Image: Scientia Professor John Piggott AO, CEPAR Director This article is republished from BusinessThink. Read the original article. feauturing John Piggott, Director of The ARC Centre of Excellence in Population Ageing Research (CEPAR), and Leisa Sargent, Senior Deputy Dean of the UNSW Business School
Some states are reopening from the pandemic shutdown, and more Australians are heading back out onto the streets, filling up cafes and restaurants, increasingly driving to school, shops and even trickling back into the office. But what impact is the easing of coronavirus restrictions having on health and the economy, and importantly, what are the key elements of a successful and effective post-pandemic recovery?
UNSW Business School's Scientia Professor of Economics John Piggott, Director of The ARC Centre of Excellence in Population Ageing Research (CEPAR), and CEPAR Research Student Nicole Ee, a Psychology PhD Student at UNSW Sydney, are among a group of experts convened by the Group of Eight (Go8) universities taskforce 'Roadmap to Recovery'.
The expert taskforce developed an independent, evidence-based report with a set of actionable recommendations for the government on responding to the challenge of recovering from the pandemic shutdown. The report Roadmap to Recovery A Report for the Nation suggests a reasonable balance between maximising the safety of populations, the protection of the economy and the wellbeing of society.
BusinessThink recently spoke to Professor Piggott, Ms Ee and Senior Deputy Dean of UNSW Business School Professor Leisa Sargent, to discuss the roadmap to recovery and how this will impact society and business.
What is the first step towards recovery?
Where does one begin planning a roadmap to recovery? According to Prof. Piggott, the first step is to remember that Australia did not experience a full shutdown as many other countries did.
For example, New Zealand entered a level three lockdown on 23 March, meaning non-essential businesses were closed, discretionary domestic air travel was banned, and all events and gatherings were cancelled. It then progressed into a level four lockdown a mere 48 hours later - in line with a stricter approach dubbed the 'eliminate' policy.
But Australia only had a partial lockdown. "We've had a partial shutdown around two important domains: it's been around gatherings, and it's been around mobility," says Professor Piggott, who suggested that these two elements will be key to the beginning of economic recovery.
Just how vital is migration to Australia's recovery?
Australia relies very heavily on migration, and migration ties in jointly with education, explains Prof. Piggott. "If you think about a lot of our exports – especially people based exports like tourism, education, business services – those exports require our borders to be open, and open in a reasonably efficacious way, not open in a way that requires two weeks quarantine every time you cross the border. And it's going to take some time before that can be done safely," he says.
Agreeing with Prof. Piggott, Prof. Sargent says a successful economic recovery will also largely depend on people's movement and sensibilities around physical distancing. "It's about staying connected to people... It's also about making sure people are spending again, going out and taking local holidays, recovering from what I think it's been a period of being quite separate from the world," she says. "It's a great opportunity for people to be thinking about how we get business back on track."
So the recovery may also depend on the extent to which people and government take this opportunity to support and reopen businesses that have been partially shut down, with consideration given to helping them get back on their feet.
While CEPAR Research Student Nicole Ee, says that a successful and effective economic recovery will rely on a supported and graduated return to normalcy in travel, work and business, along with facilitation of innovative new modes of business operation during the recovery period.
In summary, she says the three elements needed for this to occur are:
1. A successful and sustained flattening of the curve, involving early detection and isolation.
2. An eventual safe resumption of international travel and tourism through special bilateral relation arrangements, and the development of immunity testing and in-country quarantine procedures.
3. Availability of accessible support for business to continue and increase operational and productive capacity, despite disruption from COVID-19. In particular, incentives for new and innovative employment and working styles that cater to emerging needs need to be provided.
Understanding who is most vulnerable
According to Prof. Piggott, a recovery plan must also address the vulnerable groups in society that have been hit hardest by the pandemic. "The first is young people who are starting in their careers and are now being tripped up. You start working at a professional organisation, and six months in or 18 months in, suddenly you're on three days a week. That's a really negative thing to experience early in your career," he says.
Another vulnerable group are workers in or over their 50s. "It's reasonably common knowledge that if you are thrown out of employment at the age of 55, you've got much less chance of coming back into the labour force than you do if you're younger… the rate of long-term unemployment is much higher for people above the age of 55," explains Prof. Piggott.
This means more people will potentially drop out of the workforce altogether and retire early, minimising their chances of saving for retirement. "Imagine you're 55, the kids have just left, and you're really looking forward to the next 10 years being the decade where you can save a lot… now you're out of work and will have exhausted your superannuation by the time you're 65 or 66. You'll be someone who lives the rest of their life on the age pension. That's a very different life trajectory from the previous one," says Prof. Piggott.
Women, especially those with young children, are another vulnerable group, notes Prof. Sargent. "They've had a double duty of working remotely in many circumstances and also having to homeschool", she says.
"It affects women more than men. It affects, I guess, both parents in terms of their mental health, but it also affects their productivity. They're much less productive if they bring up children and have children around the house as well," agrees Prof. Piggott.
It is also important to remember the occupational health of those who are more exposed to health risks than economic risks: "maybe even someone who works in a checkout capacity at a retailer,” he adds. “If you look at these kinds of job, there are a lot of mature women. So, they're once again more exposed than other groups to those sorts of risks."
So, going forward, attention to all the above will have to play a crucial role in Australia's path to recovery.
But what is the longer-term impact?
Some say the pandemic has meant Australia now faces a once-in-a-lifetime opportunity to rebuild and reshape the economy for the better. In contrast, others are confident that flexible working is here to stay.
Prof. Sargent says there will be "permanent flexibility" and "an opportunity for more satisfying lives", but this means people will have to think hard about what it means to work, the design of work, and the quality of working life.
"Many people have been on a steep learning curve, and I think we've got to make the best of that with us going forward, and leaving the so, so technology and outdated management processes behind," says Prof. Sargent.
Professor Piggott also observes that "we've brought quite a lot of the world forward, maybe 20 years from now or 10 years from now, this would be happening anyway. But actually, we were going through a crash course."
"The future of work is now. We got to a technology-mediated workplace very quickly and in a transformative way, and we were still getting our heads around that, to be honest," adds Prof. Sargent.
"Businesses need to be careful investing in enterprise platforms and managing in more inclusive ways."
For more information, contact Professor Leisa Sargent, Senior Deputy Dean of the UNSW Business School, and UNSW Business School's Scientia Professor of Economics John Piggott, Director of The ARC Centre of Excellence in Population Ageing Research (CEPAR).