It’s a measure of how rapidly we’ve descended into crisis that 11 days ago a stimulus package worth nearly $18 billion seemed like a good first step in supporting a virus-ridden economy, but yesterday’s announced $66 billion package looks inadequate.
The government did its best to hype the size of its second package, throwing in the Reserve Bank’s liquidity and credit funding measures as well as the first package to claim it was handing out $190 billion. Some press gallery journalists dutifully bought it. But the great bulk of it is additional loans or investment funds being made available for business if they can use it. Only about $60 billion is actual cash going to businesses or households, and much of that won’t reach businesses for at least four weeks.
And by last night, the package was being forgotten as the states and the federal government split over school closures, sundering the “national cabinet” model that has so far been an effective innovation by Scott Morrison (and, no, it doesn’t need Anthony Albanese on it, but that’s an argument for another day).
Morrison has been taking a graduated approach to dealing with the crisis, escalating both the health and economic responses as circumstances have worsened. All along, he’s been under pressure to dump that and embrace full-scale measures.
Public health experts and academics — who have the luxury of not having to ever be elected, and who don’t need to care about the consequences of a prolonged economic crisis — have been demanding Italy-style quarantining from the get-go. The pressure to shut schools from media commentators and worried parents has been enormous.
Morrison, acting on the basis that the benefits of schools staying open outweighed the costs, resisted those pressures both publicly and through the national cabinet. But yesterday the pressure became too much. Victorian Premier Daniel Andrews, backed by NSW Premier Gladys Berejiklian, basically pre-empted the national cabinet process and said Victorian schools would be shuttered from Tuesday. The ACT is following suit. Gladys Berejiklian this morning announced a weird kind of compromise in which school would be open but parents advised to keep their kids at home.
There are also claims Morrison resisted a push from NSW and Victoria for a shutdown of all non-essential businesses.
This is the problem of a federal system in the time of crisis. There are just 25 million Australians but, ludicrously, we have three tiers of governments funding and providing a jumble of different services, often simultaneously.
That produced last night’s ridiculous scenes in which Scott Morrison held a foul-tempered late-night media conference declaring that schools would be open while states and territories were announcing that no, they would not be. Even journalists paid to report on proceedings didn’t have a clue whether schools would be open, let alone parents.
The same graduated approach has informed the economic response. But that, too, is under pressure.
Business groups welcomed the package yesterday but said more was likely to be needed, and the money would be too slow to reach employers. By late yesterday, there were reports that a third package was already in development.
The government is resistant to the wage subsidies being implemented in Europe, but that will be the only way to keep people in some form of employment as thousands of companies (small, medium and large) hit the wall in coming weeks. Cheap unsecured loans are fine, but when no one knows how long the crisis will last, taking on more debt is a big ask.
There’s good reason for the government to try to play this by ear, to scale up its response as the situation worsens and more information becomes available. Ostensibly it’s the lower-risk, fewer-regrets approach. But it comes with the possibility that, in striving to strike a balance between competing priorities — health and the economy — we end up with the worst of outcomes for both.
Yesterday didn’t help. What was supposed to be a big splash of government assistance got lost in the battle over school closures. It was the last thing Morrison — and the rest of us — needed.
This is an extraordinarily challenging time to be in government, anywhere and at any level, with policy responses required that are even more complex than during the financial crisis. There is plenty of criticism of Morrison, but it’s not been his overall strategy that’s necessarily the problem — it’s that it’s been overwhelmed by the speed and size of this catastrophe.
Actually, it is mostly his fault. He failed to take this matter seriously 3-4 weeks ago, & was then extremely slow to take appropriate action when it was demanded. He has also been putting out ridiculously mixed messages over the last 2 weeks (shake hands/don’t shake hands; I’m off to the footy/I’m not going to the footy anymore). Had sufficient measures been taken back at the start of March (temperature sensors at airports & other areas with large numbers of people coming & going; extensive testing of all medium to high risk individuals; giving income assistance to anyone who genuinely believed they had the virus; restricting group gatherings to 100/500) then this would have been already nipped in the bud. Sadly, Moronscum was more interested in protecting the economy than in protecting people’s health.
Kismet Hardy.
Schemo has shown an innate aversion to govern for the majority (preferring to duck hard decisions that would put his donor base off-side) – here come his chooks to roost.
He’s “listening to the medical advice” – that he likes the sound of, that backs up his preferred course – that he’ll blame when it all goes pear-shaped.
This is a government of a party quite happy to give away $tax to their donor mates (obsessed with profits, share-holder dividends and, thus, self-remuneration and donations to their sponsored government) : but ideologically allergic to giving a helping hand to the “quiet Australian” lower classes, when that help would give that class the liquidity to go out and spend – when LNP business mates would pocket such funds in these hard times, when no one is buying, because the great unwashed masses don’t have the liquidity for discretionary spending.
In a crisis like this, with thousands of lives at stake, any politician who makes decisions based, even in part, on a desire to be re-elected, is a disgrace, and does not deserve to be re-elected. Just do what is necessary to save the most lives!
Was it Keating who said look after the policies and the politics will look after itself?
Morrison has shown extremely bad judgment in not acting as quickly and decisively as was obviously warranted by the coronavirus pandemic. He has lacke leadership qualities and is preparing to blame anyone, including the public, for his bad judgment. You show just as bad judgment by attempting to excuse him, Bernard.
I generally agree with you, Bernard, but not on this one. Loans, even zero interest loans, are next to useless for a business with no sales. You make the point that taking on more debt in the current environment is a big ask. European style wage subsidies are what we need.