COVID-era policies cost young people $116b

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This opinion article was originally published by the Australian Financial Review on 18 Jun 2023.

Our policymakers have yet to apologise for or even recognise the scale of the damage that government Covid-era policies have delivered, particularly to young Australians.  

Attempts to memory-hole the entire Covid period, or claim that “we couldn’t have known” or “we did the best that we could at the time”, merely provide weak cover for the egregious failure of our elected leaders during this time. 

They absolutely could have known better in March 2020, and because they instead gave in to political temptations and fear, the lives of our young people – and indeed all our lives – will be worse.

Young people’s interests were conspicuously downplayed during Covid era, with the best that policymakers offered being wound-staunchers like increased funding to mental health services.  

In the Centre for Independent Studies paper Covid’s Cohort of Losers: The intergenerational burden of the government’s coronavirus response, I estimate the cost of Australia’s Covid policy choices specifically to our country’s youth.

Drawing from my 2022 cost-benefit analysis of Australia’s Covid lockdowns, I tally the consequences of ignoring the interests of young people during the Covid era, in terms of the price they will pay for our policy mistakes.

Using a currency that aims to capture human thriving, I estimate that Covid-era policies will end up costing our youth at least 116 times the value of any benefits that those policies could have produced for them.

This is not a joke.  In fact, it is likely an under-estimate, as my analysis of Covid policy costs is calculated conservatively.  

These costs include short-term damage to the thriving of our young people inflicted by lockdowns, long-term damage to other areas of their lives due to the crowd-out of future government expenditure by increased debt repayment, as well as costs such as reductions in schooling quality that they will carry for decades. 

All these impacts were employed allegedly to fight — through largely ineffective measures — a novel coronavirus that would not rank on anyone’s list as a serious health threat to youth.

Every possible solution to a problem has immediate and downstream effects.  The job that Australians trust to their democratically elected policymakers is to try to select the “right” policy responses to problems, meaning those that maximise net benefits to Australia, in a timely yet considered way.

In many cases, policy selection involves judgments and margin calls far outside the expertise of policymakers or bureaucrats, leading to a role for independent advice about the likely costs and benefits of different policy options to different groups and from different perspectives.  

An enacted policy can then be evaluated by estimating its costs and benefits in domains that matter – sometimes dollars, but preferably in currencies that reflect human welfare, happiness, longevity, and thriving. 

As a rough rule of thumb, a policy estimated to have delivered more welfare to Australia than the country would have had in the absence of the policy can be said to have ‘worked’.  

This process sounds easier than it is, but it is the ideal to which politicians and bureaucrats should aspire, as custodians of Australia’s welfare.  

Not even attempting to weigh the costs and benefits of the policies that the machinery of state is directed to enact implies an absence of transparency and accountability by our leaders. Corruption and the abuse of power begin where public accountability of our leadership ends.

The Covid era was remarkable, among other things, for the complete absence of the process described above.

Allegedly anti-Covid policies were enacted in a climate of fear and on the basis of exceptionally blindered advice – nearly exclusively from health bureaucrats and advisors who were transfixed by the spectre of Covid, and in their apoplexy saw fit to ignore decades of public health wisdom – that delivered catastrophic damage to multiple dimensions of Australia’s health, wealth, and happiness, both in the short run and in the long run.

And while we still await a serious government-sponsored evaluation of Australia’s Covid-era policies, research being penned weekly by independent analysts around the world shows that Covid-era policies delivered negligible benefits even in the domain of Covid-related suffering and death, and at an eye-watering price.

We have witnessed, in the Covid era, the greatest peacetime failure of Australian policy-making.

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Author

  • Prof Gigi Foster

    Gigi Foster (Professor, UNSW School of Economics; BA Ethics, Politics and Economics, PhD Economics) works in diverse fields including education, social influence, time use, lab experiments, behavioural economics, and Australian policy. Named 2019 Young Economist of the Year by the Economic Society of Australia, she publishes in both specialised and cross-disciplinary outlets, and her innovative teaching was awarded a 2017 Australian Awards for University Teaching (AAUT) Citation for Outstanding Contributions to Student Learning. She has filled numerous roles of service to the profession and engages heavily on economic matters with the Australian community, as one of Australia’s leading economics communicators, in the media and at live events. She is co-author of The Great Covid Panic (Brownstone Institute 2021, with Paul Frijters and Michael Baker) and Do Lockdowns and Border Closures Serve the “Greater Good”? (Connor Court 2022, with Sanjeev Sabhlok).

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