March 14, 2020 06:33:47
“The genesis of this economic shock,” Treasurer Josh Frydenberg said on Thursday, “was outside of our control, but our response is not.”
The art of looking in control — not just as a political conceit, but as a really important signal to the community — is badly needed now, and feels like it has never been in shorter supply, either here or globally.
The Government’s economic package this week is remarkable as a sign of how far the coronavirus pandemic has forced politicians out of their ideological and rhetorical comfort zone.
A political party that had been locked into its economic mantras and slogans for at least a decade had to leave them behind in the face of a slumping economy, even if the need to ensure the policy measures didn’t look like Labor’s global financial crisis response (even if they sometimes were) carried a little too much weight in the whole exercise.
But in times like this, even such a shift is no longer enough, or an appropriate point of reference.
The scope for reassurance is disappearing
As Black Friday unfolded, with the share market crashing further, more international alarms sounding and mass events being closed around the world, the scope for politicians to reassure their communities anywhere was disappearing.
The Prime Minister’s jolly claim that he would still be going to “the footy” on Saturday didn’t just look ill-advised, but led to criticisms from health experts that it was irresponsible or a failure of leadership.
@Qldaah tweet: I’m going to the footy this weekend.
Even before that, within minutes of the Government announcing its plans for a $17 billion package, the conceit that the Government was in control of anything was smashed by the reckless language and base politics of the US President.
Donald Trump’s intervention in the form of a ban on travel from Europe — which implied the closing down of trade in goods as well as people — did not just have financial market implications either.
The market fallout reflected a growing global alarm that the most powerful nation in the world seemed incapable of comprehending, let alone mounting, an effective domestic public health response to a pandemic that had spread at a frightening pace around the world.
The irony of a germophobic president who seemed incapable of understanding the risks to either public health, or the economy, was extraordinary.
A strange mix of complacency and alarm
Until this week, Australia has done a reasonable job of containing the import of the virus from other parts of the world.
But as the week progressed, cases started to emerge here and there of infections that couldn’t be directly traced to travellers.
That immediately changed the dynamics of the task for our political leaders and our public health officials.
In a situation where experts from immunologists to economists, and a number of politicians, were starting to sound the alarm mid-week and ask why mass events were not being closed down, echoing the rapid scaling up of whole cities and countries being shut down elsewhere, it was a shame that it took until Friday for this to become an official policy here.
On important exception to the good handling of the containment of the virus has been the lousy coordination and escalation of information people need about dealing with this crisis, particularly in vulnerable sectors like aged care.
Just the basic questions and answers: where people should go and what they should do?
Most importantly, there needs to be some clearer guidance on the conflicting signals we all get about how most of us will just have a mild form of the disease, or that it only hits old people, on the one hand, and the clear alarm of health authorities about its high rate of contagion, and possibly overwhelming demands on our hospital system, on the other.
Those signals have led to a strange mix of complacency and alarm which is hard to now untangle.
We’re confronting a place we don’t really recognise
The states have been better at the public messaging, and much franker about the numbers of people that will potentially be affected.
NSW and Queensland health officials have said they are expecting between 20 per cent and 25 per cent of the population to contract the virus in the first wave of a likely outbreak as we go into winter, and are planning on that basis. That’s millions of people.
But this weekend we confront a place we don’t really recognise: where schools and universities could be shut down (whether or not this is the generic advice), sporting fixtures and concerts cancelled, where there are calls for the borders to be closed entirely, where official advice is that none of us should leave the country if we can help it, and most importantly, an entire country is gripped by a fear of what it is facing.
The announcement of a national cabinet comprising federal and state leaders advised collectively by their federal and state officials will hopefully help improve the sense of control and the information flow.
But if we go back from that point to looking at the economic response this week, it gives a better perspective on what was done, and what might still be needed.
First, let’s start with language: an economic “stimulus” package. It suggests something you give someone who is just a bit down in the dumps, needs a bit more perk in their lerk.
It is probably more useful to think about what the Government is doing as providing a “safety net” for an economy that for all intents and purposes could be in free fall in the next couple of weeks if the growing body of global opinion — that the best response to this virus is a complete shutdown — takes hold.
In such circumstances, it is better to think about the task at hand for government economic policy as being some form of income safety net.
So how effective is it then?
The hole in the policy
The measures to help subsidise wages through the business community seem to make good sense: they are linked to people who are paying wages and are easily implemented through the tax office.
It’s the income support measures paid directly to workers that are more problematic.
Let’s leave aside questions about equity for a minute and just think in pragmatic terms about the effectiveness of these measures as a safety net.
One-off payments to pensioners, people on Newstart, and those receiving the Family Tax Benefit are fine.
But it is not clear they go entirely to the problem at hand, which is the need to keep people’s incomes flowing through periods in which they might have to either self-isolate, or stay away from work because of closures or because they become very ill.
While there has been some attempt to look like the casual workforce has been considered (by the move to give casual employees access to a sickness payment equal to Newstart), it doesn’t add up to income replacement that would encourage, or allow, casual employees to stay at home if they are feeling a bit unwell.
That’s got to be a hole in the policy.
And, if the Government is going to be as dynamic in its responses as it is pledging, it is one it should be open to thinking about further.
Laura Tingle is 7.30’s chief political correspondent.