Submission to the Covid 19 Response Inquiry

The disastrous overreaction to Covid 19 by Australian Governments will leave Australia worse off on health and economic grounds for decades
Jonathan Rochford

Narrow Road Capital

The response of most developed nations to the Covid 19 pandemic was a disaster on health, economic and human rights grounds. Over three years after the pandemic began the results are beyond doubt, the Swedish response was far superior to almost all countries that implemented broad lockdowns. The many who advocated for broad lockdowns drastically overestimated the potential death toll and deliberately downplayed the impact on depression and mental health, drug addiction, learning losses and behavioural issues for children, as well as the enormous financial cost. Our nation will be substantially poorer (lower productivity, higher taxes, less government spending on key areas) and in worse health for generations as a result of terrible government policies in responding to Covid.

The health response

In the early months of the outbreak, the forecast death toll from Covid for the US was 0.2-0.5% of the population, drawing heavily on what was seen on cruises ships. The cumulative death rate in the US is now 0.36% after nearly three years. It must be remembered that around 1% of the US population will die each year, making Covid deaths a small part of the overall death toll.

It was clear in the very early stages that Covid was a substantial risk for elderly people, particularly those in frail condition. However, it was also clear that Covid was not a substantial risk for those aged under 50 without significant medical issues. In terms of mortality, Covid was very efficient at shortening the lives of those who had limited life spans left, notably those in aged care and hospitals. Covid was not significantly worse than a bad flu for those aged under 50 and in good health, particularly children. The correct response to the early stage data was to protect those who were most vulnerable while allowing others to live their lives without significant impositions.

Arguing that broad lockdowns were necessary implies that drastic government intervention is necessary for other common causes of death. This would include actions such as:

· Halving the speed limit in all speed zones

· Banning smoking

· Banning alcohol

· Banning junk food, fast food, sugary drinks and juices

· Mandating regular exercise for all ages

· Compulsory annual screening for a broad range of diseases, health conditions and risk factors

Few Australians would support such drastic actions in the name of improved health outcomes.

The financial response

Having made the disastrous decision to impose broad lockdowns (rather than allowing individuals and businesses to make their own choices about how to manage the risks) governments then felt obligated to partially compensate those made worse off by their actions. As has been well documented by the Rear Window column in the AFR, tens of billions of dollars in handouts were given to businesses who merely guessed they might suffer a loss of business, with no obligation to pay back the funds if their dour forecasts proved to be exaggerated.

In short, without broad lockdowns no compensation would have been required. However, the combination of the disastrous decision to impose broad lockdowns and the bungling of handouts leaves Australian governments with debt that will take decades to be fully repaid.

Personal freedoms

The enormous overreach by governments in imposing broad lockdowns highlights Australia’s lack of protection for basic human rights. Governments should not be able to widely interfere in ordinary activities such as going to work or education, visiting family and friends, buying and selling goods and services or engaging in recreational activities. Australia needs a bill of rights that heavily restricts government interference in everyday life. Whilst there may be limited exemptions (e.g. Australia being invaded by a foreign army) basic rights should be guaranteed with the ability to appeal to the High Court to have these enforced should governments attempt to overreach.

It is noted that the American bill of rights was not completely effective in stopping government overreach in many US states. That failure does not mean a bill of rights is not worth pursuing, it was in many cases a problem of courts taking too long to overturn government actions that were illegal and excessive. Having a bill of rights gives citizens the ability to reject government overreach, by their direct actions and by legal challenge.

Brickbats and bouquets

The ABC: The media is most to blame for whipping up hysteria regarding Covid, with the ABC the worst offender. Their coverage of the pandemic was sensationalistic and heavily biased. They were the most fervent in advocating for broad lockdowns and largely avoided reporting on the terrible consequences of broad lockdowns.

Politicians: The lack of logic, fortitude and lack of a basic understanding of history showed that the current generation of politicians is unable to grapple with consequential decisions. Other examples include long overdue reforms in tax, welfare and productivity. The Federal Government should have fought the states harder on broad lockdowns and border closures, and forced states to compensate individuals and businesses if they chose to impose broad lockdowns. The financial response to Covid is by a large margin the most wasteful government program in Australia’s history.

Health “experts”: From the early stages, the vast majority of health experts presented biased and pessimistic scenarios and put forward drastic responses as being necessary. They failed to understand that imposing enormous hardship and costs on a whole population was not reasonable or warranted given the minimal risk for most. Their recommendations assumed that unlimited funds were available to respond to a temporary pandemic. Nick Coatsworth was a rare exception to the groupthink.

Gigi Foster: Her advocacy for logic and rationality in the face of hysteria and personal attacks was extraordinary. Had Australian governments listened to her voice of reason we would be enormously better off today, having taken a similar pathway to Sweden. Her attitude and work are reminiscent of Barry Marshall and Robin Warren’s discovery of bacteria that caused gastric ulcers, which ultimately won them a Nobel prize. Gigi Foster should be our next Australian of the year, a quintessential example of someone doing what is right despite enormous institutional pressure to conform to illogical groupthink. 

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This article has been prepared for educational purposes and is in no way meant to be a substitute for professional and tailored financial advice. It contains information derived and sourced from a broad list of third parties and has been prepared on the basis that this third party information is accurate. This article expresses the views of the author at a point in time, and such views may change in the future with no obligation on Narrow Road Capital or the author to publicly update these views. Narrow Road Capital advises on and invests in a wide range of securities, including securities linked to the performance of various companies and financial institutions.

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Jonathan Rochford
Portfolio Manager
Narrow Road Capital

Narrow Road Capital is a credit manager with a track record of higher returns and lower fees on Australian credit investments. Clients include institutions, not for profits and family offices.

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