Phil Ruthven AM, Founder and CEO
How can we find a balance between economic and public health in a pandemic?
Setting the Scene
Over two calendar years Covid 19 has become a fearful, daily obsession for Australians enduring this fast-moving second (Delta) wave of infections. So, it’s time to take a look at what’s to come, and what the statistics are telling us about living with this virus.
Over the past 20 months, on average, just under two Australians have been dying of Covid-19 per day, and a further 450 per day from other traditional causes. The deaths for Covid are undoubtedly tragic. Yet is it not time to question why that low – if not negligible – death rate is causing such fear and panic in our communities and amongst our politicians, in comparison to the other 450 daily deaths?
This is particularly important, given that the overwhelming majority (90%) of deaths in Australia over the past 20 months has been with people over 70 years of age, mostly in aged-care facilities, overwhelmingly with pre-existing and serious health conditions, and now, mostly unvaccinated. A quadruple risk profile.
The fact that we are currently experiencing over 2 deaths per day in September 2021- indeed nudging double figures on several occasions – as we were in the first wave in 2020 (then mostly in Victoria, now mostly in NSW) does not alter the miniscule proportions of COVID 19 deaths over the course of a year, nor the vulnerable sector of the population as mentioned above.
Daily reports of this pandemic on a 24/7 timeline – by our health officials, politicians and media – seem to doom us to a dystopian future of lockdowns – forcing us to surrender many of our freedoms and the joys of living. So, should we begin to question if these considerable sacrifices are worth a daily average death rate of two people, being just 0.4 per cent of all deaths?
That may seem callous, but as we learn, Covid 19 is causing disproportionately more pain beyond the daily death rates with scarred youth, ruined businesses, broken relationships and other tragedies. This newsletter is an attempt to restore some perspective to our frightened and increasingly frustrated population – across the world and exaggerated in our own country. And we’re going to examine the financial outlook in this Covid landscape.
We will begin with the world scene and then focus more heavily on our own country; an island-continent-nation cut adrift from the rest of the world in trade and people movement terms, not just by the geographic reality of being girt by sea.
The Global Scene
The world was unprepared for COVID 19 as we all know. The first exhibit overleaf puts the current pandemic in historical perspective.
COVID 19 is the third most impactful pandemic in 120 years; so, yes, it is serious. COVID deaths are nearing 5 million, the highest number of deaths since HIV/AIDS, beginning in the 1980s, but that number was spread over decades not the less-than-two-years as is the case with COVID 10. At least, so far. And of course, any comparison with the Spanish Flu from 1918 is alarmist: this virus is having nothing even remotely like the devastation of that 1918+ pandemic, largely due to 100 years of scientific advancement.
The next exhibit (below) shows the most affected nations with this COVID 19 pandemic among the world’s largest economies. It is a steep slope from Brazil – with deaths of 0.27% of their population to date – down to virtually insignificant levels as is the case with South Korea, Australia and China.
Australia has always been more fortunate than most other nations when global pandemics emerge. The main reasons are our location in the southern hemisphere when we are a warm and temperate climate at a time when the colder northern hemisphere nations are being afflicted by viruses and other nasties in their winter. Being an island helps further, as does being a rich country where we have the wherewithal in financial and health care terms to cope better than lesser developed economies.
Which leads to a more Australia-centric commentary on the COVID 19 pandemic
Slow to get our act together
Australia’s ill-preparedness has been similar to the unpreparedness of those with higher death rates. These problems centred on:
- Panic by some outlier epidemiologists, many politicians at federal and state levels, and the media – none of whom provided perspective to the public nor balanced the economic damage with tolerable or acceptable levels of death rates;
- Incompetent quarantine management
- Inadequate sourcing of adequate vaccines, and ham-fisted distribution;
- Excessive concentration on scary testing numbers (often well over 100,000 daily) and ‘positive case numbers’ versus the only meaningful data being deaths, which – as said – have been negligible in their own right and totally insignificant by world comparison;
- Knowledge of and response to long-term effects/disabilities from Covid 19;
- Draconian and unjustified measures of societal control via frequent, long, excessive and panicky lockdowns, curfew and border closures – given the negligible death rates;
- The loss of community, joys of living, human freedom, and the permanent scarring of younger people’s confidence, careers and lives of the sort only experienced in past depressions and world wars.
The associated damage to our economy and businesses from government actions is enormous:
- lost wealth creation (GDP);
- incursion of record peace-time government deficit spending and debt build-up;
- the closure of well over 100,000 once-viable businesses;
- the normal losses each year of 1 in 7 of the nation’s 2.4 million business enterprises; and
- the profit impact on businesses from lockdowns, curfews and border closures.
There appears inadequate balancing of business needs and their contribution to the wealth and welfare of the population with a very marginal increase in deaths.
Deaths in perspective
At first reading, the terms used above, being ‘tolerable’, ‘acceptable’ and ‘insignificant’ may seem insensitive if not callous. But death is part of living, and to treat one cause of death as more tragic than another is really where insensitivity enters the equation. And that is exactly what the public have been cajoled into believing. Hence the next two exhibits below set out to create perspective.
The first table reminds us just how the deaths issue has been blown out of all proportion; and reminds us that COVID 19 deaths are clustered into the elderly cohorts, as are all deaths anyway.
The next exhibit simply emphasizes, more graphically, the insignificant number of deaths from Covid 19 in Australia. Yes, if we had experienced the same global pro-rata deaths, we could have had around 15,000 COVID deaths (5% of all deaths) so far, but unlikely for reasons given earlier. More likely 5000 deaths (1.8% of all deaths). And would it have put pressure on our hospital ICUs, yes. And would that number have increased the number of deaths among the elderly? Unlikely, it would have simply replaced another cause of death for the aged in that cohort (90% of COVID deaths being in the over 70s).
And the next exhibit reminds us of the main causes of deaths in Australia. Had we have reached 15,000 deaths instead of 1100 so far, it would only have risen to a 6th cause of death. Temporarily. If 5000 COVID 19 deaths, then that would have been only the 15th most common cause of deaths. Temporarily.
Economic & Financial Perspective
We finish, lastly, with some economic & financial perspective, as detailed below.
- In 2021, Australia will spend around a tenth of its GDP on health or around $200 billion. That will equate to around to almost $8000 per capita.
- The extra spending by federal and state governments for responses to COVID 19 is expected to be around $350 billion over two or so years on health, job-keeper, business support and other initiatives.
- Our population around 0.33% of the world’s total of 7.9 billion is in stark contrast to our negligible 0.02% of the world’s 4.8 million COVID 19 deaths, so far. Less than one tenth.
- If we ever reach a pro-rata share of the world deaths, we would be looking at close to 15,000 deaths – highly unlikely in the immediate future.
- So even if we had ‘saved’ over 14.000 lives, it will have cost us $25 million per life ‘saved’, 90% of those being over 70 and mostly retired.
Pandemics always carry economic and financial implications as well as sociological in the management of the pandemic. Covid 19 is no exception. The damage to our economy is now starting to show as we head into 2022, the grim reaper is cutting a swathe through our small to medium enterprises (SMEs), and share markets are edgy.
Getting on top of this pandemic requires more information and perspective being provided to the public than has been given over the past two calendar years. Life does come with choices, trade-offs and a balance between the now and the future. We have not yet equipped our society with the facts and options for them to make these decisions in a less panic-driven environment.
There can be no argument with the necessity of the vaccination of some 80% of vulnerable Australians and the eventual achievement of herd immunity, or at least the containment of mutated variants with annual vaccinations as we do with flu variants. And limited curtailment of some freedoms occasionally until we have reached a vaccination level.
But most importantly, society needs reminding of the reality that death is a fact of life. It occurs in many different ways and in numbers always dominated by the elderly. And the decisions we make in that regard must be balanced by economic and financial realities, and with full regard to the future more than just the present. For ourselves and the coming generations, starting with our own dependents and loved ones.
Sustaining life at all costs comes at a price to subsequent generations, and these impacts are now becoming increasingly evident. We are currently living in a fear-driven environment which denies the fact that death is a daily reality: over 450 die each day in Australia. Yes, our Covid deaths are indeed tragic but it is time weigh what that price is to our society, our economy and general well-being.
Our earlier estimate of $25 million for a life ‘saved’ underlines this point. When does the cost become too high?