I wish it were hard to believe that just last week Josh Depressionberg announced a major tightening of fiscal support, the RBA put the stimulus cue in the rack, and the Morrison Government tried to bulldoze state quarantine borders in preparation for a rushed international opening to renew mass immigration and his favoured house price growth economic model.
But it’s not hard to believe because that’s how stupid our macro managers are. They can only hold one idea in their heads and this is it: boost the bubble whatever the cost.
Yet here we are one week later and the plan has imploded. Victoria has entered a state of emergency as the aged body count mounts. Plus, the kind of lockdown one would normally associate with martial law. Its borders will be shut for many months to come.
Likewise, QLD shut last week and WA has rebuffed the Scummo plan to infect it with the virus:
The Prime Minister wrote to WA Premier Mark McGowan on Saturday night to say the commonwealth would no longer participate in Mr Palmer’s border case.
But federal officials have already testified at a Federal Court hearing on the facts of the case last week.
If it comes to it, WA should point blank refuse and plunge the Consitution into crisis. Insisting it open the border is the worst public policy decision that I can remember.
Or maybe this is. Via The Australian:
The Morrison government is committed to helping Victoria fight its spiralling coronavirus infection and death rates but reluctant to give special financial treatment to one state because of the COVID-19 outbreak.
Scott Morrison and Daniel Andrews are due to talk on Sunday about Victoria’s move to Australia’s strictest pandemic restrictions on business, schools, public transport and movement.
The Victorian Premier will make the decisions on the restrictions and how they are enforced as well as when they will take affect but the Federal government has already signalled it will do what it can to help bring the infectious outbreak under control.
But senior Coalition ministers are wary of providing commonwealth financial assistance to Victoria above and beyond what has already been provided for all states and territories on a national scale.
While there are calls to extend the $340 billion JobKeeper and JobSeeker programs for Victoria, given the Budget assumptions the Victorian lockdown would have been lifted in three weeks, not tightened and extended, the Morrison Government is reluctant to single out a state for special assistance because of an outbreak.
How does crushing Victoria promote a national recovery?
Sadly for the nation, the Morrison Government is lurching hysterically from bullying one state to the next as its mad border opening plan is torn apart by the federation, eaten by the virus and shat out by an increasingly angry polity. Summarising the disarray makes the point:
- VIC’s virus suppression is in danger of wiping the state from the map.
- NSW is battling on with suppression but is on a knife’s edge permanently.
- VIC will succeed with its Stage 4 lockdown, leading to the complete isolation of NSW with the virus so it will have to shut.
- WA, QLD, SA and TAS are rightly sealed shut, enjoying life and loving their leaders.
- The credibility of testing and tracing is seriously challenged and faith in quarantine is gone.
And we’re supposed to be crashing off fiscal support, getting nothing more from the RBA, unleashing loan defaults and opening the international borders, all in the next few months. This is fantasy.
The states are crumbling towards virus elimination by default while the Morrison Government chases its own suppression tail, making it more difficult. It should back elimination NOW. And fully fund it federally.
With determined leadership, we can all be virus free by November at the price of a little more federal debt that is utterly irrelevant and monetised by the RBA anyway.
Then the fortress economy can grow.