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Chief economist update: Victoria's Cinderella moment

Victoria was primed and pumped for the second stage of looser coronavirus restrictions after the clock strikes midnight on June 22.

From 12:01 am, 50 people (increased from 20) would be allowed inside cafes, restaurants, cinemas, theatres, auditoriums, stadiums, libraries, among others. So much so, that some gyms (those who offered 24/7 services) have hung welcome banners to its first fitness patrons. Before that, a number of restaurants have posted signs that they'll reopen on June 22.

...and we, Victorians, could have our favoured tipple without ordering meals at any pub.

Instead, it turned into a reversed Cinderella story.

From midnight Sunday, planned easing of restrictions for restaurants and pubs, and limits on household and public gathering were suspended (some even tightened) until midnight on July 12.

The Andrews government was forced into this after 19 new cases were reported on the eve of the planned re-opening. The 19 new infections followed reported infections of 25, 13, 18 and 21 over the past four days.

For sure and for certain, the Victorian government - and other Australian state governments; and other world governments - have the welfare of their respective economies and constituents in mind.

Much more than central banks trying to strike a balance between unemployment and inflation - the coronavirus presents policymakers a chicken and egg dilemma.

Health before wealth or vice-versa.

Wealth before health. This is underscored by Australian Industry Group's (AiG) chief executive Innes Wilcox statement that: "It is crucial that nationally our economy is able to open as far as possible to drive business and consumer confidence ... We can't afford to again shut down an already deeply struggling national economy because of localised COVID-19 outbreaks."

Health before wealth. Australian Medical Association (AMA) president Tony Bartone warned that:"Any continued uptick from here and the risk of a second wave is absolutely a live possibility. The virus is still prevalent in the community, it still wants to spread. It needs to be treated with absolute respect."

"Whether it's restriction fatigue, whether it's something else but clearly people have started to disregard those messages and we're seeing the results in the number of case reports."

Both have valid points. And so has other states - particularly, Western Australia and South Australia - to keep their borders closed despite the Federal governments coaxing.

The coronavirus doesn't and won't respect state borders. There might not be any reported virus infections in the Australian Capital Territory (ACT), the Northern Territory (NT), South Australia (SA) and Queensland (QLD) over the past 24 hours, but the one reported case in Western Australia (WA), five cases in New South Wales (NSW) and more specifically, the 19 in Victoria (VIC) could easily multiply if allowed to cross borders.

One state giving all it's got to control the virus (health before wealth), while its neighbouring state relaxes restrictions in the interest of business interests (wealth before health), provides a toxic recipe of fresh infections for both states.

We have a saying in my vernacular, which roughly translates to "those who run in haste will have spikes buried deeper in their feet".

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