Coronavirus and local economic resilience/development
Coming to terms with local economic implications in the middle of a global health crisis is challenging. First and foremost - health of communities needs to be prioritised, then we can respond to the economics. When we do - here are a few of our thoughts.
Below is a quick summary of conversations/social media rants in which I have been involved in recent weeks – each focussing on where there may be opportunities to deliver meaningful outcomes to local economies/communities in this unprecedented time. I’m sending this on the off-chance that these thoughts might be useful – otherwise please delete.
Disclaimers: Much of below is out of the control of any individual/group, except in advocating on behalf of communities to other levels of government/agencies. All ideas are certainly uncosted and are not intended to represent a coherent economic development program at this time. None of this is new, and some of it is already enacted in different jurisdictions. Finally, everything is changing so fast that I reserve the right to backflip on a moment’s notice!
Firstly, it is important to recognise that this crisis is likely to have distinct phases to it. We will be different from other places that have already been through this, in that the global economic impacts will be hitting us before the health. On this basis, phases potentially include:
Initial economic hit/panic – we are all experiencing this right now – health impacts are limited, but macro and microeconomic impacts including limits to movement/trade felt - with associated disempowerment and anxieties;
Health impacts hit – communities will start to feel the personal effects of the virus, with economic priorities being secondary to health concerns. Impacts will lead to more stringent local restrictions and potential for significant disruptions to local and traded supply chains;
Normalisation of virus life – communities adapt to a new normal, with more virtual meetings/engagement, mandatory self-isolation if ill, limited travel and potential scarcity of goods (and jobs). The economy can be stimulated as trade adapts to new conditions and new opportunities;
Medium-term recovery – Functional economic conditions return, but potentially are significantly different to conditions prior-virus. Opportunities will exist to encourage transformative projects that foster local prosperity and resilience.
In the coming months, we should not be talking about ‘stimulus’. Stimulus implies there is something to stimulate. What we need now are measures that ensure there is a functional economy to stimulate by Phase C: This might include initiatives such as:
A social distance dividend to offset the sacrifice of all members of the community for the period of social distancing (lockdown). The dividend should be equivalent to a living wage. Given massive budgetary impacts, it may be made available once all employer leave entitlements are expended;
Publicly backed lines of credit for trade debtors including banks and trusts (an absolute necessity if you want to enforce rent/mortgage holidays);
Rent-holidays on any Fed/State/LGA owned assets and advocacy for rent/mortgage holidays for households and small businesses;
Freeze/subsidise essential services including broadband internet - given its role in keeping the economy flowing;
Promotion and coordination of workforce to seasonal opportunities – regional communities are struggling to access a casual workforce for crop seeding. Linking casuals with these opportunities;
Publicly protected supply chains for essentials to remote and vulnerable communities – ensure those at the end of supply chains aren’t missing out as they inevitably become disrupted;
Support localisation of supply chains - foster distribution of local produce to those in need;
Targeted support programs to incorporated associations who deliver services to local communities and are significant employers but potentially fall between the cracks of current stimulus packages;
Local infrastructure grants program that targets easy/quick to implement public realm projects that are designed and delivered by local enterprise;
Workforce skills – vouchers for local workers made redundant/unpaid leave due to coronavirus to get online training support to develop new skills that they could do whilst in isolation;
Virtual spaces and programs provided by local co-working/startup services to support those wishing to explore opportunities to start their own business/develop an idea whilst they are in isolation;
Coordination of virtual festivals – local performing arts communities to put on a couple of days of entertainment via one of the free-to-air tv stations/online streaming. Facilitate donations aka telethon (god knows we’ve sat through that for years for a good cause). Given the lack of content for secondary stations without sports, this could roll on every weekend. Utilise regional channels to provide local content;
Sensible suspension of ‘change of use’ planning processes for discretionary uses to allow businesses to trial new initiatives/business models without hindrance; and
Shortened payment terms for local business – pay on 7-day terms to terms to local suppliers to help support cashflow.
Be a little cautious in focussing on industry-specific stimulus right now. Almost every industry and supply chain is going to be massively disrupted and seek support. You might find it hard to ignore precedents as this gets worse. There may be some industries that are too-big-to-fail, but I’d suggest being very careful about just focussing on the first impacted. Targeted stimulus packages can come in Phases c) and d) once the supply and demand-side shocks start to subside. Focus on the safety net.
Also, be cautious about planning for a V-shaped collapse and recovery. Yes, the Chinese and others will likely pump massive capital into projects, and that might be good for the resources sector and GSP/GDP. Such activity will take a long time to trickle down into local economies.
Consumers will be hit hard by this crisis. Savings will be depleted, lost jobs may not return, and confidence will take a hit. It might be best to focus on place-based stimulation that makes a very local difference over larger big-ticket programs. We may need to literally go business-to-business, entrepreneur to entrepreneur, worker to worker to develop meaningful local stimulus in Phase c).
Again, the above is shared on the chance that something may be useful in your work and thinking.
Let’s support each other in championing our communities in coming months. Hopefully we can help foster something great from this very challenging time! Stay well and in touch!