That's a wrap

Coming to the end of the second year of pandemic-affected markets and working practices, it feels appropriate to reflect on the journey and speculate on what the future holds. We may not even be particularly close to the final end of the pandemic but those of us lucky enough to live in the developed world can at least hope for a less mitigated existence in 2022. We do not yet know how different this will be from the pre-pandemic world.

Laurence Davison Head of Content KANGANEWS

The second half of 2021 was a sobering experience for Australia and New Zealand. Having successfully eliminated COVID-19 through the use of extensive lockdowns and closed borders, both countries were getting used to the idea of a gilded-cage existence while the rest of the world continued to battle the virus.

Of course, thanks to an inadequate quarantine system and a sluggish vaccination rollout, the virus returned with a vengeance. By the end of the year, Auckland is just starting to emerge from a protracted lockdown, Melbourne is the world’s most locked-down city and any hopes of a COVID-19-free Australasia faded six months ago.

It is also worth highlighting the fact rarely acknowledged by those who choose to protest public health measures: that however painful lockdowns have been, Australia and New Zealand have both achieved stellar results in the key outcome of preventing their people dying of COVID-19.

The pandemic has killed nearly 2,500 people per million of the population in the US, more than 2,100 per million in the UK and nearly 1,500 per million in anti-lockdown favourite, Sweden. The equivalent figures in Australia and New Zealand are 80 and nine. Clearly, the strategy of fighting hard against virus spread until better response measures – chiefly vaccines – became available has worked. Most importantly, thousands of Australians and New Zealanders are alive today as a result.

On the other hand, the resurgence of the pandemic in the second half of 2021 was also a uniquely sobering experience for Australia and New Zealand. Experiencing our worst outcomes just as the rest of the developed world was starting to return to something like normal life – however premature that turned out to be – was a chastening and embarrassing experience for countries that might have thought they had outperformed.

“The sight of Americans, albeit of the more unhinged variety, protesting for ‘Australian freedom’ was laughable. But the underlying truth is that most Australians and New Zealanders spent a large chunk of 2021 under lockdown conditions that were no longer deemed necessary elsewhere.”

The sight of Americans, albeit of the more unhinged variety, protesting for ‘Australian freedom’ was laughable. But the underlying truth is that most Australians and New Zealanders spent a large chunk of 2021 under lockdown conditions that were no longer deemed necessary elsewhere. Again, I will never understand why these self-same American protestors do not think more about why they are so willing to accept the death of more than a thousand of their compatriots every single day. But here we are.

The primary reason why Australasia still needed to lock down in 2021, of course, was vaccination rollout. While every adult American who wanted to get vaccinated – a number most of us find bafflingly small, of course – could have done so by mid-year, Australia and New Zealand did not overcome supply shortages until several months later. Quarantine failure and vaccine shortages made it clear our policy approach was not infallible.


Closer to home, conversations with capital market participants in the later months of 2021 took on a fairly predictable tone that reminds me of the old adage about war: ‘Months of boredom punctuated by moments of extreme terror’.

The fear of COVID-19’s apparently uncheckable spread in Sydney in July and August – replicated to some extent more recently by the lurch into near despair caused by the emergence of the omicron variant – has largely been replaced by a sort of all-pervasive ennui among most people in the market.

Market participants have, for the most part, been working harder than ever. In many ways, 2020-21 has been a tremendously successful period for the local debt market. It came through the turmoil of the pandemic’s emergence, survived the zeroing out of global rates and vast QE as well as massive supply changes, and has delivered record issuance and rapid evolution in sectors as diverse as sustainable debt and securitisation.

The mood has been far from celebratory, however. I cannot help but feel ongoing home-working is a key part of the reason why. Simply, we have not been able to be together to support each other through the epic workload or celebrate its outcomes. One day looks very much like the next in the sort of environment we dealt with in 2021, and when a project gets completed we simply move on to the next one almost without remark.

The good news is that face-to-face contact is gradually returning. In the same early December week, a  colleague of mine attended an in-person conference in Sydney and I had a phone conversation with a banker who mentioned celebrating a KangaNews Awards win with a client over dinner the night before. Hopefully such developments stop being worthy of remark within a few months.

But the path from here is not going to be a straight line. For one thing, the pandemic is far from over. We are still learning about omicron, and while the early signs are that its emergence may not be catastrophic it is still entirely plausible that it – or a subsequent variant – could set progress back substantially. We will not slow the emergence of variants until we overcome shocking global vaccine inequality.

There is also the issue of critical mass in in-person settings. While many market participants are desperate to get back to face-to-face working, plenty of others are quite happy in their home offices. Perhaps the most common view is not a strong preference for home or office working but an overwhelming desire not to have to commute for hours every day – which of course works against a return to the office. It would be nice to think everyone could have their way and the world will be a better place for it. Yes, there will be fewer people in the city – but realistically the ones who don’t want to be there probably weren’t patronising bars and restaurants anyway. Those of us who do want to be there will be able to do so with the benefit of less congestion. Meanwhile, the home-workers can do so freely after pandemic-imposed conditions demonstrated that it is perfectly possible to be productive even when not physically present.

It is not as simple as this, of course. From the perspective of the KangaNews business, for instance, we will be watching closely to see how the industry conference sector evolves. If 50 per cent of people are working remotely on any given day we choose to host a conference, the value of an in-person event is clearly going to be mitigated. On the other hand, we would like to think that in a more disparately located industry the value of occasional events that bring everyone together in person will actually increase.

It might not be so easy for businesses that rely on old norms. Even people who don’t want to be in the office buy coffees from the café next door – more of them, perhaps – and if city footfall drops by even a marginal amount some of these businesses will struggle. Even if we all work from home one day a week, it means 20 per cent fewer people in the city every day.

“The office environment needs to be sufficiently valued to make it ‘worth’ the commute. How businesses achieve this across large teams with diverse preferences is likely to be the management challenge of the next decade. The success of the response is likely to become a competitive differentiator.”


Throughout the pandemic, I have kept returning to the phrase ‘human nature is a powerful mean-reversion force’. I still think it is valid, even as the experience has dragged on toward the two-year mark. Most of us are sociable creatures and crave personal contact and – while it might take months or years to normalise – I suspect we will gradually drift back to common spaces.

There are also down sides to home working that will become more apparent as it stops being something everyone is doing. We all hate the concept of presenteeism, but equally we all value the colleague who is available to help out: sharing knowledge, picking up an ad-hoc task, doing a bit more to get a job done. This is not impossible in a  remote setting, but we are inevitably going to be more inclined to ask the person sitting next to us to help out than someone on the other end of a VC.

This is going to be a challenge for the introverts. People are not – or certainly should not – be overlooked just because they are quiet. But will they be more so if they are physically absent? How will we maintain and build equity and team culture if people’s working experiences are so different? One of the most interesting aspects of a recent panel session I moderated – via VC – on the future of work was the idea that businesses will need to work harder than ever to foster a culture people want to be a part of, including with their physical presence. In effect, the office environment needs to be sufficiently valued to make it ‘worth’ the commute.

How businesses achieve this in the context of large teams with diverse individual preferences is likely to be the management challenge of the next decade. The success of the response could become a competitive differentiator.