The world has changed dramatically, if not overnight, then in the space of a month, and our governments appear to lack the institutional capacity to operate in that new world.
It’s hard to avoid that conclusion given the inability of Centrelink to cope with a predictable surge in joblessness and the astonishing failure of the MyGov website yesterday, falsely blamed on a denial of service attack by the relevant — if that’s the word — minister Stuart Robert.
The denial of service was to citizens trying to use a site that the government has tried to shunt us all onto for years in order to access basic services.
The government has known for weeks it faced a big rise in unemployment. The scale has only become clear in recent days as major sectors like hospitality have simply been shut down. But governments are supposed to engage in contingency planning, and lockdown and massive economic dislocation was always a real possibility.
You don’t design infrastructure — whether roads or welfare delivery mechanisms — for peak capacity, but when you know a peak is coming, you prepare.
Robert was boasting this morning that Services Australia had “surged capacity” into MyGov overnight, which prompts the question of why it hadn’t already been done and why Robert was left apparently convinced his site was under attack when any sensible planning would have identified a coming surge in usage.
In the days and weeks ahead, a failed website will end up being a footnote to the unfolding crisis, but it’s a telling example of how governments — not this government, the Morrison government, particularly, but all governments — have stripped themselves of the ability to serve communities, driven by the broad agenda of contestability, outsourcing, corporatisation and privatisation over the last thirty years.
Once that was limited to service delivery and infrastructure; now, increasingly, it applies even to policy advice, with major consulting firms reaping billions from taxpayers to serve up advice previously provided by public servants.
There have been undoubted benefits from that agenda, in the form of far more efficient service and infrastructure provision, an end to union featherbedding, revenue from asset sales and restrictive work practices and lower taxes.
But like much of the agenda of neoliberalism, its negatives have kept growing as the benefits have receded in the economic rear view mirror. In key areas governments lack any sort of institutional capacity to deliver what people need, or to protect them.
Indeed, welfare provision has focused in recent years not on serving or protecting Australians, but on punishing, surveiling and generally deterring them from trying to claim the benefits to which they’re entitled.
Elsewhere, the history of the NBN is of government having to rebuild its capacity to roll out telecommunications infrastructure, having flogged off the expertise it once had in the sale of Telstra.
The once taxpayer-owned Commonwealth Bank has been one of the primary perpetrators of the worst scandals of the era of banking deregulation. Corporatised government energy companies and privatised power firms alike have been ruthless in gaming the byzantine rules of the energy market to gouge customers.
It’s taken dramatic turnarounds in government policy to fix those problems in energy and financial markets since 2016.
Now that turnaround in policy has to be undertaken on an economy-wide scale. The government is going to be much of the economy for the rest of 2020 and, very possibly, for quite some time afterwards.
Forget deregulation — we’ve entered a world where there is nothing but draconian regulation, to the point of shuttering businesses and confining people to their homes. We’ve already entered a world where government loans will be propping up large slabs of the private sector.
Soon — hopefully — governments will be simply paying the wages of large portions of the population, and directing manufacturing and logistics to ensure supply chains providing crucial goods continue to operate.
The few remaining neoliberals hiding in the offices of the Financial Review and The Australian can hope that this will be a temporary aberration, but chances are a new era of big government has commenced, at least until an effective vaccine is available for coronavirus.
Except, it’s likely that henceforth there’ll be a permanently enhanced pandemic readiness system and critical infrastructure to go along with it. Governments need to expand their skillsets, because they’re going to be doing more in the future, and not just until this crisis ends.
Life was so much simpler when Scotty From Marketing and his best mate Count Orlok could nick off to Melbourne for West Australian federal MP Steve Irons’ wedding – and they could all charge us for the privilege. …. Pity they had to pay it all back.
And look what ‘lower taxes’ have bought us…..
With deficits stretching well into the future, one wonders what Scotty is going to do by way of policy development. No surplus, no Scotty.
Question is, how is the deficit going to be paid down over the coming years, or even decade? Which government is going to have the balls to tax family trusts, end franking credit payments, end negative gearing, tax superannuants’ pensions, increase the GST and whatever else can be done to find any revenue?
In addition, Scotty, Josh and Mathias have promised that the dole would revert to pre-virus levels once we have crossed the bridge back into the Promised Land. But at what level of unemployment will that decision be made? Will a LNP government announce that a 4 or 5 or 6% level of unemployment is acceptable, that people still unemployed are not there through no fault of their own, and so the dole can once again be reduced to levels the Govt has this week acknowledged was inadequate.
THE DEFICIT DOES NOT MATTER!!! A deficit is money IN the economy that has not yet been taxed back onto the Governments spreadsheet, and that is all money is. It is a spreadsheet, and money can be created at will! The USA understands this well. They have a trillion dollar Government debt, and HAVE NOT HAD A SURPLUS SINCE 1971!!! Learn Modern Monetary theory.
Finally Richard someone that understands and sees thru the bullshit of budget deficit/surplus so loved by the lying conservatives, equating a nation’s economy to a household budget fools the brainwashed or the dumb and stupid but the intelligent see right through it , its a ploy thought up by Howard and Costello to frighten the sheep, why Labor doesn`t expose it as the fake it is makes their tactics hard to fathom
Correct Richard, just wish this was more widely understood.
People will now be learning more about how MMT accurately describes how an Economy works.
Alan Kohler has recently written in his newspaper column that ‘Now is the time for MMT’.
MMT is not a Theory of economic management, it is not a ‘thing’, not an ideology. As Prof Bill Mitchell describes it, it is a ‘Lens’ to understand the economy. Understanding the economy allows Governments of left or right persuasions to know the ‘levers’ that best will impact upon solutions to the problems they are facing.
Look up ‘Billy blog’, Prof Mitchell’s website, for today’s instalment of MMT and this latest economic crisis.
Tick!!
I couldn’t agree more. The author’s descriptions of increased revenue from asset sales is laughable. MMT clearly describes how the economy operates and federal govts with a fiat currency do not need to go begging for revenue. His lists of positives outcomes from 30 years of neoliberalism quickly disappear with an MMT lens.
“There have been undoubted benefits from that agenda, in the form of far more efficient service and infrastructure provision, an end to union featherbedding, revenue from asset sales and restrictive work practices and lower taxes.”
Seriously?
What efficiency gains?
How long before the cost of renting surpassed the sale price of government properties?
How many years was it before the foregone dividends from Telstra was more than the sale price?
And Telstra is more efficient now? Really?
“Elsewhere, the history of the NBN is of government having to rebuild its capacity to roll out telecommunications infrastructure, having flogged off the expertise it once had in the sale of Telstra.”
“The once taxpayer-owned Commonwealth Bank has been one of the primary perpetrators of the worst scandals of the era of banking deregulation. Corporatised government energy companies and privatised power firms alike have been ruthless in gaming the byzantine rules of the energy market to gouge customers.”
Funny, but I swear you claimed benefits for privatisation earlier in your piece. Surely the idea of privatised or corporatised government businesses gouging customers was kinda obvious?
Consider that there is no competing power distribution network. There are a few networks that have been privatised, but they work in different regions, not in competition. And lo, half the electricity bill is in transmission costs.
Of course until the NBN was rolled out Telstra effectively had a monopoly on key infrastructure.
Wayne, I share your frustration with Bernard.
I am sure his heart is there in trying to show us how our last 30 odd years of embracing the neoliberal experiment has made us so vulnerable in dealing with the COVID- 19 crisis we now face, even if his sense of ‘balance’ appears distorted.
I empathise with the pressure, that not only he, but his fellow contributors at Crikey must be under to inform us, even if thorough research suffers in meeting deadlines.
May I suggest a relevant read I have just finished – “How Labour Built Neoliberalism – Australia’s Accord, The Labour Movement And The Neoliberal Project” by Elizabeth Humphry’s.
I leave you with a relevant quote from the great Gough on absorbing and disseminating information- ” by sitting on the fence with both ears to the ground; it was difficult to move forward or speak effectively in that posture.”
Exactly. Poor Bernard is trying a little too desperately to be ‘balanced’ (whatever that is). He has obviously not tried to ‘reach out’ to Centrelink lately, either to the call centres (on the rare occasion they answer, you get some dumbfart from Serco who has to put you on hold to someone who actually knows what they’re talking about) or to the semi-functional MyGov website.
If we quickly manufacture test kits and have global testing of the Australian population we might be able to get over this in as little as two months and in fact come out ahead if we can have test kits that test positive for all types of ‘flu.
But, yes, we need to re-think government along systems lines. Not socialism, not capitalism but a mix and where decisions are made on the basis of information, not position. We came somewhat close to it in the Menzies era.
And further to my comment above. “What about hyper-inflation you say, look at the Weimer republic… look at Zimbabwe!!! In both cases, ‘money printing’ was a RESPONSE to REAL SHORTAGES of goods, food (especially) fuel, etc. etc. due to, in Germany’s case, reparation payments after the war, leaving the country impoverished, and Zimbabwe, destroying the means of destruction by killing and driving out the white farmers and not replacing their skill and expertise adequately!
The money printing was a response to that, not the cause! Shortages cause inflation not money.
* means of ‘production’
Haha!!! Yes! Woops, sorry!