Ideas@TheCentre – The Centre for Independent Studies


Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

‘Reasonable person’ test of virus response

Salvatore Babones

04 June 2020 | Ideas@theCentre

We can’t blame our leaders for being caught off-guard by the coronavirus; we all were. We can, however, hold our leaders responsible for the decisions they should have made based on the information they should have had at the time. Hindsight may be 20/20, but that doesn’t mean foresight should be blind.

One framework for evaluating decision-making under conditions of profound uncertainty is the ‘reasonable person’ test of common law. As famously formulated by the American jurist Learned Hand (yes, that really was his name), a ‘reasonable person’ would take into account the:

  • Probability of harm
  • Seriousness of the harm
  • Cost of taking precautions

My CIS paper The 12-Week Window: Coronavirus crisis Australia didn’t have to have,  applies these criteria to Australian decision-making during the crucial first 12 weeks of the crisis, from China’s first public acknowledgment of the ‘Wuhan pneumonia’ on December 30 to Australia’s final border closures on March 20.

It reveals that the high probability of harm and high seriousness of the probable harm were both clear by the end of week 5. Australia’s leaders made the right decision to ban travel from China on February 1, just inside that limit.

The decision to close the border with China likely cost Australia between $4.8 and $6.6 billion in export revenue in the first half of 2020 alone. Having incurred these costs, Australia had little to lose from progressively tightening border restrictions over the next five weeks.

Yet the country’s leaders chose instead to incrementally loosen controls. Australia belatedly started tightening again by imposing restrictions on travel from Iran (week 9), South Korea (week 10), and Italy (week 11), but by then it was too late.

Weekly confirmed cases hit the double-digits in week 9 and the triple-digits in week 10. By the time Australia banned all foreign travel in week 12, the country was detecting more than 1000 cases a week. Even so, Australia didn’t start quarantining residents returning from overseas until the end of Week 14.

It would have cost Australia very little to cut off other virus hot spots as they emerged, quarantine returning residents, and suspend cruise ships. Instead, the government’s failure to secure the border after week 5 cost the country dearly indeed. Learned Hand could only return one verdict: negligence.


State finances after the pandemic

Robert Carling

04 June 2020 | Ideas@theCentre

The coronavirus pandemic has drawn state government policies into the response to a national crisis like rarely before.

The conventional wisdom is that while the states are wielding much of the power, the Commonwealth will bear the fiscal costs and political accountability for the economic fall and recovery. But this is no garden-variety slump.

It is true that the Commonwealth will bear the lion’s share of costs, but the states and territories are also being hit hard. It is also the case that states hold the keys to economic recovery to an unusual degree — and voters know it.

Premiers should contemplate that, as they bask in the immediate glory of having helped suppress the virus and dilly-dally over the removal of restrictions that can no longer be justified (if they ever were).

Even before the crisis, the states were facing mounting debts; the pandemic is just making the mountain bigger.

For example, aggregate state non-financial public sector net debt was set to rise from around 45% of operating revenue (a more meaningful measure than the percentage of gross state product) in 2019 to 75% in 2022, continuing the long-term rising trend from only 10% just before the GFC.

That is in the past. Now the pandemic could hit state budgets to the tune of almost $50 billion in 2020, which would take net debt to almost 90% of revenue by 2022.

The fiscal struggle that lies ahead for states and territories means they will need to curb operating expenses, be more selective with infrastructure projects, do more privatisation, reform their taxes, and take part in other economic reforms to help boost the nation’s dismal productivity performance.

Any state that takes a ‘business as usual’ approach from here on, and hopes for years of good luck, is inviting trouble.

Trump vs Twitter tango dances on

Monica Wilkie

04 June 2020 | Ideas@theCentre

Social media and Donald Trump are fighting — again. Twitter has started fact-checking Trump’s tweets and he is now threatening them with regulation.

Last week, Trump signed an executive order to examine Section 230 of the Communications Decency Act which “provides broad immunity to websites that curate and moderate their own [sic] platforms.”

This law prevents websites from being sued for posts made by others; for example, in the comments section or reviews.

The law has been described as “the 26 words that created the internet” and repealing it would force the federal government “into regulating online speech.”

But these concerns — although legitimate — are unlikely to come to fruition, because this is simply another round of Trump vs Twitter.

Trump supporters will see Twitter’s fact-checking initiative as further evidence of ‘Big Tech censorship’ Wwhile Trump’s detractors will see his tweets labelled as ‘misleading’ or ‘misinformation.’ And this will confirm the view they have been bleating for four years: that Trump is a ‘corrupt liar.’

The signing of the executive order is again more political theatre. Trump can claim he is standing up to the Big Tech bullies — without suffering the negative consequences of regulation.

This dance has been going on for years now.

After the election of Trump, social media companies were accused of allowing electoral interference and they have been routinely pressured to ensure it doesn’t happen again.

Twitter’s latest stunt is an attempt to appease critics and is a classic example of ‘being seen to be doing something.’

Because realistically, no platform wants to kick Trump off — he is audience-building gold for them. And Trump does not want to shut down these companies;  he depends heavily on them to speak to his heartland.

Social media and politics are a performative exercise in which each side dutifully plays their part. Hence, they will continue to threaten and insult each other for the amusement of the crowd.