SloMo has lost control of the narrative, of policy and of the nation. Australia’s elite commentary is ripping in all directions. Some are still hopelessly biased, such as Paul Kelly:
Scott Morrison and Josh Frydenberg are determined to keep open Australia’s productive economy. Morrison criticises those calling for “lockdown” and affirms his goal is to save as many jobs as possible.
The conflict between the Morrison government and the federal Labor Party over Australia’s core strategy to fight COVID-19 has deepened with Morrison doubling down on Friday. “You can’t run a country without an economy,” was his message.
He doesn’t want a complete lockdown of the economy and doesn’t like the word lockdown. Morrison said Australia was in two fights and faced two crises — health and economic — and both were important.
You can’t negotiate with the virus. Any compromise with it only ends in pandemic, mass death and shutdown anyway. Especially so when we factor in seasonality. Depite its small population, Australia is leading southern hemisphere infections:
| Australia | 3635 |
| Brazil | 3417 |
| Malaysia | 2320 |
| Chile | 1909 |
| Thailand | 1245 |
| South Africa | 1187 |
| Indonesia | 1155 |
Some of this will be our superior testing regime. Yet the point holds. SloMo has allowed the virus to gain a broad foothold while Summer keeps it in check, only ensuring that as we remain open and Winter arrives, mass casualties will trigger total shutdown.
The smarter folks, such as Peter Hartcher, have awoken to nail what’s really going on:
The early national unity has fallen apart. The corona consensus has turned into an outbreak of argument. On three levels. The most consequential is the breakdown of broad unity that existed between the states and the federal government until just over a week ago.
…by their actions it’s plain that the premiers are frustrated with Scott Morrison past any point of patience and have started to exert their own powers. The states are now wielding sovereign controls, independently of the federal government, more decisively than at any time since the Great Depression of the 1930s, according to Anne Twomey.
…The state premier who has lodged perhaps the clearest vote of no-confidence in Canberra is, like Scott Morrison, a Liberal. So this is not about partisan politics. It’s about policy and performance.
NSW Premier Gladys Berejiklian on Thursday decided to check all overseas arrivals at Sydney international airport for fever. This practice of temperature testing has been routine in other countries. Many Australians will be surprised that their government refused to do it to filter out coronavirus cases.
…”We can’t rely on the federal government to do its job so we have to do their job for them,” says a senior NSW Liberal. “Since when did border control become a state responsibility? Since when did NSW Health officials man our borders? It’s a Border Force responsibility.”
…”The one thing the federal Libs are supposed to be good at – border control – they’ve failed,” said a fuming NSW Liberal MP. Separately, a Victorian Liberal agreed: “People have just been pouring across the border with no checks and only token screening,” he said. “Until recently they hadn’t even been given any information.”
…Patience with Morrison has worn especially thin on Spring Street as well as Macquarie Street. It was Victoria’s government that first broke ranks on school policy. Premier Daniel Andrews closed Victorian schools from Tuesday in defiance of Morrison’s position. The Prime Minister on Friday relented further on schools, saying that each state would now make its own decision. His hand had been forced by the states.
A Berejiklian ally says: “Daniel Andrews and Gladys are working hand in glove. They are trying to lead the rest of the country.” That’s despite the fact that the Andrews government is Labor. “They can see a tsunami of virus cases coming at them and they’ve set politics aside.”
The premiers worry that Morrison has put the economy above health care, moving too slowly to control the disease, allowing the virus to flourish while protracting the ultimate economic pain. Morrison hinted at this tension at his Friday press conference: “Those who often are pushing for greater restrictions, they will keep their job. I am not going to be so cavalier about it. I will make sure I fight for every job I can.”
National unity has fractured on two other levels. One is at the national political level. Until now, federal Labor has been constructive and co-operative. Its help was essential in allowing the Parliament to pass the $84 billion economic support bills in a single day this week.
But Labor leader Anthony Albanese was unimpressed with some of the Morrison government’s antics. Undertakings made and not honoured. Labor will continue to be constructive in its approach to the crisis. But the government can expect it to be much more vocal in objecting to government policy, and more insistent in proposing alternatives.
Labor, for instance, is pushing the government to do what Britain, New Zealand and a raft of other countries are doing – pay wage subsidies to employers. This is a key incentive to keep people employed. It is a very good idea that Morrison and Josh Frydenberg need to implement.
…The third level on which national unity has collapsed is on the health advice. Already under strain, expert support for the government’s policy choices all but collapsed this week. Outside the government’s own official medical committee, the weight of medical opinion is now converging on the need to move to a sweeping lockdown.
It’s been clear for weeks that Morrison’s medical advice is compromised. Ever since Brendan Murphy stood up and declared the international student intake was a “risk reward thing” it’s been clear that he is co-opted into worrying as much about jobs as he is lives. The Australian has started using it as an excuse for SloMo’s blundering.
Finally, Josh Recessionberg’s misjudgements from the outset have condemned the SloMo stimulus to futility, via Laura Tingle:
Treasurer Josh Frydenberg told his Treasury officials earlier this week that the economy needed to be put in to cryogenic suspension. He was right.
…we have to acknowledge just how dramatically the world, and the conversation, have moved on since the Federal Government released its first so-called “stimulus” package on March 12.
The government spoke then of “supporting business investment” and “providing cash flow assistance to help small and medium-sized business to stay in business and keep their employees in jobs”.
It may have been well meaning, and went a lot further than people had expected, but as the economy has been in freefall, the idea that businesses might be encouraged to go out and invest, or even that small and medium businesses would keep their doors open sounds so, well, March 12.
While the government has announced massive new spending subsequently to support the economy, it has with the other hand been taking necessary steps, driven by public health concerns, to close the economy down, with the obvious ramifications for small and medium business.
So while a big increase in social welfare was announced last weekend, it has had both a positive effect of providing support, but also negative one of making it easier for businesses to feel they can “let people go”, rather than trying to keep them on the books.
Similarly, the $715 million assistance package for the airlines — which have subsequently laid off close to 30,000 people — has been superseded.
As Virgin Australia chief executive Paul Scurrah said this week, the assistance would only be received, and only work, if the airlines continued to operate.
Hundreds of thousands of people have lost their jobs — or at least been “stood down” — in the past couple of weeks.
…we need a clear-eyed view of where the gaps are now, in assistance already announced, and where the efficacy of that assistance has been diminished by the sheer scope of economic collapse.
The first is in that area of keeping employers and employees together.
The UK announced wage subsidies in the last week.
Our government remains steadfastly opposed to them, even though the most unlikely people are now advocating them.
Labor’s Jim Chalmers reports business leaders are universally saying this has got to happen.
The Government says it shouldn’t because it can more effectively deliver assistance through existing tax and social welfare systems.
The most conspicuous problem with that argument — the one we can most easily see — is what happened to the MyGov website and the Centrelink queues this week.
However, the most alarming problem with that argument — in terms of it actual effect — is that people aren’t going to actually get the assistance they need for at least a month — April 27.
…Labor asks why the Government couldn’t use the single touch payroll system — which commenced last year and gives real-time data on employees — to create a different base from which to pay wage subsidies.
While we all mull that question, it is worth noting that while hundreds of thousands of people wait for assistance from the government, the UK wage subsidy is 80 per cent of previous wage capped at 2500 pounds a month.
By comparison, our new JobSeeker payment will be 80 per cent of the minimum wage, if you assume current levels of rent assistance.
Surely, if we want to keep a pulse in the economy we need a sizeable part of the population to have a slightly more sustainable level of income.
But wait, Recessionberg read the paper on Sunday and rushed out a press release, the one thing that SloMo’s team does do superbly:
The federal government is planning to pay a generous share of wages for closed and hobbled businesses that retain their employees during the coronavirus recession.
The payments, being worked on by Treasury, will be similar to wage subsidies of 75 per cent to 80 per cent introduced by Canada, Denmark and the United Kingdom in response to the virus shutting down large parts of the economy.
Sources said Prime Minister Scott Morrison and Treasurer Josh Frydenberg were finalising government-funded wage payments, which are set to be capped at middle income earner levels.
But! Alan Kohler has shredded the “policy” as it comes off the fax:
If the government wants to actually reduce the recession’s depth, as opposed to just appear to be doing so, it needs to do a lot more than a wage subsidy.
That’s because it might not result in enough cash being paid out: businesses that are OK won’t need it, of course, and those that need it won’t ask for it because they’ll be toast already.
A wage subsidy in this situation would be flawed for two reasons: first, a very large number of people either work for themselves, or are contractors or own a small business and aren’t paid a wage by an employer; and second, wages aren’t the only business cost.
For many businesses, possibly most of them, zero revenue means closing down even if the government gives you the equivalent of 80 per cent of your payroll, because the remaining 20 per cent of wages, plus rent, electricity, internet etc are too much of a cash drain to keep going.
Temporay universal basic income is the answer.
It is no surprise that a real estate bullyboy and a glad-handing tennis pro have proven unable to guide Australia through an historic crisis. They were elected to boost house prices so the reality of governing exceded their capabilities on day one.
Thankfully others are now filling the void to mitigate the damage that will be worse than it needed to be.
