children is particularly important. The fact that we’ve closed schools or strongly encouraged children to be learning online

means that not only do the children in the more disadvantaged areas go into an environment which is arguably less supportive of their learning than at school but they are also underfoot and need to be cared for by members of our labour force who, otherwise, would be more productive. I would definitely say that’s a regressive and, you know, a highly damaging impact of the school closures. If we were going to take one step towards opening up the economy, the first one we should take is to put kids back in school.

Gerard Henderson: Tanveer?

Tanveer Ahmed: You often hear it said, we’re all in it together and the virus doesn’t discriminate. But I do think there are class and socio-economic dimensions to the virus. It is not necessarily something we’ve seen specifically but it’s just straight out in deaths. One thing I didn’t talk about is that men are three times more likely to die of coronavirus. We think that’s linked to immune systems. If you look at a place like New York, the biggest impact was in Elmhurst Hospital in Queens which had the highest number of deaths. People coming in were often the essential workers. They were the ones driving the taxis, they were the ones on the tube, the subway, they were the ones still out in the world interacting with people and far more likely to be exposed to the virus. So, from the point of view of death from the virus, I think there is a class dimension. What Gigi has said is absolutely true and this is something I’m saying regularly. It is parents coming with children on the autistic spectrum  who are trying to teach them from home. There is certainly a middle class component, people who don’t necessarily see the disparities if they are in an office job and so on. They think everybody’s got great internet and can do a job from home. That is just not the case and I think that’s flowing through this debate about the school closures.

Gerard Henderson: Now you didn’t mention this in your talk but your practice is in Western Sydney.

Tanveer Ahmed: I work primarily in Blacktown in my private practice. I have a public component in Bankstown in Southwest Sydney. And then I also work in the CBD which is more legal, insurance, and such matters.

Gerard Henderson: So you’ve got a pretty good grasp of differing levels of economic achievement which you’re dealing with. Well let’s now go to the issue of dignity. Both of you mentioned the Spanish flu of 1918 and mainly 1919 in Australia. The estimated deaths were 15,000, 12,000 as the official figure but some weren’t accounted for. So, let’s

say 15,000 in Australia. If Australia had the current population then that it has now that would be about 75,000 deaths. But it was a different society as well if you look at dignity. It seems to me now that, to some extent, you’ve got a division between those who have

permanent employment or very secure employment who have one view on social distancing and those who have insecure employment or casual employment who have another view on it. And it’s notable that whilst the public sector was pretty small around 1919 it did run across various professions. You had professional people in the public sector. You had a lot of workers in the public sector as well. But as the public sector got privatised over a century later essentially now the public sector group is a professional group. And those who are in lower level employment, by and large, are not in the public sector. So how do you see that kind of clash between those in secure employment, those in unsecured employment? Do you notice anything different in your practice with that kind of group or you don’t?

Tanveer Ahmed: It is still early days but I guess what you’re alluding to is one of the big fault lines of modern politics the divide between the “anywheres” the “everywher”, and that sort of “somewheres”. You have a growing professional class or knowledge worker who’s increasingly distant from the aspirations and experiences of, say, our suburban worker often working in the private sector or casualised employment, shift work. The most obvious thing is the latter group has much greater economic insecurity. And there’s a much bigger desperation for them to go out to work when their work has probably an element of greater risk because they’re dealing with the riff raff if you like. They’re dealing with the public and they have less control over who comes face to face with them or stands close to them. In terms of the trade-offs in the economic debate over the easing of restrictions, that group is affected the hardest. For the professional group, many of them will be working from home where their biggest whinge might be a slow internet connection when trying to do teleconferences on their computer. There are frustrations in working from home. I don’t doubt it for a second. But the same level of potential desperation and potential lack of funds, of work and a much greater desperation about the future is not as apparent in the professional classes.

Gigi Foster: I totally agree. I would just add that there is an age dimension to this as well because it is more likely that a casual worker will be younger, and also since younger people have a lower risk of death from COVID19 they are looking at different odds. When they think about going back to work their risk is much less at 20 than at 60. And the 20-year-old is more likely to have a casual position or be precariously attached to the labour force. This also begs the question of the longer-run impacts on that generation and on Australia’s industrial mix going forward. Where are those workers going to be soaked up from?

We’ve got almost a million people who have been applying for unemployment benefits. and we’re not going to bounce right back from this. Those links that have been severed between employers and employees and between supply chain members all across Australia, overseas and whatever, those are going to take a long time to rebuild. It takes a long time to re-find partners to trade with, to produce with.

This could be an opportunity for Australia to decide what it wants to be in five years, where it wants to be industrially and to figure out how to soak those workers up. And one option is what Tanveer spoke about, of trying to get some of those semi-skilled or unskilled workers who have been thrown out of a casual position, a more labouring type position perhaps, to have them transition into some of the occupations we know that we need. And we’re going to need more workers in aged care support, nursing, teaching, the caring occupations, the “pink collar” work force.

Gerard Henderson: If we go to the figures you gave at the commencement of your talk, about the drop in gross domestic product in China, Australia, , the United States and elsewhere, you’re implying that this unemployment, particularly for younger people and older people, is going to take a long time to go down.

Gigi Foster: Absolutely.

Gerard Henderson: And it looks even grimmer perhaps than the latter years of the 1930s.

Gigi Foster: One of the things that saved us from the more extended depression at that time was of course the Second World War. Let’s hope that we don’t have such a life raft this time around. But one of the lessons we might draw from that period is in fact the kinds of fiscal stimulus directions that the American government pursued at the time. The New Deal policies which soaked up a lot of labour. That was the whole point of a lot of those programs that produced infrastructure like the Hoover Dam. Some of it’s never been replaced. The Australian government could potentially, instead of just handing out money to people in a temporary way until September when supposedly the payments stop and people are going to be that much more insecure financially and otherwise, could embark on a more proactive strategy to grow certain sectors of the economy through hiring those kinds of workers to produce infrastructure that will be with us for a long time.

Gerard Henderson: But there are no easy solutions there either, as you know, because in the United States in 1938 you had a second depression which in Britain and Australia we didn’t have. We had a gradual recovery, in the United States there was a recovery and then a second depression in 1938, then the war commenced for the US around the end of 1941. If you’re putting people into government jobs they have to be paid for by the government, don’t they?

Gigi Foster: It’s not ideal but it’s a way to at least try to use the opportunity that we have now. As you said this is going to be a long recovery. The government has to do something or else we shall have a lot of suffering in this country and I am a supporter of the Job Keeper program. I am a supporter of the idea that one should engage in Keynesian stimulus when there’s a recession.

Tanveer Ahmed: Do you mean like a New Deal or something equivalent?

Gigi Foster: Something like this, right. And you’d have to think about where we want to take the economy. There are a lot of options on the table and it’s a once-in-a-lifetime, once-in-a-generation chance to take some serious action by the government that will help spur the economy in a direction that the private sector will then hopefully come in and be able to compete in towards comparative advantage in Australia, towards the areas where we should be producing more. I don’t know whether it’s going to happen but I’d love to see some discussions about that.

Gerard Henderson: Earlier in your talk you spoke about people with anxiety were handling this better than might be expected because they were sharing the anxiety with people who haven’t previously had any anxiety. But the impact of long-term unemployment on the kind of people you see day to day, both whether it occurs in the CBD or the suburbs where you work a fair bit of your time, that would be pretty grim wouldn’t it?

Tanveer Ahmed: One aspect of Western, particularly Western, mental health was partly a luxury good. This was where we had a lot of people kind of going, “Oh what’s the point of my life? How do I be totally fulfilled in all my aspects of life?” The pandemic is clarifying purpose and people are going back to essentials, the Maslow hierarchy of needs. We see that in the corporate sector too. Suddenly the banks aren’t worrying about whether they support gay marriage or not. Or the millennials are not worried about whether their job reflects their values adequately. They just they need a job. And the bank needs to function like a bank. So, some of this is clarifying purpose.

There’s no question you’ll get different kind of layers, even in mental health. But you’ll get much more practical components to mental health. For people without jobs, the economy needs to supply the jobs. If someone’s you know depressed because they don’t have a job, there’s a very good reason. There’s no number of tablets to fix that problem.

We can help people adjust to it and solve problems but in the longer term anyone unemployed who would traditionally have a job in a well-functioning economy, will be twice the risk of suicide. That’s very significant. In modern Western societies there has been a component of the unemployed that exists on that long-term unemployed welfare dependence. There’s been a component of that and part of that is possibly a luxury good too. Poorer countries most certainly do not have that luxury. But in terms of the effect of unemployment, the loss of purpose, all these dreams collapsing, there’s no question that will have a short-term mental impact which, ideally, can be mitigated. That was one of the key points I wanted to raise. You can have several countries with similar economic impacts but the difference between them lies in their health and social safety nets and what government policy can actually mitigate significantly in terms of the social or mental health impacts.

Gerard Henderson: So you’re suggesting that pronoun awareness is on the decline?

Tanveer Ahmed: Well elective surgeries are back, almost.

Gerard Henderson: Coming out in the economy, you’re talking about big government initiatives which the private sector may latch on to. But that’s going to be hugely costly.

Gigi Foster: Oh yeah.

Gerard Henderson: So how does the borrowed money ever get paid back or doesn’t it matter?

Gigi Foster: It depends on whether you’re in the more classical monetary theory camp or the modern monetary theory camp. But one thing that those two camps agree about very much is that the amount of money circulating in the economy needs to be calibrated to the amount of economic activity happening in the economy. At the end of the day, the goal of the policies we’ve set now has got to be to get the private sector back on its feet because the private sector is the generator of so many jobs and so much progress in society.

Now the private sector indirectly supports government spending, as I spoke about in my talk, and it’s that government spending that creates the kind of social support network that enables us to have long and happy lives while Australia has luxury problems like whether or not somebody wants to be a he or a she or a whatever else. We generally consider ourselves lucky in Australia. And it’s this partnership between the private sector and the public sector which is a feature of a successful, thriving society.

What we want in the future is not a lot more public sector nor really a lot less presence of the public sector. We want that combination of public and private activity which supports Australia’s prospering in the future. Of course, that does mean right now we’ll have to have a lot of public expenditure because the private sector is looking at bankruptcies, the destruction of links, all these things that have happened. There is a role right now for a larger amount of government activity which hopefully, within five to ten years, will have been sucked out by the private sector.

Gerard Henderson: But in the meantime, if there’s no work around, employers can’t keep workers on even if they’re getting government subsidies because there’s nothing for them to do except stand in the corner.

Gigi Foster: Paint rocks.

Gerard Henderson: A lot of the businesses who closed down will have a great struggle reopening. Let’s say there’s a government funded zoo. If they have to lay off some staff they can always bring them back on. But with a private zoo, if you lay off staff the chance of getting them back is very grim.

Gigi Foster: Absolutely. This is the destruction of links problem. Once that company goes under, all the links it had to the workers are destroyed. Then those workers are floating out in space, they’re idle capacity. The owner of the business is idle capacity. His capital is idle capacity and it has to be re-absorbed somehow. The government can help that process along by financing, underwriting, subsidising some kinds of activities in the short run. That’s part of what Keynesian stimulus does.

Gerard Henderson: I might just conclude – flashing back a century, I’m not an expert on the Spanish Flu. But I’ve read a bit about it. It looks as though the newspapers at the time kept going. In Australia, Australian Rules Football kept going for a whole season. Rugby League kept going for a whole season. Some of the cinemas closed. But it seems that people accepted what was happening much more than their governments are prepared to accept on their behalf today. So, Tanveer, does that tell you anything about the change in society or is it that we just know more about medicine? Because, if you look back to the literature of the time coming out at the end of the First World War, there were people put in isolation if they came to Australia and all that, but the economy seemed to go on. It seems to me that far less was closed down than we’re talking about a hundred years later.

Tanveer Ahmed: That is just a marker of how prosperous we are, how entitled we are and our expectations. And that overlaps with Gigi’s debate about life years. The modern Western economy, particularly in a place like Australia, has little tolerance for that. It’s partly why governments have, you know arguably, in some areas possibly overreacted. I think we just live in a very different time of extreme prosperity and also we have very little contact with death. Death is probably a lot more frightening than it was a century ago and it was a lot less visible than it was a century ago. That is another factor here in terms of the types of responses we’re seeing.

In poorer parts of the world you’re not seeing quite the restrictions. Take Bangladesh, which is my birthplace, where the number of deaths is possibly thirty times higher, it’s something that just happens in the background and the government cannot afford to shut the economy down too much. So, they take the hit of so many deaths. I don’t think a society like Australia could tolerate that.

Gerard Henderson: In conclusion, and we can finish on your own comment on this, what Tanveer is saying is that the more prosperous the economy the more you’ve got to close it down.

Tanveer Ahmed: We can actually afford to do this.

Gigi Foster: Death is a reality. And implicitly we do make these decisions all the time, every day in our departments of health, at the federal level and the state level. These decisions happen. The fact that the Australian constituent wants to put his head in the sand and say no, no there is no trade-off in the world between lives, that is a problem that hampers our ability to have these discussions openly. It holds back our political debate.

I believe we should be pushing for those discussions, as morally wrenching as it may be, and point to other countries, developing countries, where they have to have such discussions. They recognise how important the economy is and they have to make some hard choices. One of the reasons that politicians have moved in the direction they have, a big reason, is not that they initially were the ones leading the charge towards lockdowns but because the public was so scared, particularly in developed countries, so scared by reports on the media, by images of body bags in the streets of Italy and this notion of ICUs overrunning and nurses falling over. It’s very scary. We didn’t have that kind of media back in 1918-1919 and we didn’t have the luxury of stopping economies. It’s been this fear reaction that the politicians have been forced to recognise in their moves toward lockdown. There was an extremist area here which has cost us lives.

Tanveer Ahmed: Just a final practical point. The most prosperous countries also have the most aged populations. That is a practical consideration here. They were also the most vulnerable.

Gerard Henderson: Well many thanks to both of you, in particular for not using the word “conversations” and talking about “discussions”.

Tanveer Ahmed: Or “unprecedented”. Nobody’s said that today which is great.

Gerard Henderson: And we’ll love to have you back when we’re out of virtual reality and back at The Sydney Institute. But for tonight thanks a lot. Well done.