An Australia–NZ travel bubble needs a unified COVID contact-tracing app. We’re not there

Mahmoud Elkhodr, CQUniversity Australia

New Zealand’s coronavirus contact-tracing app COVID Tracer was revamped yesterday.

It now uses the Bluetooth-based Google/Apple exposure notification (GAEN) framework. This allows Android and Apple (iOS) devices to communicate via a contact-tracing mechanism built into the devices’ operating systems.

Meanwhile, Australia continues to use the COVIDSafe app, which also uses Bluetooth, but with a different underlying system.

With both countries indicating they’ll likely wait several weeks before a vaccine rollout, current trans-Tasman travel arrangements continue to be a protective barrier.

Quarantine-free travel is allowed from New Zealand to certain safe travel zones in Australia, as long as travellers haven’t visited a New Zealand COVID hotspot in the preceding fortnight.

As of tomorrow, Queensland will be included in the safe zones. Discussions around expanding the “travel bubble” further are ongoing.

But in this context, New Zealand’s COVID Tracer upgrade is unlikely to help as both countries are using different contact tracing systems that can’t communicate.

Comparing COVID Tracer and COVIDSafe

COVID Tracer requires Bluetooth to work.

While COVIDSafe and COVID Tracer both use Bluetooth to determine proximity between users, and log close contacts with “digital handshakes”, both apps have different approaches to reporting close contact information to authorities.

If a COVID Tracer user tests positive for COVID-19, they can alert close contacts who also have the app. These contacts then receive a notification and are advised to self isolate.

New Zealand health authorities can’t know the contacts’ details at any point unless they themselves come forward.

On the other hand, if a COVIDSafe user tests positive, they can choose to send information about their close contacts directly to Australian health authorities — who can then follow up with manual contact tracing.

Will the apps help form a travel bubble?

Both COVIDSafe and COVID Tracer use different underlying systems and therefore can’t work together. This means Australians visiting New Zealand would have to download the COVID Tracer app and use it throughout their visit.

If a COVID Tracer user tests positive for COVID-19 they can alert their close contacts, who are advised to call a healthline, wear a mask and stay away from public spaces.

Similarly, a New Zealand resident visiting Australia would need to download and use COVIDSafe. But this may not be possible for many, as setting up COVIDSafe requires a verified Australian phone number and postcode.

And even if travellers do use the other country’s app during their visit, this alone won’t mitigate the risk of bringing home the coronavirus.

For instance, if they contract the virus shortly before returning home (from someone who didn’t know they were infectious) and then delete the app as soon as they return, the news of potential infection won’t reach them.

Global approaches

The Australian government reportedly updated COVIDSafe last month to address its previous functionality issues, particularly for iPhone users.

While the update was needed, critics pointed out adopting the GAEN framework would have been a better option, as it’s more reliable and lays a foundation for cross-border contact tracing.

It’s also relatively straightforward to redevelop existing apps to integrate it within them.

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But even if COVIDSafe were redeveloped to adopt this framework, developers would still need to put in time before both COVIDSafe and COVID Trace could work together.

Such a cohesive cross-border contact-tracing solution would also require agreement by both countries on several fronts, including policies governing the technology, data access permission and the location of physical data servers.

That said, this isn’t impossible.

Australia and New Zealand could choose to follow the European Union’s efforts. Several EU member states, including Germany, Italy and Ireland, have adopted an EU-established service called the “gateway”.

This map shows which EU member states have a national contact tracing app using the ‘gateway’ system.
EU, CC BY

The gateway acts as a middle man which relays information between
different EU countries’ contact-tracing apps. Contact tracing can still occur while a person is travelling between the various countries, as long as their home country’s app has adopted the gateway system.

Where to from here?

Using mobile-based technologies for contact tracing comes with a range of challenges. Besides the issues discussed above, it’s also crucial for contact-tracing systems to be widely adopted by the communities they’re meant to service.

This has proven challenging. Uptake of COVID-19 contact-tracing apps remains low globally, despite governments pushing for mass use.

Meanwhile, Bluetooth itself is fallible. Determining distance between two devices using Bluetooth has limitations, since signal strength (and therefore accuracy) can be impacted by environmental factors.

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For example, the signal may be weaker if a phone is kept inside a thick pocket. Or the app may pick up a signal from someone on the other side of a wall, with whom the user never came into contact.

There’s probably no quick fix. But if more time and effort are invested, we may discover a more suitable technology that can provide secure cross-border contact tracing, which also doesn’t impinge on users’ privacy.

Mahmoud Elkhodr, Lecturer in Information and Communication Technologies, CQUniversity Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

View from The Hill: New Zealand arrivals inject new irritation into federal-Victorian tensions

Michelle Grattan, University of Canberra

Victoria Premier Daniel Andrews’ angst at the weekend about the multiple New Zealanders who arrived in Victoria via the travel bubble from New Zealand to New South Wales is, as much as anything, a pointer to the pressure the premier is under.

Andrews says his state chose not to be part of the bubble at this stage and he didn’t know these people were coming to Victoria. Now, he says, 55 have “turned up” from NZ.

The federal government counters that Victoria was at the meeting of the federal-state health officials committee where issues of New Zealanders travelling on were canvassed.

Andrews claims when Victoria asked the feds for details of the arrivals they were slow to pass it on. The feds deny a delay but say dealing with internal border issues is up to the states anyway.

The point is, this is a dispute of little consequence. New Zealand doesn’t have community transmission – the visitors are at the very bottom end of risk.

Andrews might be annoyed that these New Zealanders, and thus the Morrison government, have found a way to circumvent his refusal to sign up to the COVID “hotspot” definition and become part of the (one way) trans-Tasman bubble.

But Victoria has an open border for people going in (it’s a different matter for those exiting, for whom other states make the rules). So provided they’re told to abide by the current state restrictions, the presence of the New Zealanders is neither here nor there.

Western Australia is also complaining about New Zealand arrivals – it is in a rather different position because it has a hard state border.

The overall takeout is that those travelling from New Zealand in the “bubble” – which also involves the Northern Territory – might need to be given more information about the restrictions in particular states and internal borders before they leave NZ.

The micro takeout is that Andrews is picking an unnecessary fight. The verbal Victorian-federal tennis match over the New Zealanders is another indication of the tensions between the two governments.

Federal ministers tried to twist Andrews’ arm ahead of Sunday’s announcements about the next stages of opening in Victoria.

Andrews announced a range of restrictions would be relaxed from midnight. People can travel 25 kilometres from their home for shopping and exercise (widened from five). Groups of up to ten from two households will be able to gather in an outdoor places for exercise or a picnic.

Hairdressers can open, but people can’t have visitors over to watch next weekend’s AFL final (played in Queensland).

Retail isn’t scheduled to reopen open until November 2, when restaurants will be open to diners (with limits), and people will be able to leave home for any reason.

With new cases in single figures for the last five days, Andrews indicated the timetable could move faster than outlined.

The politically embattled premier is determined to minimise risks in bringing the state out of lockdown. The federal government and business community continue to rail. Andrews may judge that he’s taken the attacks from those quarters and the greater immediate danger to him is the possibility of a fresh tick-up in virus numbers.

The eventual fallout – in lost businesses, in the public’s judgement of Andrews – will be months, possibly years, in the coming.

In the meantime, whether his ultra-caution is excessive or well-judged will be fiercely debated.

He maintains it’s all on the health advice.

When asked how come his advice was at odds with the position of the federal government and epidemiologists who disagree with him, his edginess was obvious.

“I will put it to Minister [Greg] Hunt and anybody else
who has a view about these things, I don’t accept that anybody has a more complete picture of what this virus is doing in Victoria than the Victorian chief health officer, the Victoria deputy chief health officer, the Victorian health minister and the Victorian premier.” And so he went on.

Some Victorians will welcome the timetable as tangible hope in a bottle. More than a few small business owners will see the hairdresser across the road opening and ask, why not us?

The Australian Industry Group described the announcement as “plodding steps in the right direction”, while raising a nightmare scenario, saying businesses “still have no certainty that [they] will not be forced to shut again after they have been allowed to reopen”.

The federal government’s impatience with Victoria was on show again in a Sunday statement from Prmie Minister Scott Morrison, Treasurer Josh Frydenberg and Health Minister Greg Hunt, which highlighted economic and mental health costs.

“Victoria’s three-day rolling average is now below two cases per day. Maintaining this result will make a strong case for the retail and hospitality sectors to reopen before the next review date in November,” they said.

“The continued health, mental health and financial impacts of these restrictions will be profound on many Victorians. That is why we encourage Victoria to move safely and quickly towards the NSW model of strong contact tracing and a COVID-Safe but predominately open economy.”

As Morrison and the ministers say, “the national picture is a positive one” in terms of case numbers and handling them. Yet politically, the national handling of COVID continues to fray.

The conflicts around the blunders and inadequacies that led to the Victorian second wave, the imminent Queensland election in which Premier Annastacia Palaszczuk is relying substantially on her COVID record, with its tough border policy, and WA’s semi-secessionist mindset are all straining the federation.

The national cabinet initially managed dissent among the various governments. But presently the disunity is swamping the unity.
To the extent possible, it is important Morrison keep together what has become an unwieldy beast.

While COVID in Australia may be substantially under control when we say a thankful goodbye to 2020, 2021 will be a challenging year that would only be made more difficult by excessive fractiousness within the federation.

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

One-way trans-Tasman travel bubble to start mid-October

AAP/Bianca de Marchi

Michelle Grattan, University of Canberra

The first stage of a trans-Tasman travel bubble will start from October 16. But it will only be one-way – from New Zealand – and to limited parts of Australia.

Deputy Prime Minister Michael McCormack announced on Friday that people from New Zealand who hadn’t been in a COVID “hotspot” for a fortnight will be allowed into NSW and the Northern Territory without quarantining.

The hot spot definition is the one adopted by the federal government.

It uses a three-day rolling average of three locally acquired cases per day, over three days. Prime Minister Scott Morrison was not able to get this definition accepted by all participants at national cabinet some weeks ago.

States and territories wanting to receive travellers from New Zealand have to agree to the hotspot definition for that purpose.

Under the definition there are currently no COVID-19 hotspots in New Zealand.

McCormack indicated South Australia was likely to be the next state to receive people from New Zealand without quarantine. It has had some issue with the hotspot definition.

There is no indication when New Zealand will accept people from Australia.

McCormack said the establishment of quarantine free travel would free up space to allow more Australians to return home.
It would allow an additional 325 passengers a week to enter quarantine in Sydney,

He said if Queensland were to accept the hotspot definition another 250 quarantine places could be freed up.

Apart from tourists, the government hopes the limited opening will see shearers and other agricultural workers come to Australia, Orchardists have been appealing for pickers.

But New Zealand Prime Minister Jacinda Ardern said New Zealanders returning from Australia would have to quarantine.

“The decision for us is safety. In our view, we are not ready to have quarantine-free travel with Australia. They have a very different strategy than us.”

She added “I do encourage Kiwis to think about spending their money here locally.”

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

What is the COVID ‘bubble’ concept, and could it work in Australia?

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Mary-Louise McLaws, UNSW

The concept of a COVID-19 “germ bubble” refers to close contacts with whom we don’t practise mask use or keep physical distancing. In strict lockdown, this generally means just the members of your own household. But several countries, such as New Zealand and the United Kingdom, have experimented with bubbles larger than a single household.

Victorian Premier Dan Andrews will unveil a roadmap out of restrictions on Sunday. Many will be keen to see if a bubble strategy is part of this, after Chief Health Officer Brett Sutton confirmed the concept is under “active consideration”.

Extended bubbles mean your household can nominate other people or households with whom you could have close contact. These would need to be exclusive, so the infection risk is contained, and your nominated households would be required to live in the same town or city.

It’s a way of balancing the risk of exposure to COVID-19 with our need for social interaction, allowing vulnerable and isolated people to have social connections to help cope with the stress of a pandemic.

While the idea undoubtedly comes with risks, it’s crucial for governments to implement restrictions with compassion. A pandemic is a marathon, not a sprint, and if people feel that policies are crafted with compassion they may be more likely to adhere to restrictions in the long run.

Bubbles across the Tasman

In the current lockdown in Victoria, the germ bubble is restricted to people in our immediate household. Only those in an “intimate relationship” are allowed to visit each other.

This increases loneliness and has a large impact on mental health. And, understandably, it has left many single people and people from differing family structures frustrated.

The bubble idea tries to overcome this by allowing people to have close contact with a very defined and exclusive group. It’s a relatively new concept, and was not used in the management of the SARS epidemic in 2003.

New Zealand was the first country to implement an extended bubble during COVID-19, allowing people to have close contact with family members outside their household, under its “alert level 3” restrictions. Its bubble extension was a compassionate solution to the mental health effects of strict lockdowns.

New Zealand’s approach was not just compassionate, but realistic about the modern social structure.

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Socially, our important connections are complex and culturally diverse. Our understanding of who is family includes blended families, step-family members, partners, lovers and close friends — all of whom may not share our dwelling.

Nominating members into a compassionate germ bubble may benefit the community in the long run as we move in and out of lockdown.

A bubble approach was also used in the UK when easing restrictions in June, allowing single-person households to form a bubble with one multi-person household.

What about the risks?

Despite the social benefits, there are indeed risks with a virus as infectious as SARS-CoV-2. The advantages of a compassionate approach to mental well-being must be weighed against any infection transmission disadvantages.

If a bubble system was to be implemented anywhere in Australia, a formalised process for joining a germ bubble would be needed. The maximum number of people allowed in any single bubble would also have to be limited.

The bubble would need to be exclusive. If you were “bubbling” with one household, you could not just decide to change to a different one whenever you please. If you did need to alter your bubble, there would have to be a 14-day gap between one set of people leaving and another group joining, to reduce the risk of transmission between bubbles.

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A bubble tracker app could facilitate the nomination process. The app would need to include consent to join by both, or all, parties. A bubble system would also need to consider what to do with different areas of varying degrees of transmission.

For example, if one member of a multi-household bubble lives in an area of very high community transmission, this brings a greater risk to the whole bubble, even if other members of the bubble are in areas of low transmission. It means the virus could enter areas of low transmission via these bubbles. People can also pose a greater degree of risk to their bubble if they work in a risky zone or occupation.

In epidemiology, our aim is to reduce risk as much as possible, but in a long pandemic we have to leave room for compassion (without increasing the risk for the wider community).

Compassionate policies breed compliance

Isolation causes stress and may reduce cooperation. But a compassionate germ bubble may foster resilience by reducing a sense of isolation for people living alone and friends, extended family and partners distressed by the separation.

Developing a compassionate bubble for our future lockdown plans may also help us endure a lengthy pandemic that features multiple lockdowns and ringfencing of hotspots when required. Compassion may improve the community’s willingness to adhere to restrictions rather than merely being forced to comply.

Authorities who respond scientifically may be viewed by their community as competent and reliable. But there cannot be a ration on compassion. A safe and compassionate plan will ensure there is little incentive for some to game the system by joining multiple germ bubbles. A compassionate approach, coupled with the appropriate checks and balances, could lead people to view authorities as trustworthy and capable of leading us safely out of COVID-19.

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Mary-Louise McLaws, Professor of Epidemiology Healthcare Infection and Infectious Diseases Control, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

COVID-19 provides a rare chance for Australia to set itself apart from other regional powers. It can create a Pacific ‘bubble’

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Peter Draper, University of Adelaide and Jim Redden, University of Adelaide

For a short time Australia has an unrivalled opportunity to set itself apart from donors to the Pacific including China, Japan and the European Union.

As Victoria’s current COVID-19 spike shows, it will take Australia some time to open its borders to the world and allow residents to travel wherever they like.

But there’s no reason why it shouldn’t open its borders to some parts of the world sooner than others, especially those in which it has a special interest and in which the spread of coronavirus is slowing.

Australia and New Zealand have been talking about setting up a trans-Tasman “travel bubble” for some time.

It would allow quarantine-free travel between two geographically-isolated island nations that face little risk of outside infection.

Fiji has already expressed interest in joining, extending the bubble.

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Why a trans-Tasman travel bubble makes a lot of sense for Australia and New Zealand

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Throughout the South Pacific, youth unemployment averages over 23%. Tourism accounts for as much as half of gross domestic product and up to one in four jobs.

A bubble that extended beyond tourism to trade, education, and guest workers could help the Pacific (and holidaying Australians) in a way that the generous loans available from powers such as China could not.

Much of the architecture for a trade and tourism bubble is already in place.

The trade and investment agreement known as the Pacific Agreement on Closer Economic Relations (PACER) Plus concluded in Brisbane on 20 April 2017.

Good for Australia, good for the region

The agreement encompasses Australia, New Zealand and nine Pacific island countries: the Cook Islands, Kiribati, Nauru, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. It has been ratified by five of the members and will come into force when it is ratified by eight.

For the Pacific Islands, a “bubble” would provide a major boost to economic development and recovery from the crisis.

It could help relieve the social pressures that come from growing youth populations and attendant unemployment and minimise the danger of future political crises and associated need for Australian interventions and financial support.

The long-term importance of continued access to quality education, vocational and tertiary, for Pacific Islander youth is essential. Hard-pressed Australian Universities and vocational education suppliers would benefit too.

For Australia (and New Zealand) it could provide relief from isolation via travel to attractive destinations. Perhaps more importantly, it could help fill gaps in Australia’s skill set by supplying tradespeople and agricultural workers to meet genuine shortages.

It would also help maintain Australia’s business and investment interests in the Pacific. PACER Plus implementation would reinforce these gains. It will facilitate more investment and trade opportunities, in goods and services.

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Unfortunately, Fiji and Papua New Guinea have not yet signed PACER Plus, for various reasons.

It is unfortunate because trade and investment flows are their best long-term route to advancement. There are strong economic complementarities between Australia and Pacific nations, especially for Papua New Guinea.

A bubble, implemented when the health situation allows, would be supported by many Pacific islands nations and most likely their regional coordinating body, the Pacific Island Forum Secretariat.

Together with PACER Plus implementation, it would benefit Australia and benefit the region in a way that aid and infrastructure support from big powers can not.

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Sun, sand and uncertainty: the promise and peril of a Pacific tourism bubble

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Peter Draper, Executive Director: Institute for International Trade, University of Adelaide and Jim Redden, Senior Lecturer & Visiting Fellow, Institute for International Trade, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Sun, sand and uncertainty: the promise and peril of a Pacific tourism bubble

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Regina Scheyvens, Massey University and Apisalome Movono, Massey University

Pacific nations have largely avoided the worst health effects of COVID-19, but its economic impact has been devastating. With the tourism tap turned off, unemployment has soared while GDP has plummeted.

In recent weeks, Fiji Airways laid off 775 employees and souvenir business Jack’s of Fiji laid off 500. In Vanuatu 70% of tourism workers have lost their jobs. Cook Islands is estimated to have experienced a 60% drop in GDP in the past three months.

In response, many are calling for the Pacific to be included in the proposed trans-Tasman travel corridor. Such calls have come from tourism operators, politicians and at least one health expert.

Quarantine concerns aside, there is economic logic to this. Australians and New Zealanders make up more than 50% of travellers to the region. Some countries are massively dependent: two-thirds of visitors to Fiji and three-quarters of visitors to Cook Islands are Aussies and Kiwis.

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Cook Islands has budgeted NZ$140 million for economic recovery, but this will increase the tiny nation’s debt. Prime Minister Henry Puna has argued for a limited tourism bubble as soon as New Zealand relaxes its COVID-19 restrictions to alert level 1. Cook Islands News editor Jonathan Milne estimates 75-80% of the population is “desperate to get the tourists back”.

A Pacific bubble would undoubtedly help economic recovery. But this merely highlights how vulnerable these island economies have become. Tourism accounts for between 10% and 70% of GDP and up to one in four jobs across the South Pacific.

The pressure to reopen borders is understandable. But we argue that a tourism bubble cannot be looked at in isolation. It should be part of a broader strategy to diversify economies and enhance linkages (e.g. between agriculture and tourism, to put more local food on restaurant menus), especially in those countries that are most perilously dependent on tourism.

Over-dependence on tourism is a trap

Pacific nations such as Vanuatu and Fiji have recovered quickly from past crises such as the GFC, cyclones and coups because of the continuity of tourism. COVID-19 has turned that upside down.

People are coping in the short term by reviving subsistence farming, fishing and bartering for goods and services. Many are still suffering, however, due to limited state welfare systems.

In Fiji’s case, the government has taken the drastic step of allowing laid-off or temporarily unemployed workers to withdraw from their superannuation savings in the National Provident Fund. Retirement funds have also been used to lend FJ$53.6 million to the struggling national carrier, Fiji Airways.

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Fiji has taken on more debt to cope. Its debt-to-GDP ratio, which ideally should sit below 40% for developing economies, has risen from 48.9% before the pandemic to 60.9%. It’s likely to increase further.

High debt, lack of economic diversity and dependence on tourism put the Fijian economy in a very vulnerable position. Recovery will take a long time, probably requiring assistance from the country’s main trading partners. In the meantime, Fiji is pinning hopes on joining a New Zealand-Australia travel bubble.

Rarotonga International Airport: three-quarters of visitors are Aussies and Kiwis.
http://www.shutterstock.com

Out of crisis comes opportunity

Supporting Pacific states to recover is an opportunity for New Zealand and Australia to put their respective Pacific Reset and Step-Up policies into practice. If building more reciprocal, equitable relationships with Pacific states is the goal, now is the time to ensure economic recovery also strengthens their socio-economic, environmental and political infrastructures.

Economic well-being within the Pacific region is already closely linked to New Zealand and Australia through seasonal workers in horticulture and viticulture, remittance payments, trade and travel. But for many years there has been a major trade imbalance in favour of New Zealand and Australia. Shifting that balance beyond the recovery phase will involve facilitating long-term resilience and sustainable development in the region.

A good place to start would be the recent United Nations Economic and Social Commission for Asia and the Pacific report on recovering from COVID-19. Its recommendations include such measures as implementing social protection programs, integrating climate action into plans to revive economies, and encouraging more socially and environmentally responsible businesses.

This is about more than altruism – enlightened self-interest should also drive the New Zealand and Australian agenda. Any longer-term economic downturn in the South Pacific, due in part to over-reliance on tourism, could lead to instability in the region. There is a clear link between serious economic crises and social unrest.

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At a broader level, the pandemic is already entrenching Chinese regional influence: loans from China make up 62% of Tonga’s total foreign borrowing; for Vanuatu the figure is 43%; for Samoa 39%.

China is taking the initiative through what some call “COVID-19 diplomacy”. This involves funding pandemic stimulus packages and offering aid and investment throughout the Pacific, including drafting a free trade agreement with Fiji.

That is not to say Chinese investment in Pacific economies won’t do good. Rather, it is an argument for thinking beyond the immediate benefits of a travel bubble. By realigning their development priorities, Australia and New Zealand can help the Pacific build a better, more sustainable future.

Regina Scheyvens, Professor of Development Studies, Massey University and Apisalome Movono, Senior Lecturer in Development Studies, Massey University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Beyond travel, a trans-Tasman bubble is an opportunity for Australia and NZ to reduce dependence on China

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Hongzhi Gao, Te Herenga Waka — Victoria University of Wellington and Monica Ren, Macquarie University

When it comes to our economic over-reliance on China, New Zealand consumers need look no further than their most popular big box chain, The Warehouse. The familiar “big red shed” sourced about 60% of its home brand stock from China in 2017 – and a further NZ$62 million in products directly through offices in China, India and Bangladesh in 2019.

In Australia, many major chain stores as well as online retail giant kogan.com are in a similar position. Reliant on China for much of what they sell, including exclusive home-brand items, they are part of what has been described as the world’s most China-reliant economy.

The COVID-19 crisis has thrown Australian and New Zealand businesses’ dependence on China into stark relief. With countries reportedly competing with and undercutting each other to secure desperately needed medical supplies from China, many are now waking up to their economic exposure to a single manufacturing giant.

Understandably, discussions about creating a “trans-Tasman bubble” between Australia and New Zealand have focused on kick-starting economic activity in the short term, particularly through tourism. But both countries also need to take a longer-term view of boosting economic activity – including through increased manufacturing and trade integration.

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The statistics support this. In 2018, 20% of global trade in the manufacturing of “intermediate” products (which need further processing before sale) came from China. Chinese manufacturing (including goods made from components made in China) also accounted for:

• 35% of household goods
• 46% of hi-tech goods
• 54% of textiles and apparel
• 38% of machinery, rubber and plastic
• 20% of pharmaceuticals and medical goods
• 42% of chemical products.

Australia and New Zealand are no exception, with China the number one trading partner of both. Australia earned 32.6% of its export income from China in 2019, mostly from natural resource products such as iron ores, coal and natural gas, as well as education and tourism.

Inside a Bunnings store in Australia: many of the shelves would be empty without goods sourced from China.
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From New Zealand, 23% of exports (worth NZ$20 billion) went to China in 2019, and much of the country’s manufacturing has moved to China over the past 20 years. The China factor in New Zealand supply chains is also crucial, with a fifth of exports containing Chinese components.

Supply shortages from China

The world is now paying a price for this dependence on China. Since the COVID-19 outbreak in early 2020 there has been volatility in the supply of products ranging from cars and Apple phones to food ingredients and hand sanitiser packaging.

More worryingly, availability of popular over-the-counter painkiller paracetamol was restricted due to Chinese factory closures. This is part of a bigger picture that shows Australia now importing over 90% of medicines and New Zealand importing close to NZ$1.59 billion in pharmaceutical products in 2019. Overall, both countries are extremely vulnerable to major supply chain disruptions of medical products.

For all these reasons, a cooperative trans-Tasman manufacturing strategy should be on the table right now and in any future bilateral trade policy conversations.

The big red shed: New Zealand’s Warehouse chain sources 60% of its products from China.
http://www.shutterstock.com

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Opportunities for Australia and NZ

Rather than each country focusing on product specialisation or setting industrial priorities in isolation, the two economies need to discuss how best to pool resources, add value and enhance the competitive advantage of strategic industries in the region as a whole.

Currently, trans-Tasman trade primarily involves natural resources and foodstuffs flowing from New Zealand to Australia, with motor vehicles, machinery and mechanical equipment flowing the other way. Manufacturing is skewed towards Australia, but closer regional integration would mean increased flows of capital, components and finished products between the countries. We have seen this already in the primary and service sectors but not much in the manufacturing sector, especially from New Zealand to Australia.

Medical technologies and telecommunications equipment manufacturing (both critical during the pandemic) stand out as potential new areas of economic integration. In that sense, it was heartening to see major medical tech companies such as Res-Med Australia and Fisher & Paykel Healthcare in New Zealand rapidly scale up their production capacities to build respiratory devices, ventilators, and other personal protective equipment products.

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These brands enjoy a global technology edge, smart niche positioning and reputations for innovation. We need more of these inside a trans-Tasman trade and manufacturing bubble.

China still vital but balance is crucial

Key to successful regional integration will be the pooling of research and development (R&D) resources, mutual direct investment, subsidising R&D and manufacturing in emerging markets with profits from another (such as China), and value-adding specialisation in the supply chain. For example, Tait Communication in New Zealand recently invested in a new facility based in one of Australia’s largest science, technology and research centres.

Together, we can make a bigger pie.

None of this means cutting ties with China, which will remain the main importer of primary produce and food products from Australasia for the foreseeable future. And Chinese exports will still be vital. Fisher & Paykel Healthcare sells its products in about 120 countries, for example, but some of its key raw materials suppliers are Chinese.

Getting this dynamic balancing right will be key to Australia and New Zealand prospering in the inevitably uncertain – even divided – post-pandemic global business environment. And you never know, maybe one day we’ll see a “made in Australia and New Zealand” label in the aisles of The Warehouse and Bunnings.

Hongzhi Gao, Associate professor, Te Herenga Waka — Victoria University of Wellington and Monica Ren, Lecturer/ Assistant Professor, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why a trans-Tasman travel bubble makes a lot of sense for Australia and New Zealand

BIANCA DE MARCHI/AAP

Freya Higgins-Desbiolles, University of South Australia and James Higham, University of Otago

We are hearing increasing talk about a trans-Tasman “travel bubble”, which could see Australia and New Zealand open their borders to each other.

New Zealand Prime Minister Jacinda Ardern was a special guest at Australia’s national cabinet meeting on Tuesday, which discussed the possibility of setting up a travel safe zone.

Both Ardern and Australia’s Prime Minister Scott Morrison have cautioned a travel bubble will not happen immediately. After the meeting, Morrison said a safe zone is “still some time away”. But he also stressed, “it is important to flag it, because it is part of the road back”.

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What would a travel bubble mean in practice for Australia and New Zealand?

As tourism researchers in both countries, we see a travel bubble as a great opportunity to kick-start the post-COVID economic recovery, while also focusing on more sustainable tourism.

Why the trans-Tasman bubble makes sense

A travel bubble would see quarantine-free travel allowed between Australia and New Zealand.

The two neighbours have a unique opportunity to do this. Not only are they geographically isolated, both have so far had success containing – perhaps even eliminating – COVID-19 cases within their borders.

It is not yet known when international flows of tourists will be possible again. But it is understood that global tourism as we once knew it will not be possible until a COVID-19 vaccine is widely available.

Historically, limited travel circuits have been associated with former and current Communist states. Nevertheless, for Australia and New Zealand in 2020, the idea of a travel safe zone makes a lot of sense.

In 2018, New Zealand was Australia’s second largest inbound market for visitor arrivals and fourth largest market for visitor nights and total visitor spend. Australia is New Zealand’s largest visitor market, generating 1.5 million visitors a year as of 2017.

Australians make up more than half of international arrivals to New Zealand each year.
Lukas Coch/AAP

The beauty of our shared travel markets is our visitors are generally repeat visitors who head to diverse regions. Because more than 70% of Australians book self-drive holidays, for example, their spending spreads more widely than some other visitors.

Australians seek skiing and adventure in Queenstown, wine in the Martinborough or Waiheke Island regions. They also support Australian sports teams competing in Auckland, Wellington and Dunedin. In reverse, lots of Kiwis head to the Gold Coast but also visit the Hunter Valley for wine or Melbourne, Sydney or Brisbane for sports events.

Starting to rebuild these markets while the rest of the world remains in lockdown would represent a huge boost to both economies.

What is needed to make a bubble work?

After the national cabinet meeting, Ardern stressed “there is still a lot of work to be done” before the travel safe zone idea can progress.

The key to a successful trans-Tasman travel arrangement will be sound planning and implementation.

Rigorous public health measures to facilitate safe travel will be essential, including being prepared for all travel to be halted again if the situation changes.

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Broad stakeholder involvement and coordination will be necessary, including between tourism commissions, airlines and airports, industry associations and a range of government agencies, to ensure any reopening is managed well.

Local councils and businesses must also be involved to ensure that the tourism restart is planned, coordinated and controlled.

A chance for greener travel

A trans-Tasman travel bubble could also lead to a change in both countries’ tourism strategies.

Like other countries, Australia and New Zealand have historically prioritised international tourists, particularly “high value travellers”, who spend more and stay longer.

A COVID-era focus on domestic and trans-Tasman travel will likely result in lower yield but could also lead to a more sustainable tourism future. Trans-Tasman travel is the least carbon emitting of our international markets, because it does not rely on long-haul flights.

A focus on domestic and trans-Tasman travel also provides a chance to create a greener tourism industry.
Lukas Coch/ AAP

Trans-Tasman visitors also tend to have a lower carbon footprint at their destinations. In 2018, more than half of all Australian visitors to New Zealand (57%) were repeat visitors. Repeat visitors tend to spend more of their time at regional destinations, and less time incurring the carbon costs of transporting themselves around the country.

New Zealand has already begun to rethink its tourism economy to establish greater sustainability. A trans-Tasman bubble presents an opportunity to foster tourism with a lighter footprint.

Could the bubble be expanded?

There is a call for an extension of this travel bubble to the Pacific neighbourhood, where there are also low infection numbers.

Such a move would not only provide economic support to the Pacific community, it would also represent another step in the long process of restoring normality in different regions of the world.

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Ardern has kept the door open on this aspect, but noted “at the moment, we are focused on Australia”. She has also cautioned about not introducing COVID-19 to parts of the Pacific untouched by coronavirus.

Even if it remains just Australia and New Zealand, any travel bubble will obviously elevate the risk of COVID-19 reinfection. So, public health priorities must trump the desire to kick-start economies, to make sure we don’t squander our success against coronavirus so far.

But if the governments and tourism industries can find the right balance between public health and economic needs, then Australia and New Zealand stand to benefit from a head start on the long road to economic recovery.

Freya Higgins-Desbiolles, Senior Lecturer in Tourism Management, University of South Australia and James Higham, Professor of Tourism, University of Otago

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Video: Bursting Bubble