30 March 2020
These are grim times. People are dying by the thousands. The global economy is grinding to a halt. Australian businesses are closing and laying off staff. Recession appears unavoidable. Here in Western Australia, the McGowan Government has effectively sealed our borders in the hope of containing the deadly spread of COVID-19. Suddenly, we find ourselves isolated from the rest of the nation. The Government did the right thing in closing the borders to all non-essential travel. It will be vital for the economy, however, that our national borders remain open to trade -- assuming that we are able to do so with the highest standards of health and safety. As an island nation, Australia has plenty riding on the survival of global trade and the maintenance of supply chains in the months ahead. Right now we are seeing the Transport Workers Unions and the Maritime Union of Australia working with the State Government, stevedores and transport companies to keep all workers safe, while maintaining trade by sea, air, rail and road. The efforts of all union officials and everyone involved in this critical work should be recognised by the community. At a basic level, this will mean essential goods – medicines, food and equipment -- can continue to reach our shores. More broadly, though, as we prioritise the battle for the health of the community, trade can be the key to our economic survival. According to modelling by economists at Monash University in Melbourne in 2012, a complete shutdown of a country’s borders to trade would have a devastating impact on an economy like ours. These economists considered a scenario in which 95 per cent of goods trade in the US was suspended for 12 months due to a public health emergency like a pandemic. The result? A fall in gross domestic product of 48 per cent. Here in WA, we must do all we can to avoid such a catastrophic outcome that would cost thousands more jobs. WA is a state built on trade. Our exports account for almost half of Australia’s total exports. And those exports are dominated by our world-leading mining and oil and gas operations. The federal and state governments have already identified the $300 billion resources industry as being essential to lead the economic recovery from this pandemic. Despite the vast challenges it faces, the industry must continue to produce and export. Even as other crucial industries shut down and lay off workers due to COVID-19, the resources sector has the ability to continue to employ people and pay royalties to the state government. And it can continue to pay taxes to Canberra that will help to fund the multi-billion-dollar economic stimulus packages that have been announced in recent weeks and that will need to keep on coming. Importantly, the mining and oil and gas sectors will be able to continue to operate despite the recent state and territory travel bans. Companies have already taken drastic action to protect their staff. They have slashed the number of FIFO workers who normally travel to WA for work. Many workers on remote operations are now being flown by charter planes rather than commercial aircraft. Those who continue to work on site must clear a series of checks, including signing statutory declarations about their health. Every second seat on planes is being left empty to comply with social distancing guidelines. On site, meal times are being staggered and rigorous cleaning regimes are in place. As has become common across most industries, all non-essential staff are working from home. From images we’ve seen of FIFO workers at airports, the response of the industry is not perfect, but it is working to make it so. The industry’s decision on Friday to stop all FIFO workers from NSW from entering WA shows that it is taking the threat of COVID-19 seriously. It is gut-wrenching that some major companies in the industry have been forced to lay off staff. I share the concerns of the Australian Workers Union, which has called for all laid-off workers to be treated with respect and to be paid their full entitlements immediately. A rare snippet of good news was BHP’s decision last week to hire 1500 additional staff on six-month contracts to support its operations during this difficult period. These people will be employed in roles such as machinery operators, diesel mechanics, trades assistants and cleaners across WA, Queensland, NSW and Victoria. It’s also comforting to note that the iron ore price – a crucial barometer for WA -- has so far proved resilient, underpinned by hopes that China will spend massively on infrastructure and construction to revive its economy. China is already showing some early signs of recovery – this can only be good news for WA. When we do emerge from this crisis, many companies and industries will be well placed to ensure Western Australia recovers, and with us, the whole nation. In the wake of its coronavirus crisis, China will likely seek more clean and healthy food from overseas, benefiting Australian agriculture producers and exporters. The pandemic also presents an opportunity for a greater focus on digital trade -- such as paperless trading and digital trade finance platforms – to support the economic recovery. Many businesses will assess and improve the robustness of their supply chains. And Australian policymakers should ensure that we further diversify our trade, giving greater weight to emerging neighbourhood giants India and Indonesia. Our lack of diversification exposes Australia to economic shocks, as highlighted during this latest crisis. For now, though, we must work hard to survive the dark days ahead and plan for WA to again be at the forefront of Australia’s continued prosperity.This article was first published in The West Australian on Monday, 30 March 2020.
Authorised by Madeleine King MP, U 4-5 Chalgrove Ave, Rockingham WA 6168