CMAX Advisory closely follows political developments internationally and analyses implications for businesses operating in Australia.
We develop a weekly report of the most important political and economic news in Australia, utilising our understanding of complex political issues and processes to inform companies of relevant developments and forecast likely outcomes.
This week's top story
Doubts over international travel
Two of Australia’s leading health authorities have questioned whether international travel will resume in 2021, even after the roll-out of a vaccine.
It comes as the Therapeutic Goods Administration granted provisional approval of the Pfizer/BioNTech Covid-19 vaccine for use in Australia.
The TGA said the vaccine had met high safety standards and had been approved for people older than 16, with two doses required at least three weeks apart.
The federal government has said the first vaccines were expected to be administered in late February, but if there are delays it could be rolled out in March, although the government has stressed Pfizer’s advice that a February rollout was likely.
Federal Health Secretary Professor Brendan Murphy said international travel was unlikely to resume in 2021, while the country’s Chief Medical Officer, Professor Paul Kelly, said international border restrictions would be one of the last things to change, even with a successful vaccination program.
Professor Kelly added that New Zealand was the only country with protections that would allow travel into Australia via controlled bubbles.
However, Prime Minister Scott Morrison said the federal government could reconsider plans for another 12 months of restrictions and hotel quarantine depending on “how things play out over the course of the year”.
“We have dealt with the information in front of us, we’ve worked with the experts that we have to put in place the best responses. The same will be true when we make decisions over the course of this year, particularly when we get to the other side of vaccines having been introduced in Australia, about what will happen with international borders,” said Mr Morrison.
Former Health Department secretary Jane Halton, who led a review of hotel quarantine arrangements, said there would need to be evidence that the vaccines stemmed viral transmission before quarantine restrictions could be lifted.
She said the current rules requiring quarantine for arriving travellers were stopping the spread of the virus and could stay in place for the next 12 months.
The resumption of international travel will be crucial to a number of sectors that contribute significantly to the national economy, not least the tertiary education sector, which relies heavily on income generated from international students, and the country’s tourism sector.
PM urged to push US on Indo-Pacific
Prime Minister Scott Morrison is being called on to help shape US policy on the Indo-Pacific, although the federal opposition is questioning the prime minister’s close personal relationship with former US President Donald Trump.
The Executive Director of the Australian Strategic Policy Institute (ASPI), Peter Jennings, said there were concerns among some Australian policy-makers that the new administration of President Joe Biden would place less emphasis on the Indo-Pacific in the face of other challenges such as Covid-19 and climate change.
He said Australia’s “widely respected pushback” against Beijing and its successful handling of the coronavirus pandemic had “bought Australia a privileged place at the alliance table” that Mr Morrison should use in order to shape US thinking.
“[Mr] Morrison should visit Washington soon after the inauguration to help shape [President] Biden’s thinking about America’s role in the Indo-Pacific and beyond,” he wrote.
He said key elements of the strategy should be a common response against Chinese economic coercion and formalising ‘Quad’ defence cooperation.
“This will require more regional leadership from Australia than we have been comfortable delivering up until now, but the price of an engaged Washington is an activist Canberra,” he said.
However, Mr Morrison has also come under political pressure for his close personal relationship with the former US president, with Opposition Leader Anthony Albanese saying Mr Morrison had put his personal affinity with Mr Trump ahead of the national interest and damaged relations with the incoming Biden-Harris administration.
In a speech on foreign policy, the Labor leader cited Mr Morrison sharing “a campaign rally stage with Donald Trump in Ohio” and not meeting with any senior Democrats during a 2019 visit to the US as examples.
Mr Albanese called on Mr Biden to set a “clearer definition around the terms of future US-China competition” that should allow the US and its allies to “defend clear red lines, but also enable co-existence”.
Concerns grow over submarine program
There are increasing concerns over Australia’s Attack class submarine program, with calls to abandon the program amid delivery delays, rising costs and a failure to meet local content targets.
The submarines, designed by France’s Naval Group, are set to replace the country’s ageing Collins class submarines, which were first introduced into service in the 1990s and were originally scheduled to be retired around 2026. That date has been extended, with the first Attack class boats not due to enter service until the 2030s.
It comes amid reports the Defence Department is preparing to cancel a A$297 million contract with US firm Phoenix International (Australia) to deliver submarine search and rescue equipment – a move that could cost the federal government tens of millions of dollars in compensation.
Delivery delays are just one of the issues facing the Attack class submarines, with the cost of the program rising from A$50 billion to A$89 billion, and promises from Naval Group over local content falling short.
Independent senator and former submariner Rex Patrick said the government should consider inviting firms from Sweden, Germany and Japan that missed out on the original contract to resubmit proposals in an effort to introduce competition into the program.
While Australia is keen to keep France onside given its strategic importance in the Indo-Pacific, there are clear signs the government’s patience has its limits, with Prime Minister Scott Morrison reportedly increasingly frustrated over the project.
One option reportedly being considered is for the government to engage Swedish company Saab Kockums, which designed the Collins class submarine, to develop a next-generation “son of Collins” as a back-up.
Introducing competition into the project was backed up by Hugh White, Professor of Strategic Studies at the Australian National University, who said a lack of competition would inevitably lead to cost increases and schedule overruns.
“What governments normally do with these sorts of projects is to contract with two different designers to design and develop the boat so that they are under pressure for performance, price and schedule as they develop their proposal,” he told the Australian Broadcasting Corporation.
- CMAX Advisory’s Chief Strategist and Chief Operating Officer Tyson Sara, spoke to Sky News about the troubled submarine program, as well as developments in China and Taiwan.
500 workers hired to assist vaccine roll-out
With Covid-19 vaccinations slated to start in Australia from February, the federal government plans to hire an additional 500 workers to assist with the roll-out.
The additional workers, to be provided by International SOS, Healthcare Australia, Sonic Clinical Services and Aspen Medical, will supplement those at hospitals, doctors’ surgeries, vaccination clinics, Aboriginal health organisations and pharmacies.
Health Minister Greg Hunt said the additional workforce would ensure vaccines were administered efficiently, particularly to priority groups in residential aged care, disability facilities and carers.
“Our vaccination strategy requires the highest levels of operational readiness,” he said.
No health professional will be allowed to administer a vaccine without compulsory training, which is being developed by the Australian College of Nursing.
“The nature of the Covid-19 vaccines requires immunisers receive information on a range of issues, such as the use of multi-use vials and handling practices for the Pfizer vaccine which requires very low temperatures for storage,” Mr Hunt said.
CHF calls for vaccine roll-out to be fair
The Consumers Health Forum of Australia (CHF) has called on he federal government to provide timely access to safe and effective Covid-19 vaccines for all Australian residents at no cost to the consumer.
In a position statement, the CHF said the federal government should “continue to proactively assess and source new Covid-19 vaccines as and when appropriate to best protect the Australian community from the Covid-19 pandemic”.
Australia has signed agreements to access Covid-19 vaccines from AstraZeneca and Pfizer, which will be available in coming weeks, as well as Novavax, which it is expected to be available as early as the middle of the year.
The CHF’s position statement outlines the key considerations of the vaccine roll-out from a consumer perspective, which it says need to be incorporated into the planning processes for vaccine distribution.
The CHF’s principles for the roll-out of a vaccine include accessibility; quality; and communication and engagement.
“Australians have a fundamental right to health care and principles of fairness, justice, reasonableness, accountability and transparency must apply even when resources are scarce,” it said, adding that vaccines should be made easily accessible to all Australian residents at convenient services and locations, at no cost and on a voluntary basis.
SA launches space services mission
South Australian Premier Steven Marshall said the state will be one of the first sub-national governments in the world to launch its own satellite, with a A$6.5 million SASAT1 Space Services Mission to deliver space services to SA.
Research consortium SmartSat CRC will lead the mission and application prototyping, with satellite manufacturing company Inovor Technologies designing and building the satellite which, once deployed, will support the improvement of state emergency, environment, water monitoring and bushfire mitigation services.
Once launched into low-Earth orbit, the satellite will support data collection from ground-based sensors plus Earth observation imaging via a hyperspectral electro-optical payload.
The mission will deliver the satellite in 15 months for launch into orbit, with the satellite available for a further three years to 2024 for data collection and operations.
Mr Marshall said that the project is central to the SA Growth State: Space Sector Strategy, which was announced in November.
“SA is embarking on a bold mission with industry to design and build a satellite to deliver space-derived services to the state,” Mr Marshall said. “Applications include using the data and imagery we collect to solve real life problems, like helping farmers monitor water levels so they can more accurately predict future yields.”
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