The leaders of several S&P/ASX 200 Index companies are worried enough about the COVID-19 political discourse that they have penned an open letter.
The chief executives of 80 companies that employ nearly one million workers sent the letter to major newspapers calling on state premiers to stick to the national reopening plan, reported the Australian Financial Review.
The fear is that the haphazard reopening of Australia will deepen the expected contraction in GDP in the September quarter.
Top ASX 200 companies backing COVID reopening plan
The letter was signed off by the bosses of some of the largest ASX 200 shares. These include mining giant BHP Group Ltd (ASX: BHP) and leading retailers like Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL).
Other ASX large cap shares that put their name to the letter include Telstra Corporation Ltd (ASX: TLS) and Qantas Airways Limited (ASX: QAN) – just to name a few.
No premiers were singled out, but we are all looking at you Western Australia! Its leader Mark McGowan has been most vocal about keeping his state boarder shut even if 80% of the population was vaccinated.
Balancing growth with COVID protection
That goes against the national plan that's based on research by the Peter Doherty Institute. The national plan, which was supposedly agreed to by the federal and all state governments, would make lockdowns largely a thing of the past once four-in-five Aussies have been fully vaccinated against COVID.
At that point, all state borders should be reopened and businesses would be allowed to operate under COVID-safe rules.
ASX 200 leaders urging premiers to stick with Doherty
The open letter is backing the reopening plan and the leaders of these ASX 200 companies believe the Doherty Institute struck the right balance in protecting Aussies and our economy.
"We ask governments to work together to implement the National Plan and chart a path out of the current lockdowns," The AFR quoted the letter as saying.
"Providing a light at the end of the tunnel will encourage more Australians to get vaccinated. We need to give people something to hope for, something to look forward to, something to plan around, and to be confident about their futures."
Dodging the dreaded "R" word
Economists expect Australia's September quarter GDP to shrink between 2% and 4.5%. This is the period when the lockdowns in Victoria and New South Wales will be most acutely felt.
It was good fortune that Australia's economy didn't go backward in the June quarter. The GDP data released today showed a stronger than expected 0.7% increase.
Foolish takeaway
If the economy went backwards in the June quarter, Australia would almost certainly have fallen into a recession. The technical definition of a recession is two consecutive quarters of negative GDP readings.
Now our political leaders only need to ensure we get a nice rebound in economic activity in the December quarter while managing the pandemic.
Not an easy tightrope to walk, but that's why they get paid the big bucks.
