Delivered on

A permanent pandemic stalemate

Good morning! China's State Council poured further cold water on cryptocurrencies on Friday, issuing a statement saying it was necessary to "crack down on Bitcoin mining and trading behaviour, and resolutely prevent the transmission of individual risks to the social field".

Prices for many cryptos fell 10% almost immediately, with Bitcoin now down around 25% over the past week. The crackdown was part of a broader effort by Chinese policymakers to mute what they deem (at least publicly) is speculation, with everything from house prices to commodity prices being talked down in an attempt to to stave off consumer price inflation.


Daily % change




10Y Bond






Brent (bbl)



Gold (oz)



Iron ore (t)






Note: Brent oil, gold bullion and iron ore prices are the second futures contract.

The US S&P500 (-0.078%) fell ever so slightly on Friday to end the week down around 0.3%, the first back-to-back weekly loss since February.

Retail rebound: Preliminary ABS retail trade data for April showed a relatively large 1.1% month-on-month rise (25.1% year-on-year due to the low, restriction-affected base in 2020). Food retailing, cafes, restaurants and takeaway food services were strong, particularly in NSW following the state government's $100 dining voucher stimulus program. Is there anything not being juiced by stimulus right now? 🤔

Cashed up: Businesses are cashed up and they're spending big, according to ANZ: "What we're seeing, particularly in the asset finance space, is significant 25 to 30 per cent growth".


A permanent pandemic stalemate

Australia needs to do better just to hit Treasury's recent 30 June 2022 Budget estimate.
Australia needs to do better just to hit Treasury's recent 30 June 2022 Budget estimate.

A gap is emerging between countries that failed to prevent COVID-19 becoming widespread and 'COVID-free' countries, such as Australia. Complacency is the culprit in the latter – both from the public and their governments – and it could leave us locked away in "a permanent pandemic stalemate", while the rest of the world gets on with their lives.

Not a good look: Recent surveys suggest a lot more needs to be done to convince the public to get vaccinated, with people taking a 'wait and see' approach to vaccines:

  • In Australia, almost one-third of the public does not intend to get vaccinated due to concerns about side effects, minimal risk of catching the virus and inability to travel.
  • In New Zealand, only 51% said they were likely to get vaccinated.
  • In Hong Kong just 37% of residents intend to get vaccinated.

Poor messaging: ScoMo has said Australia is "in no hurry" to get vaccinated. Health Minister Hunt effectively said 'no worries' to those who don't want AstraZeneca (the only vaccine of which Australia has ample supply), as "we've been very clear that, as supply increases later on in the year, there will be enough mRNA vaccines for every Australian". If you want people to get vaccinated so that life can return to normal, that is about as poor a message as you could possibly send.

A significant cost: The Australian government is operating according to a commonly used Chinese phrase, where "the plan can't keep up with the changes". Whether it's bureaucratic rigidity or political trepidation (or some combination), the government hasn't adapted as the situation evolved. It's a costly error, too, with the McKell Institute estimating that every additional day the international borders remain closed comes at a cost of around $203 million.

There has also been no observable progress on improving the hotel quarantine situation, which is the single biggest risk in terms of new community transmission. That's despite the government having received proposals from Queensland and Victoria for purpose-specific quarantine facilities and its own Health Department advising them to investigate "new models" back in October 2020.

Incentives matter: As the chart at the top shows, Australia is currently behind the daily rate required for every adult to have had a first vaccine dose by the end of June 2022. While that rate will no doubt improve when the promised Pfizer and Moderna doses show up, we just hope the government has some kind of incentive scheme up its sleeve to help overcome vaccine complacency. They wouldn't even have to work that hard at it – several US states, for example, have undertaken real world experiments, offering millions in lottery prizes, cash and even free beer to improve their rates of vaccination. Just pick the most effective options for the problematic cohorts and get on with it.

The Wrap Up

  • What do Australia and North Korea have in common? They're the only two remaining countries that forbid their citizens from leaving without the government's permission, following Saudi Arabia's decision to lift its ban last week.
  • Belarus' government effectively called in a bomb threat to a Ryanair flight from Greece to Lithiuania, diverting it to Minsk with fighter jets to arrest a journalist, Roman Protasevich, on politically motivated charges.
  • The Nationals' David Layzell secured victory in the crucial NSW Upper Hunter by-election on the weekend, despite former Liberal Party Prime Minister Malcolm Turnbull advocating for (and donating to) Independent candidate Kirsty O'Connell.
  • How Apple screwed Facebook: An interesting article on Apple's privacy changes and how it has "triggered an unstoppable collapse in Facebook's ability to collect user data".
  • "Australian GPs are walking away from the nation's COVID-19 vaccination rollout, 'frustrated' at the lack of supply and challenges of managing constant changes to the program."
  • We published an article earlier today over at EconByte looking at inflation and bubble risks in China (and elsewhere).