From recovery to continued prosperity: What lessons from COVID-19?

Executive Summary

This policy brief was originally drafted as a submission to an Australian parliamentary inquiry seeking input from Australian firms and individuals on policy solutions across a broad range of areas as Australia continues to ride out the storm wreaked by the global pandemic COVID-19.

It begins by exhorting Australia’s political leaders to recognize both the extreme severity of the socio-economic challenges the country faces at this time, but also the unique opportunity these challenges present for visionary leadership and positive change, the effects of which will define Australia for future generations. Our recommendations (of which there are 16 in total), span four different areas, namely: (1) increasing the robustness of our supply chains; (2) preparing for the workplace of the future; (3) transitioning to a small carbon footprint; and (4) strengthening rules based cooperation with our partners both in the region and beyond.

The supply shock that followed hard on the heels of economy-wide shut-downs in countries like China and India were a real wake up call for the Australian economy, with (unfounded) fears that we would run out of toilet paper and more serious concerns regarding possible supply shortages of imported pharmaceutical products.

Although Australia is considered a food secure nation, even our agrifood producers rely on imports for complimentary products such as packaging and essential inputs such as fertilizer. Consequently, while global supply chains have proven benefits, this crisis has also highlighted their risks.

In Section 1 of this policy brief, Naoise McDonagh discusses this problem in more detail and provides a set of five recommendations on how the Australian government can work together with the private sector to diversify supply chains in a way that enhances both robustness and resilience. The social distancing measures imposed in response to COVID-19 in Australia forced those who could, to work remotely (mostly from home) and in doing so accelerated a trend that was already takingplace. Unbundling labour services from those who provide them (either through cross-border remote teleworking or through the use of Artificial Intelligence) could prove as disruptive as previous generations of supply-chain reorganization although this time it is not just factory workers in advanced industrialized countries that may suffer but rather a much larger swathe of the developed world’s white-collar, middle-class employees.

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The views expressed here are the author’s, and may not necessarily represent the views of the Institute for International Trade.