As countries around the world continue to struggle to cope with the COVID-19 pandemic, Australia and New Zealand are among the very few countries which have been successful in containing the virus. On 08 May 2020, the Australian Government announced a three-step plan to gradually lift the restrictions saying that country has been “highly successful in flattening the curve”. New Zealand, on the other hand, after two successful weeks of the first phase of opening up, moved to alert Level 2, on 14 May 2020, aimed at reducing the risk of transmission. Both countries have experienced a consistent decline in the daily number of cases, showing a dip in the curve. After experiencing an early surge, Australia seems to have passed the peak, having avoided exponential growth in cases. New Zealand is effectively pursuing its strategy of ‘eliminating the virus’ having recorded no new cases for the past few days.
How Australia has handled the pandemic
The first positive case of COVID-19 in Australia was identified on 25 January 2020. The numbers increased rapidly since early March. As of 18 May 2020, Australia has recorded 7,060 confirmed cases with 99 deaths. The declared strategy of the Australian government was to ‘control and suppress’ the spread. Although Australia did not specifically state it as an aim but it is fortunately headed towards the elimination of the virus, as progress is clearly visible in “containment, capacity and recovery”. The country’s epidemic graph has been steadily declining since mid April 2020 but given the nature of the virus, it is difficult to predict if the trend will be sustained in the coming weeks as the restrictions are being lifted cautiously and gradually. While announcing a three stage plan for easing restrictions, the government acknowledged that as more people come out there will be outbreaks and clusters in the country.
As on 18 May 2020
Source: Australia Government, Department of Health
Certain factors have been crucial in enabling Australia to deal with the crisis relatively better compared to other countries. Firstly, the geographical location of the country is an advantage, allowing it to isolate itself easily from the rest of world, preventing the influx of a large number of imported cases. Besides, relatively younger population and less congested living in major cities have helped in implementing social distancing effectively.
Secondly, Australia’s health care system is one of the best in the world in terms of preparedness to deal with a pandemic situation. The universal public health insurance program, Medicare, is funded by the Federal Government. Estimated spending on health hovers around 9.5% of Australia’s GDP. In Sydney itself, there are an estimated 16,000 public hospital beds, and 6,000 private beds. As the outbreak started, health experts in the country expressed concern that public health systems could be overwhelmed in the event of a severe pandemic. However, coming together of the public and private hospitals, their coordinated response eased the stress on the public health care system. Since the outbreak number of ICU beds has also been ramped up in the country as has been the availability of protection kits and medical instruments. Australia’s coronavirus mortality has been much lower than in most of the European countries, most of which have smaller populations than Australia, but their population density is considerably higher.
The government also credited the improvement in situation to the rigorous and comprehensive testing preventing widespread of the disease. Australia has one of highest testing rate per capita in the world. As of 16 May 2020 Australia has conducted 1,015,652 tests for a population of 25.3 million people. The Australian Ministry of Health highlighted that as per the assessment of the London School of Hygiene and Tropical Medicine, Australia had one of the highest reported detection rates globally, detecting approximately 92 per cent of all symptomatic cases.
As the country is being reopened, to better trace and track the infection, the government has launched the ‘COVID Safe’ application, which is voluntary but the government has been encouraging Australians to download the app. Earlier, Prime Minister had ruled out any fear of privacy breach and possibility of the Commonwealth government department or agency having access to data. More than 5 million Australians have already downloaded the app.
Political and Economic Implications
The pandemic is giving new shape to geopolitical equations in the world. As the virus rages the world, tension between the US and China has been escalating. Over the past few days, Australia and China have also been engaged in ‘war of words’. Australia has called for a “transparent review mechanism”, an independent inquiry into the origin of the virus. China reacted to Australia’s demand calling it ‘politically motivated’ and it may lead to Chinese people boycotting Australian products. However, despite the Chinese threat of economic coercion, Australia has reiterated its demand for enquiry. Earlier, when Australia had imposed travel restrictions on China in February this year, the Chinese embassy in Canberra slammed it as ‘over-reaction’. On 12 May 2020 tightening trade barriers, China announced a ban on select Australian beef imports citing health certificate requirements and placed 80% tariff on Australian barley. China is the largest trading partner for Australia accounting for 24% of Australia’s global trade. An escalation of tension may result in Australia possibly losing billions of dollars every year. For long, Australia has avoided getting caught into a zero-sum game, trying to maintain a balance in its relationship with the US and China. The pandemic will make the balancing act much more difficult for Canberra. Australia has also spoken on WHO’s handling of the crisis, saying that it took a while to alert the world, and Australia probably would have been “suffering the same fate that many other countries currently are” if it was relying on WHO’ advice.
On the domestic political front, management of the COVID crisis has been kind of a political recovery for Prime Minister Morrison, who had faced much backlash for his handling of bush fires early in the year, which is fresh in public memory. The government’s efforts are largely being considered effective by Australians as reflected in Prime Minister’s approval rating gains of 20 points in April. He took certain bold decisions from the standpoint of a liberal Prime Minister, getting private hospitals work with public health care, asking schools to educate remotely, large companies working from home and converting hotels in quarantine facilities. Senator Penny Wong, Leader of the Opposition said one of the significant elements of Australia’s effective handling of the crisis has been “bipartisan consensus”. Although initially there were certain differences of opinion between the federal and state governments. It is praiseworthy that the government was able to form a national decision making body i.e. National Cabinet for COVID, overcoming the federal-state divide and also including members from the opposition party.
The pandemic is likely to bring changes in Australia’s immigration policy in the coming times, which may become more rigid. Historically, whenever Australia has faced economically tough situation, one of the steps governments have taken is to cut down on foreign migration to protect jobs in the country. Morrison government had unveiled a plan in 2019 to cut immigration to protect ‘the quality of life’ for Australians, further such measures may be announced post COVID. At societal level, social cohesion and multicultural ethos are facing a challenge; as instances of racial attacks against Asian Australian have been reported in the country. Prime Minister Morrison has condemned and called to stop such ‘deplorable attacks’.
On the economic front, Australia is facing the challenge of recession for the first time in nearly three decades. The government has announced a total economic stimulus of $320 billion, representing 16.4% of GDP, to cushion the impacts. The global nature of the shock is already evident in financial markets as the Australian dollar fell to 11% lower on a trade-weighted basis compared to what it was in early January 2020. The unemployment rate is likely to hit between 10-15%. According to the PwC estimates, pandemic related contraction in Australia’s GDP would result in an estimated loss of US$22,437 million. Sweeping consequences for the Australian tourism industry, a major contributor to the country’s GDP, is already visible.
Critiques have opined that Australia’s economic vulnerability has exposed the country’s reliance on China. Similar to other countries, voices pushing for self-reliance and looking inward are triggering, to make the country less dependent on global supply chains in the post-COVID world. As regards dependence on China, it would be wise for the Australian government to plan for diversification in its trade relations, improve local manufacturing sector and reduce heavy reliance on imports for consumption. Overall the focus would be to build an economy that is "more resilient to foreign economic coercion".
New Zealand ‘eliminating’ the Virus
On 28 April 2020, while announcing the lifting of certain restrictions after five weeks of one of the strictest nation-wide lockdown, Prime Minister Jacinda Ardern said the country has ‘currently eliminated’ the virus and the last few cases ‘must be hunt down’. New Zealand reported its first confirmed COVID-19 case on 28 February 2020. Till date the country has reported 1503 cases and 21 deaths. While other countries are focusing on containing the virus, New Zealand has set an ambitious goal of ‘eliminating’ it, declaring ‘state of national emergency’ at ‘Alert Level 4’, with unprecedented restrictions on 25 March 2020, when the country had less than 100 cases. The lockdown is being lifted in a phased manner, as community transmission has come under control, new infection rates have lowered, testing, tracing capacity and health system is well equipped to deal with possible outbreaks. After successfully reporting occasional 2-3 cases or no new cases for the past two weeks, the country eased the restrictions further moving to Level 2 of emergency starting from 14 May 2020.
The government credits the positive trends to early lockdown, extensive testing and tracing. Also the government acknowledged that the New Zealanders have shown a high degree of compliance with the lockdown. The geographical location of the country, being isolated from the world, meant fewer early travelers from China and other infected areas. Small size and low density of the population helped in preventing easy transmission. Besides, a coherent public health system has also been a significant factor for success.
As on, 19 May 2020
Source: Ministry of Health, New Zealand
Over the past few days New Zealand-China row has been intensifying as New Zealand expressed support for Taiwan’s participation in the WHO, to which the Chinese embassy in Wellington reacted strongly saying that “New Zealand should strictly abide by the one-China principle and properly handle issues related to Taiwan." Responding to the Chinese criticism, Foreign Minister Winston Peters said that “true friendship is based on equality.” Earlier New Zealand had criticized the WHO for ‘underperforming’, not giving ‘early-enough warning’. When New Zealand imposed travel restrictions on Chinese travelers in February, the Chinese Embassy, had called for lifting the ban saying that the virus in China was under control.
On the domestic political front, general elections are scheduled to be held in New Zealand in September this year. The government’s handling of the pandemic and related social-economic crisis would be consequential in determining voter’s preferences and therefore, the government’s fate. Prime Minister Jacinda Ardern has been widely appreciated for efficiently managing the crisis. Although initially critics argued that restrictions were too severe, given the level of spread in the country, opinion surveys have shown a high level of support for the government’s efforts. Prime Minister Ardern has been praised for acting timely and for her empathetic approach engaging people using social media platforms. Her announcement of she and her cabinet taking a 20% pay cut for the next six months was very well received by people. Leading epidemiologist Prof. Michael Baker said that New Zealand’s “elimination” strategy would not have been possible without Ardern’s “brilliant, decisive and humane leadership”. 
Though the virus looks under control right now, but the crisis is having enormous impact on the country’s economy that is well embedded in globalisation, reliant on global supply chains, which is looking very grim currently. To deal with the economic repercussions, the government has announced an Economic Response Package, of $12.1 billion, representing 4% of the country’s GDP. The estimated forecast is that GDP will contract by 15% in the June quarter, with unemployment rising to 9% in September. Trade experts in New Zealand have also called for diversification to avoid excessive reliance on China especially for exports to overcome the long-term impact of the pandemic.
Australia and New Zealand seem to have handled the crisis better than many western countries as it appears at this stage. As both countries are opening more businesses, lifting more restrictions, and also discussing the possibility of opening the border between the two countries, the main risks to watch out for, is a possible ‘second wave’ of outbreak. Governments have warned that the decline in the numbers, are early trends and should not be a reason to become complacent as the fight against the virus is likely to continue for some time. Both the countries intend to continue extensive testing and tracing. While the rate of spread has decreased, economies are facing astronomical challenges, with short term socio-economic repercussions already showing. The pandemic has resulted in a difficult choice for governments across the world. On the one hand are the huge health risks; on the other is a disastrous economic crisis. The trade-off is very difficult. Australia and New Zealand are among very few countries where the curve is flattening with each passing day and governments therefore, may be better placed to be able better maintain a balance between the two in the long run.
*Dr. Pandey is a Research Fellow at Indian Council of World Affairs.
Disclaimer : The views expressed are personal.
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