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Always planning, never doing

Good morning! There were a staggering 633 new coronavirus cases in NSW yesterday. Premier Gladys Berejiklian said that "every person who has the virus is spreading it to at least more than one person... [so] the data is telling us in the last few days is that we haven't seen the worst of it".

Eesh. 😖

Across the ditch, the Kiwi cluster grew to 10 people yesterday. Most of the cases identified so far are aged in their twenties (socially active!) and while the outbreak has officially been linked to NSW, authorities still don't know how it got from NSW into Auckland in the first place.

That lockdown may not be over in a week...

Markets

Daily % change

 

AUD/USD

72.4

-0.3%

 

 

10Y Bond

1.14

0.0%

 

 

ASX200

7,502

-0.1%

 

 

Brent (bbl)

67.4

-2.5%

 

 

Gold (oz)

1,790

+0.2%

 

 

Iron ore (t)

147.8

-6.9%

 

 

Bitcoin

44,636

-0.9%

 

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

Overnight the US S&P500 fell 1.07% after the minutes from the July Fed meeting revealed a consensus had agreed it was "appropriate" to taper (slow bond purchases) before the end of 2021. Some also worried that "the recent high inflation readings could prove to be more persistent than they had anticipated", spooking markets.

Locally the ASX200 fell 0.12%, a third straight decline with mining giant BHP punished heavily (-7.07%) due to plummeting iron ore futures and the announcement of its plan to merge its oil and gas business with Woodside. Elsewhere, pharma giant CSL declared a record dividend for the 2021 financial year, although it expects conditions to soften due to rising plasma costs. It also confirmed that it "accelerated our research in mRNA technology".

Kiwis on hold: The Reserve Bank of New Zealand – widely expected to tighten monetary policy this month – left its cash rate unchanged following the commencement of a national lockdown, which was "a stark example of how unpredictable and disruptive the virus is proving to be".

Generally subdued: This should give the RBA pause. "Generally subdued" were were the words the ABS used to describe wages growth in the June quarter, which rose just 0.4% (1.7% annually), "one of the lowest rates recorded for the series". This was pre-lockdown, too – could stagflationary pressures be creeping in? 🤔

An unexpected dip: Consumer prices in the UK increased 2.0% in the year to July, dipping from June's 2.5%. The ONS Deputy National Statistician for Economic Statistics said a number of factors contributed to the slowdown, including anomalies due to "differing patterns of movement restrictions", meaning in some areas "real prices were used last year but have had to be imputed this year".

Election troubles: Consumer prices in Canada surged 3.7% in July, the biggest increase since May 2011. The housing boom is clearly having an impact – the homeowners' replacement cost index rose at an annual pace of 13.7%, the fastest rate of growth ever (records started in 1987). Certainly awkward timing for Trudeau!


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Feature

Always planning, never doing

Australia's pandemic failures are numerous. Not the worst in the world – not even close – but all of the failures seem to have one thing in common: politicians and health regulators being too slow to react to a fast-moving virus.

Gif from Zootopia showing the slow-moving bureaucracy at work.
Australia's health regulators have reacted extremely slowly. Zootopia/Tenor

Writing in Tuesday's AFR, economists Steven Hamilton and Richard Holden lament "the inability of our medical-regulatory complex to fully comprehend the consequences of inaction and delay". For example:

"For $A400 million, the Australian government could send every single Australian household a test kit, just as the Singaporean government is doing right now. The best our government can offer is a trial in 50 aged care facilities in Sydney."

Why this matters: The authors point out that the current Delta outbreak could be eliminated more quickly if we rolled out rapid at-home COVID-19 tests in the areas of concern, then tested all positive cases again with more accurate (but far slower) PCR tests. False negatives would be missed, but "it's silly to assume the alternative is a PCR test – in many cases, it's no test at all".

Looking forward: Australia's Therapeutic Goods Administration (TGA) has approved 25 of these rapid tests but has also regulated them to the extent that they "can currently only be legally supplied… for use by trained health practitioners". That advice appears to be stuck in bureaucratic limbo, with the TGA's website still stating that "Planning for the greater use of rapid antigen testing as part of Australia's COVID-19 testing strategy in the future is underway."

The virus moves quickly. Bureaucracies do not. Unless the "medical-regulatory complex" gets a political kick up the backside and starts considering trade-offs as part of its decision making process, Australia will remain several steps behind the virus.


The Wrap Up

  • 🧒 ScoMo said a decision on whether to vaccinate children aged 12-15 is "not too far away".
  • 🛏️ The federal government will pay for the construction of a 1,000 bed dedicated quarantine facility in Perth, expected to be completed by March 2022.
  • 🚢 The partial closure of the world's third-busiest container port, Ningbo, continued into a seventh day. The global shipping "backlog is getting bigger and the congestion is getting worse".
  • ☠️ Texas health officials requested five mortuary trailers in anticipation of a possible spike in deaths due to soaring COVID-19 cases.
  • 🦘 Qantas confirmed all employees will soon be required to be fully vaccinated against COVID-19, with exemptions granted only for "documented medical reasons".
  • 🥝 New Zealand health authorities confirmed the country is dealing with the Delta coronavirus variant.
  • ✈️ Australia's first rescue flight to Afghanistan picked up 26 people, which ScoMo said "was the first of what will be many flights subject to clearance and weather".
  • 🍎 The German parliament has written to Apple asking it to reconsider its device scanning plans, warning it is going down a "dangerous path" while undermining "safe and confidential communication".
  • 👴 The US will soon require all nursing home staff to be vaccinated or lose federal funding.
  • 💉 COVID-19 booster shots will start rolling out in the US from 20 September, "starting 8 months after an individual's second dose".

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