(Image: Tom Red/Private Media)

“Climate change will ultimately be solved by ‘can do’ capitalism; not ‘don’t do’ governments seeking to control people’s lives and tell them what to do, with interventionist regulation and taxes that just force up your cost of living and force businesses to close,” Scott Morrison announced Wednesday.

“‘Can do capitalism’, not ‘don’t do governments’. I think that’s a good motto for us to follow not just in this area, but right across the spectrum of economic policy in this country.”

The media’s coverage of Scott Morrison’s statement yesterday was either straight stenography from the Rob Harrises of the Press Gallery, or analysis about what a canny wedge it was against Labor for the coming election campaign — or more correctly, the campaign that’s already here.

As is the case with much of what Morrison says, his attempt to frame his government is a lie. In fact the whole purported dichotomy between capitalism and government has vanished in Australia in public policy. The Morrison government runs a crony capitalist agenda in which favoured industries that contribute generously to the Coalition’s coffers receive special treatment.

And the lie starts at the very fundamentals of the economy: rather than “don’t do governments”, Morrison is running a government that is over 27% of Australian GDP this year. The idea that last year’s 32% of GDP was a kind of one-off is nonsense: the government will form over 26% of GDP for the next few years — above the level at the highest point of the Rudd government’s GFC stimulus.

Morrison is also taxing Australians at levels well above those of the Rudd government, which struggled through the GFC with tax receipts at 20%; this year tax receipts will be severely affected by lockdowns, but next year the budget forecasts tax at 21.6% of GDP, headed for nearly 22% the following year — a level above any year of Labor.

Morrison might talk about “don’t do government” but his government is doing more in fiscal terms than any since World War II, and punishing us with significantly higher taxes than Labor.

Much of that big spending is directed toward the government’s efforts to get reelected via shameless pork barrelling — there’s no talk of “don’t do governments” by National Party rorters like Bridget McKenzie or Liberal Party rorters like Alan Tudge.

But much of that big spending is devoted to looking after the Morrison government’s mates — bearing in mind “we look after our mates” is the foundational belief of Morrison’s Prime Ministership. Morrison is spending tens of billions on subsidies for coal exporters via the Australian Rail Track Corporation. Hundreds of millions are being funnelled into discredited carbon capture and storage projects to be run by Coalition donors like Santos, Woodside and Chevron, who will also be able to access funding from the government’s “Emissions Reduction Fund”. It is subsidising gas pipelines and gas development. It is actively pushing for a “CoalKeeper” tax to be added to electricity bills — possibly increasing them by more than $400 a year — to keep coal-fired power stations operating.

Indeed, moments before he spruiked the alleged contrast between capitalism and government, Morrison announced another $500 million increase in investment funding for carbon capture and storage (risibly portrayed by the media as a $1 billion fund to leverage $126 billion in low emissions technology).

Morrison is trying to reset the political debate in terms he thinks are favourable to the Coalition: capitalism versus government, freedom versus regulation, right versus left. What the media entirely ignores is that Morrison operates outside any such framework. His method of governing is, in his own words, “transactional”.

For Morrison, government and markets are joined at the hip — his role is to use the resources of government in exchange for financial contributions for beneficiaries and support to stay in power. It is a union of capitalism and government — otherwise known as crony capitalism.

In the end, it debilitates both — businesses direct their intellectual capital and innovation toward finding new ways to extract funding and regulatory favours from governments; governments become corrupted and rudderless. And that’s Morrison’s Australia.