Firstly, what more can we say about the latest border restrictions other than here we go again, although this time without JobKeeper. Needless to say, this will bring more economic hardship to tourism businesses who need all the trade they can get in peak times such as school holidays to make up for the weak trade they have experienced in other periods.
It’s looking like the once highly revered National Cabinet process has been a total failure. States are imposing costly parochial border restrictions and lockdowns, and they can blame the federal government for the slow vaccine rollout and for not having built regional quarantine facilities.
The economy had looked like it was recovering spectacularly and had shrugged off the ending of JobKeeper, but the spread of COVID and harsh state government public health responses across Australia could severely compromise that recovery. I was looking forward to hearing about the economic recovery from RBA Governor Philip Lowe who was scheduled to speak in Brisbane at the Economic Society lunch on Thursday 8 July, but that surely now must be in question given the closure of the state border to people from Greater Sydney. Sorry, Governor!
Secondly, the Queensland state budget papers handed down last week reminded me of just what a colossal waste of taxpayers’ money Cross River Rail is. It was always only ever going to be marginally economic when the assessment was done pre-COVID, and now, post-COVID with high rates of people now working from home at least a couple of days per week, the economics of the project must be abysmal. Cross River Rail means that nearly one in every seven dollars of Queensland Government capital purchases in 2021-22 is going to transport projects in inner city Brisbane, approximately $1.69 billion out of total capital purchases of $12.61 billion (see chart below). That money could probably be better spent in regions adversely affected by the government’s COVID restrictions such as Cairns and the Whitsundays.
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