Aussie companies blast 'knee-jerk' COVID-19 border closures

A new outbreak in Adelaide has freaked out some states. But businesses say clusters can be managed locally without ruining the economy.

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Australian businesses have criticised state governments for immediately closing their borders in reaction to a new COVID-19 cluster in Adelaide.

South Australians have been told to wear masks in public after 20 locally acquired cases of coronavirus were found in the capital city.

Western Australia, Tasmania and the Northern Territory immediately shut its borders to anyone travelling from South Australia.

Employer group AI Group's chief executive Innes Willox said COVID outbreaks could be resolved locally without interstate travel bans every single time they occur.

"A knee-jerk border closure sends a clear but terrible message to investors and nationally focused employers that there can be no regulatory certainty to doing business in Australia."

The Business Council of Australia (BCA) represents many of the biggest ASX-listed companies, such as Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking GrpLtd (ASX: ANZ), Macquarie Group Ltd (ASX: MQG), AGL Energy Limited (ASX: AGL), BHP Group Ltd (ASX: BHP), Coca-Cola Amatil Ltd (ASX: CCL), Coles Group Ltd (ASX: COL), Wesfarmers Ltd (ASX: WES), Telstra Corporation Ltd (ASX: TLS), Scentre Group (ASX: SCG), and Qantas Airways Limited (ASX: QAN).

NSW demonstrated COVID-19 outbreaks could be managed with contact tracing and local containment, said BCA chief Jennifer Westacott.

"Rather than a confidence-destroying stop-start approach, we have to learn from what we've already been through to better manage outbreaks as they happen," she told The Motley Fool.

"With the right systems in place for tracking and tracing and local containment, there is no reason we can't manage outbreaks safely, keep borders open and create much needed new jobs."

Is the federation broken?

Willox agreed, saying local clusters are a chance for state health systems to show their testing and contract tracing regimes are up to scratch.

"By closing their borders, states are making it clear they have no faith in their systems and are prepared to inflict enormous economic pain on each other and themselves."

He said the spontaneous closing of state borders only showed the business sector that "our federation is irretrievably broken".

"The agreed national strategy sensibly does not aim for elimination and states that go for this approach are following a road to economic ruin."

Adelaide's outbreak has been attributed to a person who worked in the state's hotel quarantine system.

Unfortunately, 17 of the 20 cases were reportedly within one extended family, and some of those members attended work in high-risk sites like a nursing home and jail.

Victoria's second wave that shut the state down from July to October is also believed to have been triggered from a biosecurity breach at hotel quarantine.

Market reaction to the latest state border closures could not be ascertained, due to computer troubles shutting down trade on the ASX on Monday.

Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited and Qantas Airways Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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