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How Morrison can emerge a winner from virus crisis

Scott Morrison’s Government can follow in famous Liberal footsteps by turning adversity into opportunity.

Mar 02, 2020, updated Mar 02, 2020
Prime Minister Scott Morrison, pictured with John Howard after his 2019 election win. (Photo: AAP Image/Mick Tsikas)

Prime Minister Scott Morrison, pictured with John Howard after his 2019 election win. (Photo: AAP Image/Mick Tsikas)

It’s not the greatest of compliments, but John Howard liked to repeat it with good humour. “Laurie Oakes once said I’d made every mistake in politics but I’d only ever made them once,” Howard would say, adding his recognisable jerky laugh.

It’s true and this adds to the story of what was a decade of political success as the Liberal Party’s second-most-successful politician and second-longest-serving prime minister.

After Scott Morrison’s self-proclaimed “miracle” win last May, many commentators said the Pentecostal prime minister from the Sutherland Shire was the new John Howard. It’s a premature assessment based mainly on one break of winning against the odds.

With this in mind and dusting himself off after a shocking summer, Morrison is regrouping. He’s dropped some of the affectations – the Sharks and other trucker caps have gone, as has other casual garb. Now it’s suits and the appearance of a leader in charge with no detail too small to escape prime ministerial focus.

The Prime Minister is even treating Canberra with a fresh reverence. We haven’t heard the dismissive phrase “the Canberra bubble” for weeks.

Morrison’s pivot is turning on the government response to a black swan event – the novel coronavirus that’s emerged out of central China and is threatening the physical and financial health of the world.

For Australia, this virus presents a health challenge and an economic one.

As far as managing the health policy responses, Morrison and his senior ministers are providing what has been so far some world-leading decision-making that’s cautious and considered and deserves to be followed by other national governments.

The spread of the virus is going to get worse before health authorities bring it under control and find a vaccine while the broader economic fallout will be just as hard to control. Both these strands have prompted panicked responses, as we saw in suburban supermarkets over the weekend as the word pandemic became code for buying canned goods.

Morrison and Treasurer Josh Frydenberg have junked the surplus and now have two economic imperatives – keeping the Budget close enough to “balance” they can avoid the deficit word, and hoping the economy does not contract for two successive quarters (the March and June ones are on red alert).

This Wednesday, the December quarter accounts will be printed by the Bureau of Statistics and everyone thinks they will show continued weakness that’s been evident since the middle of last year.

The market consensus is that the figure will be 0.4 per cent growth for the quarter, indicating a softness not apparent in the rest of 2019 – and that weakening is before the full impact of the summer fires and the arrival of the coronavirus.

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The weekend factory production figures out of China – the worst on record reflecting an industrial sector that has just stopped as workers have been locked in their homes and forbidden from travelling – raise the chances of Australia falling into recession, breaking the country’s world-beating 18-year run of recession-free good fortune.

The Morrison Government’s policy and political challenges rolling out of the coronavirus crisis extend beyond dealing with the immediate threats of managing the Budget numbers for May and getting through the next two economic growth outcomes.

They have to manage the hit on sectors of the economy, particularly higher education and tourism and supply chain hits to some manufacturing and primary production industries.

Morrison is aware of this as he indicated at the end of the last parliamentary sitting week, pointing to measured and scalable stimulus. These targeted measures will be smaller than the response to the 2008 financial crisis – the tens, perhaps hundreds of millions, not billions – but there will be flexibility to scale things up quickly if needed.

What has been an almost-religious adherence to the surplus has been replaced by a much more open-minded approach to spending.

A major event in Melbourne Tuesday morning will look at the immediate and medium-term challenges and opportunities from the coronavirus crisis.

Australian Industry Super chief economist Stephen Anthony will lead a panel addressing the Australia China Business Council and his message is the Morrison Government should take advantage of current circumstances.

Anthony has some blunt advice: “The old adage is, don’t waste a crisis! Convene an economic summit in Canberra, inviting­ anyone who embraces reform­. Define the key reform priorities, firming up energy, improving infrastructure and tax reform, and get it started.”

Anthony reckons this would benefit the country and give the national government a sense of purpose that’s been lacking.

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