Branding behind closed doors

As Victoria works through Lockdown 4.0 without its lead sponsor from last time (North Face), Singapore and Taiwan work through their own restrictions, India tries to come to terms with continuing tragedy, and North America begins to reopen, Australia finds itself at a crossroads. We are now caught between the calm waters of a stimulus-and-health-response-built harbour and the need to act with haste to address a public health emergency. It is akin to sailing ahead of incoming weather back to port. Will we beat the storm? History would suggest we will. 

According to the RBA, Australia’s targeted program through JobKeeper and JobSeeker saved over 700,000 jobs and on average cost $100,000 per job saved. This may sound like a lot, but the U.S. stimulus program saved jobs at over double the number ($224,000 per job). Australia has also been a bright light in the public health response. In a global context (thanks again to John Hopkins) we are upper-mid-table at 35 deaths per million of the population. To date 907 Australians have lost their lives to Covid-19. 

Our closed borders protect us from fully answering this, but yet you can’t help but wonder if we played the first card right, but then we stuck, when we should have doubled down on the flop of herd immunity. Our current aged care scenario certainly makes you raise your eyebrows, but it’s hard to know, impossible to predict, and it all meets the very definition of a paradox. 

Two sides, multiple scenarios

The challenge of a paradox is it’s made up of competing forces on different sides of the same problem. Government particularly struggles with this, as by its very nature it always overcorrects for a problem and is slower to respond. This is especially true if it comes posed as a paradox. 

The Government is not alone. If we look, paradoxes are everywhere. From balancing the daily details of family life to larger scale intertwined problems. Take climate change. On the demand side, extreme weather events cause unprecedented peaks in demand whereas on the supply side the move away from more predictable fossil fuels to variable inputs of wind and solar causes the grid to fluctuate. Better get that battery back-up sorted in time for summer.

The great global balancing act: supply stimuli versus demand dynamics

The Western world is awash in cheap money fuelling demand for everything from fridges to Finnish saunas to Fords. There are also demand constraints everywhere across the world where cars sit 90% finished across Kentucky waiting on a silicone chip from Shanghai to arrive. The choice this poses to any government is what levers do you pull? Do you add in supply or demand capacity? Turns out Josh and Scotty are secret Def Leppard fans after all. They have poured some sugar all over a pot already sweetened through closed borders. Like a child post a bag of skittles, I am not sure we are going to be thanking them for the sugar high in a few years’ time.

Looking for work mate?

I live in a small town these days and outside of periods of lockdown the daily pre-work convo at the cafe has gone from who has work still to...know anyone looking? While certainly not a representative sample, it does represent all types of professions. Whether it’s the builder who can’t find a labourer on a job site, or the farmer looking for day labour, the closed borders has brought our unemployment rate down faster than it went up. But with a massive catch. We have gone from a scenario where we were worried about keeping people in jobs, to a workforce that is not matched to the tsunami of money that has been poured into our economy. Great for your short-term election hopes as constraining supply inflates wages and arguably allows you to claw back some of your stimulus money through PAYG. But bad for longer term GDP and ultimately brand Australia.

One country, two super cycles

If Australia did a perceptual map of our core competencies as a country, we have two...and neither of them are called luck. We are leaders in Mining and Migration.

Mining

We lead the world in our ability to generate yield from the red earth we call home. For anyone who has not been to the Pilbara all you need is a hammer. Unlike Brazil, or other mineral rich countries, we have combined our natural advantages with the infrastructure to deliver our ore to the world’s steel ovens. We have done the same with our capability in food. If we can bridge the gap from coal to cleaner minerals, one of our super cycles will continue for the foreseeable future. It is the other one we should be worried about.

Migration

Beneath the veneer of the Lucky Country myth is a simpler truth. We are actually lucky to have you, Country. This is especially true of the state of Victoria who likes to talk to our strength as a services hub, but really we are better described like our old license plates used to: an (reliant on overseas) education state. We rely on migrants as population growth has historically covered up for lack of productivity. We rely on consumption increasing through more people rather than more overall income per person.

Destination = Education = Migration 

Brand positioning is the image we want others to have when they think of us. We sell three things to the world as a nation. We sell a destination image, an education image and a migration image, and now all are being reshaped by the realities of the pandemic.

Destination image

In 2019, the last full year before we closed the borders, 9.4 million international visitors came to Australia. This amounted to 3.1% of our GDP and employed nearly 6% of Australians. Our image is driven by distance (it’s a different world) and uniqueness. We are a unique combo of city, safety, beach, nature and friendliness. Lots of places have beaches but not all have a sophisticated, accessible culture to add to the backdrop. 

Education image

The Ranking of Top Universities, an aggregation of all major top 200 education institutions, ranks Australia’s universities at 4th and on a per capita basis we lead the world. That’s the good news, the bad news is that it’s a lagging indicator and while we have more universities placed overall, the top two Chinese universities now come in at 18th and 27th internationally, ahead of our lead horse, Melbourne at 29th. That matters; but what matters most is the business model our universities use, and the margin made on international students (worth twice as much) to fund research (which drives rankings in the main). International students pay more to study here because our universities are rated highly, and our skills first immigration policy offers a pathway to permanent residency. Study the right thing and stay here. 

Migration image

Australia is a great place to live. Thanks to the historical strength of our unions we have high wages, we have a stable democracy and, as I say to my parents, sweating in a heat wave beats freezing in a cold snap. I am not alone in the love affair. There were over 7.6 million migrants living in Australia and 29.8% of our population were born overseas. Covid has snapped what was a steady addition (round 200k per annum) to a decrease of 7.4% in 2020 while a further 315,200 overseas migrants left, the highest estimate on record. 

This leaves us with work to do to rebuild the second cycle that underpins our envious lifestyle. While government spending is great, it’s also important to understand that Covid-19 has cut off a vital source of economic growth. Getting your jab is turning into an act of national strategic importance rather than the right thing to do as a citizen. 

—
Be better to each other.