Early in the onset of the health and economic crisis that has created the evolving post-COVID-19 world, Scott Morrison listened to some advice from a close political confidante.
“Resilience is going to be the key to everything,” Morrison was told by the informal adviser, who asked not to be identified but who is a Coalition strategist with decades of experience and history.
“You’ll need resilience in how policies are developed and the plans will need to be aimed at providing resilience for the health system and the economy.”
Resilience is about to be stress-tested as never before. The Federal Government has unleashed a once-in-history $130 billion, six-month, all-guns-blazing economic plan that mixes a safety net with a kind of temporary state takeover.
You haven’t seen anything like this before because there’s never been anything like this before. It’s way beyond the kind of new deal government spending seen during the Great Depression, out-stretches the creation of post-war manufacturing after the 1945 armistice and it makes the response to the 2008/09 financial crisis look like change from the back of the national couch.
The Government has taken its time because it wanted to test – in theoretical and practical ways to the extent possible – the models deployed in other Western democracies in the last four weeks. Some will decry that hesitation, others will cheer the caution. History will be the judge.
They think they’ve hit the spot. As Treasurer Josh Frydenberg says, the package – representing an eye-watering 13 per cent of national income for the coming six months – is broader than the much-touted New Zealand scheme and more generous than the plan rolled out by Britain’s Boris Johnson.
There was no doubt Morrison and his Government understood the grave threat facing Australia and the world.
“Our goal is to protect the lives and livelihoods of Australians, to protect and preserve the very economy that we will depend on so significantly in the months ahead, and on the other side as well, for the generations that will follow us out of this,” the Prime Minister said.
“Many countries, in the months ahead and perhaps beyond that, may well see their economies collapse. Some may see them hollow out. In the very worst of circumstances, we could see countries themselves fall into chaos.
“This will not be Australia.”
The Government’s plan is very broad – covering full-time, part-time, casuals, the self-employed and those in the not-for-profit sector and operating until the end of August (dated from March 1). The payments are aimed at giving people a living wage – well above the “non-living” Newstart payment now rebadged as a Jobseeker Allowance – with many getting 70 per cent of the median wage and those in hospitality and retail having access to 100 per cent of the median wage for their industries.
Government insiders say any doubts ministers had about opening the fiscal sluice gates to full tilt were dispelled when the round-the-block queues at Centrelink emerged just hours after the Commonwealth and the states started shutting down businesses a week ago.
These horror images were made worse by the systems collapse in Services Australia. This snafu played an unwitting role in hyper-charging how the Government eventually reacted.
Now everyone has to make the best of what’s been done so far, use the days before the necessary legislation is put before a minimalist parliament to find gaps and fix them, and hope these measures will be enough to preserve enough of the physical economy into at least the third quarter of 2020.
For now, political ideology has been binned, old accepted wisdom is useless, big government has come roaring back to a scale unimaginable in any of our lifetimes and the future is indeed a completely new world.
We will come out on the other side but when and in what shape are probably beyond our imaginations for now. Much will return to something resembling normal eventually but a lot is going to be reinvented along the way.
Many thought Morrison and Frydenberg didn’t have it in them. One thing we do know is that they have and it appears we can all be grateful for that.Jump to next article