Monday, October 26, 2020
A BLACK SUMMER

From September 2019 to March 2020, Australians endured a "Black Summer", when catastrophic bushfires ravaged our drought-stricken land.


The fires were fuelled by extremely hot and dry conditions, the latter a result of several years of low rainfall.


The number of fires, their intensity, the extent of the area burnt, the homes, businesses and infrastructure destroyed, the number of animals injured and killed, and the smoke - which suffocated cities such as Sydney - were unprecedented, and captured worldwide attention.


In March 2020, we wrote:


Australians live in an increasingly challenging environment.


Drought, dust storms, fires, floods, land degradation, changes in climate, increasing cost of living, low wage growth, global trade tensions and economic uncertainty are just some of the issues we all face.


Unfortunately, this statement now greatly understates our challenges.

A PANDEMIC: COVID-19

Without time to recover from the catastrophic Black Summer, Australians have been thrust into a health pandemic that - as of mid September 2020 - has infected over 29,600,000 people worldwide, inundated medical and health care services globally and caused over 935,000 deaths.


Fortunately, it appears that an overwhelming health crisis has been averted in Australia. The number of positive test results for COVID-19 has fallen significantly and offers hope that the virus has been contained, at least for now.


An outcome made possible by the swift and effective response of national and state leaders, health advisers, numerous government departments and - most of all - the outstanding efforts of brave essential front-line workers, especially those in the medical and health care services.


However, after a "Bleak Winter" uncertainty now prevails and there is a need for our leaders to respond equally effectively to the unfolding economic crisis as a global depression looms.

Sailing into a Storm

Up until the pandemic, Australians had enjoyed an unprecedented 30-year period of uninterrupted economic growth. It was Australia’s La Belle Epoque.

 

However, prior to Covid19, the Australian economy was facing some significant headwinds. It was challenged by:

 

High borrowings especially by homeowners,

 

Low growth in wages,

 

Low agricultural production impacted by drought and questionable sustainability practices,

 

High share market prices relative to earnings,

 

A very high and increasing dependence upon one customer, and

 

And trade disputes and tariffs impacting Australia’s key markets.

ECONOMIC CRISIS

Few people could, however, have foreseen the massive crisis that COVID-19 would cause the Australian and global economies.


The pandemic necessitated lockdowns and the shutdown of all but essential services, and has led to:


 

Australia ‘s first recession in 30 years,

 

Mass redundancies and rising unemployment, 

 

A huge increase in borrowings by both governments and companies,

 

The collapse of state and federal government revenues and tax bases, and 

 

Slowdowns in the economies of all Australia’s major trading partners.



Never before has such a large economic shock occurred in our nation - and the world - measured both in magnitude and in speed of impact.


An extraordinary crisis warrants an extraordinary vision.