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
PM backs mass vaccination centres
Prime Minister Scott Morrison has asked National Cabinet to hold two meetings a week to try to get the country’s Covid-19 vaccine rollout on track.
Mr Morrison also flagged the establishment of mass vaccination centres with the aim of vaccinating the entire population by the end of the year.
Australia’s vaccination program has missed a number of targets, with only a fraction of those meant to have received their first injection having done so. The federal government has blamed the delays on a lack of supply from international manufacturers.
The rollout has also been complicated by a recommendation that the AstraZeneca dose – meant to be the mainstay of Australia’s vaccination program – not be administered to those under 50 due to concerns over blood clots.
The missed targets and supply issues prompted the call for National Cabinet – made up of the Prime Minister and state and territory leaders – to return to the “war footing” it was on at the height of the pandemic last year. However, state leaders want more transparency on vaccine supplies and distribution as a precondition for more frequent meetings.
Mr Morrison said an increased reliance on imports of the Pfizer vaccine, as well as Novavax, means the country will have “a substantial number of vaccines in the fourth quarter of this year”. However, Novavax has pushed back the timeline for reaching its production target of 150 million doses per month until the third quarter.
Mr Morrison said that under the new vaccination plan, those aged over 50 could use mass vaccination centres in June and July, where they would receive the AstraZeneca dose.
“We would like this done before the end of the year, but that will only be possible if we can ensure mass vaccination programs in place that can do that in that space in that final quarter,” said Mr Morrison.
NSW Premier Gladys Berejiklian, who has previously recommended setting up mass vaccination centres, said more timely information about the availability of doses would benefit states and the rollout. “Because we’re ready to go to roll out, we just need the doses,” she said.
Australia to withdraw from Afghanistan
Prime Minister Scott Morrison says Australian troops will be withdrawn from Afghanistan by September.
“Australia will conclude the drawdown of our contribution to the NATO-led Resolute Support mission in Afghanistan … in line with the United States and other allies and partners, the last remaining Australian troops will depart Afghanistan in September 2021,” Mr Morrison said.
It follows US President Joe Biden’s announcement that the US will end its 20-year war in Afghanistan from 1 May, with US and allied forces to completely depart no later than 11 September this year.
Mr Biden said there was little justification for the continued presence in Afghanistan, saying it was time to end the “forever war” that was launched in 2001 following the September 11 terrorist attacks in the US.
Australian combat operations in the country ended in 2013, although several hundred troops remained to train and mentor local forces.
About 80 defence personnel remain as part of Operation HIGHROAD, and they will depart alongside their NATO-led coalition colleagues. There are about 7,000 NATO forces in Afghanistan, along with 2,500 US troops.
Analysts said it was inevitable that Australia would remove troops from the country following President Biden’s announcement, although it may continue its defence cooperation in terms of training.
“Without the weight of the American presence it will be harder for Australia to maintain an on-the-ground training presence. We may end up opting for a defence co-operation arrangement doing things like bringing Afghan cadets to Duntroon as the British do at Sandhurst,” CMAX Advisory’s Chief Strategist, Tyson Sara, told The Australian Financial Review.
Economy continues to add jobs
Australia’s unemployment rate has continued to fall, dropping to 5.6 per cent following the addition of 70,700 jobs in March. According to the Australian Bureau of Statistics (ABS), unemployment is now just 0.4 of a per cent above where it was prior to the job losses seen at the beginning of the pandemic.
The number of jobs was significantly higher than expected, with economists forecasting 35,000 jobs to have been added in March, giving an unemployment rate of 5.7 per cent.
Bjorn Jarvis, the head of labour statistics at the ABS, said the latest data showed continued recovery in the labour market into March 2021, with hours worked higher than March 2020, for the first time during the Covid-19 period.
“Employment and hours worked in March 2021 were both higher than March 2020, up by 0.6 per cent and 1.2 per cent,” he said.
Analysts expect the latest unemployment result, which follows February’s 5.8 per cent result, to give the federal government leeway to move towards budget repair in next month’s budget.
Treasurer Josh Frydenberg has said the government would start looking at reigning in spending and paying down debt once unemployment was “comfortably” below 6 per cent; according to Mr Frydenberg, that would be around 5.25 per cent to 5.5 per cent.
The Reserve Bank of Australia, has said unemployment would need to drop to between 3-4 per cent before it lifted official interest rates from the current record low of 0.1 per cent.
Anthony Fauci issues vaccine warning
Infectious disease expert Anthony Fauci has said Australia cannot rely on vaccines and border controls to protect its population from Covid-19.
Speaking as part of an event hosted by the Kirby Institute at the University of New South Wales, Dr Fauci said there would be no freedom from Covid-19 until the overwhelming majority of the world’s population was vaccinated.
“As long as there’s the dynamic of virus replication somewhere, there will always be the threat of the emergence of variants which could then come back,” Dr Fauci said.
He also contrasted the “inconsistent response” of the US in responding to the pandemic, with that of Australia, wth its strict border and lockdown policies.
“You had the capability and the uniformity of your citizens that when you shut down, you really shut down very effectively … you did it in a way which was really quite uniform, but importantly, effective,” he said.
However, while the US vaccine rollout gathers pace – with the country administering a record 4.6 million vaccines in a single day – Australia’s rollout has failed to reach its targets.
Dr Fauci said the key to the success of the US’s vaccination program was focussing efforts at a grassroots level.
“What [US President Joe Biden] has done, for example, is open up community vaccine centres, get vaccines to the pharmacies, develop mobile units to go out to get the people who are in poorly accessible areas,” Dr Fauci said.
Vaccine may not mean open borders
Health Minister Greg Hunt has said vaccination may not be enough to guarantee Australia’s borders will fully open. His comments come as New Zealand begins allowing Australian travellers to enter the country without quarantine.
Mr Hunt suggested the international border closures that have been in place since March 2020 could stay in place even if the entire population had been vaccinated against Covd-19. “Vaccination alone is no guarantee that you can open up,” Mr Hunt said.
“We still have to look at a series of different factors: transmission, longevity [of vaccine protection] and the global impact, and those are factors which the world is learning about,” he said.
Mr Hunt’s comments, and the country’s delayed vaccination rollout, have thrown into doubt Qantas’ plans to restart most of its international network later this year. The airline said it was “closely monitoring the recent developments in the rollout of vaccines in Australia”.
The airline has scheduled flights and is selling tickets to the US, UK and Japan for late October, based on the federal government’s original timeline for completing the vaccine rollout.
Samoa election delivers surprise result
The recent election in the Pacific Island nation of Samoa has left the two major political parties in a deadlock, with the balance of power held by an independent candidate believed to favour change.
The result is a major turnaround for Samoan politics, with the leader of the incumbent Human Rights Protection Party (HRPP), Tuilaepa Sailele Malielegaoi, having been Prime Minister for 23 years and with the government holding 46 of the then 50 seats in the past five-year term.
The opposition Fa’atuatua i le Atua Samoa ua Tasi (FAST) party was only established six months ago, but received strong support from the Samoan diaspora in Australia. While not all are eligible to vote, many still had a major influence by donating to the FAST party’s election campaign.
According to Pacific specialists Kerryn Baker and Asenati Chan Tung, the final result may still be some way off, with legal challenges to the result almost certain.
“While the outcome of the election is still far from certain, it is clear that Samoan democracy has undergone a fundamental shift,” they wrote for the Lowy Institute.
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