“For six years,” says Wayne Swan, “there virtually wasn’t a day where they didn’t pour shit all over me, telling lies about the effectiveness of the stimulus.”
The former treasurer, who saw Australia through the global financial crisis, feels he’s entitled to express a little righteous indignation just now.
He says he never got credit from his political opponents, despite the reality that Australia was one of just three developed economies that avoided recession. Instead, he was attacked for having spent billions of taxpayer dollars.
“And you know, they’re still doing it now, as they’re about to actually embrace it, at least its principles, if not its effective construction,” he says.
While there is room for debate about the effectiveness of some measures taken in haste as the country’s financial system teetered on the edge of collapse, the response was undeniably rapid and decisive – “go early, go hard, go household” was the then Treasury secretary Ken Henry’s famous advice – and it worked.
The Morrison government, by contrast, has inched towards stimulus. As Swan points out, long before the bushfires or the coronavirus pandemic, the Reserve Bank, among many others, was calling for the government to boost spending. Instead, the government preferred to base its claims as an economic manager on the slender pillar of a budget surplus.
“So,” Swan says, “we’re going into an external challenge, already weak. I mean, in the calendar year economic growth was 1.8 [per cent], the worst since a global financial crisis.”
At least now – more than two months after the emergence of the disease, some 120,000 cases around the world and 4000 deaths – the government has determined that addressing the health and economic crises posed by COVID-19 is worth sacrificing the surplus. But Prime Minister Scott Morrison and Treasurer Josh Frydenberg have been at pains to stress they will not “waste” taxpayers’ money, as Labor did.
Swan rejects their excuse, even as he endorses the need for big stimulus now. He says the package would need to be about $20 billion, just to be commensurate with Labor’s initial stimulus response, given the economy has almost doubled in size since 2008.
But Swan says the prime minister has backed himself into a corner. “Morrison’s problem is that he has spent years undermining the idea stimulus works,” the former treasurer tweeted earlier this week. “Imagine a doctor who campaigns for years against vaccines suddenly putting a needle in your arm!”
His point goes to the issue of trust – that after a decade of talking down the capacity of government to come to the rescue at a time of crisis, the government’s coronavirus response relies on the public to have faith.
Even before this latest global crisis, trust was a commodity in short supply – here and around the developed, democratic world – as evidenced by many surveys.
“The right will now attack any institution it sees as a threat to its interests or its friends.”
In January, Edelman released the 2020 edition of its “Trust Barometer”, which tracks people’s faith in institutions – government, non-government organisations, business and the media – across more than two dozen countries in the developed and developing world.
It found, particularly in developed countries, there are low levels of trust in all four sectors, although for different reasons. NGOs were seen to be more ethical but less competent. The reverse was true for business. The media was seen as neither very ethical nor very competent, while government was very unethical and very incompetent.
That was no big surprise – the findings were broadly in line with many other polls. Instead, the interesting bit lay in the level of what Edelman termed “trust inequality” between societies’ elites and the masses.
Among the “informed public” – those who are tertiary-educated, in the top 25 per cent of the income distribution and actively engaged in issues of business and public policy – trust in institutions was reasonably high. Among what Edelman termed the “mass population”, it was much lower.
The country with the biggest trust gap – 68 per cent for the informed public compared with just 45 per cent among the mass population – was Australia.
Edelman also found Australians ranked 21st of 28 nations when it came to optimism about future economic prospects. Only 32 per cent of Australians surveyed thought they or their families would be better off in five years’ time.
Seventy-four per cent – up 7 percentage points since 2018 – worried about “false information or fake news being used as a weapon”.
Just 27 per cent trusted government to serve the interests of all people equally and fairly; 61 per cent thought government served the few.
It would seem, in summary, that the mass of people, Morrison’s quiet Australians, have significant trust issues.
Of course, people have long been cynical about government. But it has got worse.
Another very credible and long-running survey of community sentiment, the yearly Scanlon Foundation–Monash University “Mapping Social Cohesion” report, released last November, gave a sense of the degree to which trust in federal politics has declined during the unstable years since the end of the Howard government.
In 2007, the year voters elected Kevin Rudd’s Labor, 39 per cent of respondents nonetheless indicated trust in government “to do the right thing for the Australian people” either “almost always” or “most of the time”.
In 2009, the year after the GFC and the successful stimulus, that rose to 48 per cent. Then, in 2010, as Labor was riven by leadership tensions, trust plunged to 31 per cent. It has never recovered. Last year, it stood at 30 per cent.
No doubt internal instability within both major parties has had a lot to do with this. But David Savage, associate professor of behavioural economics and microeconomics at the University of Newcastle, suggests another factor, too – negative campaigning.
Using fear as a motivating tool to scare people away from voting for someone else, he says, “works rather well. Unless you get into the sort of situation where now you’re saying, ‘Look, trust us when we tell you there’s nothing to fear.’”
That is precisely the situation in which the Morrison government finds itself.
It won last year’s election without setting a positive policy agenda, instead running an effective scare campaign against Labor’s detailed policy platform. It raised the spectre of death taxes, retiree taxes and new taxes on rental housing, alleged that Labor planned to force people into electric vehicles, and more. This was the continuation of a trend that began under Tony Abbott’s leadership – of government defined more by what it was against than what it was for.
There have been additional factors since the election, too, that militate against trust in government. Most notably, the so-called sports rorts affair, which related to an auditor-general’s report finding $100 million in grants to sporting clubs had been apportioned to favour key marginal seats.
But the sports rorts have morphed into something much broader, involving alleged misuse of multiple pots of money to partisan ends: $100 million in grants from the Environment Restoration Fund; $500 million for commuter car parks, and potentially more from the broader Urban Congestion Fund; a $150 million Female Facilities and Water Safety Stream, intended to build female change rooms and upgrade community swimming pools; $560 million in grants from a fund intended to ameliorate Indigenous disadvantage.
The list of alleged political rorting totals in the billions.
Summer’s devastating bushfires also dented the perceived trustworthiness of Morrison and his government. While he holidayed in Hawaii, his office staff wouldn’t say where he was. He and his government were seen to have ignored expert warnings of the pending catastrophe, and to have been slow to respond.
There is ongoing, justified anger among those affected about the slowness with which relief and recovery funds have been made available and the complexity of applying for them. Morrison has been marked down in the opinion polls as to whether he is “good in a crisis”; the whole government has lost skin on measures of competence.
Beyond these specific trust issues, though, there is something much bigger: a crisis in confidence not just in government but in institutions in general, in science, in expert opinion, in the capacity to hold rational discussion, in the very notion of objective truth.
Call it the “alternative facts” phenomenon, after the term used by Donald Trump’s former media spinner Kellyanne Conway.
The political right, says Richard Denniss, chief economist at The Australia Institute, has both encouraged and benefited from this breakdown in the information commons.
“Once upon a time,” he says, “conservatism was defined by deference to and respect for institutions. What we see on the right now, though, is the opposite of that.
“The right will now attack any institution it sees as a threat to its interests or its friends. So if science is bad for the mining industry, it will attack science; if a court decision goes badly for George Pell, it will attack the courts; if, as we see in the United States, the electoral system doesn’t generate the ‘right’ outcomes, it will attack the electoral system.”
Donald Trump, in his disdain for truth, facts and expertise, in his attacks on the institutions of democracy – often conspiratorially termed “the deep state” – is the ultimate political expression of this phenomenon. As of January 20 this year, according to the fact-checkers at The Washington Post, the US president had made 16,241 false or misleading claims.
In this conception of political engagement, truth matters less than the projection of strength and certitude. Never back down; never correct the record; never concede a point to the other side, even when the objective evidence shows they are right.
This brand of politics did not begin with Trump, and it is not limited to America. Right-wing populism has been on the rise in many places around the world for some time. But the US provides some of the best studies of its consequences.
Take, for example, what happened in that country during the pandemic before this current one, the H1N1 “swine flu” crisis of a decade ago.
Swine flu was a much bigger public health emergency than is widely appreciated. It killed an estimated 150,000 to 575,000 people worldwide in the 12 months after it first appeared in April 2009. In the US, according to the estimate of the Centers for Disease Control and Prevention, there were 60.8 million cases of swine flu, 274,304 hospitalisations and 12,469 deaths.
Within two weeks of the start of the outbreak, when only 20 cases had been confirmed, the Obama administration declared a public health emergency. After about six months, when a vaccine had been developed and was widely available, the administration began a campaign to encourage people to get the vaccine.
Its opponents promptly began a counter-campaign. Right-wing news outlets, notably Rupert Murdoch’s Fox News, downplayed the seriousness of the H1N1 threat. A number of influential media commentators and Republican politicians actively discouraged people from getting inoculated – for no better reason than that it was an initiative of their political opponents.
The consequences were subsequently set out in disturbing detail in a 2011 analysis by Matthew A. Baum, professor of public policy at Harvard’s Kennedy School of Government, titled “Red State, Blue State, Flu State: Media Self-Selection and Partisan Gaps in Swine Flu Vaccinations”.
Democrats, he found, were almost 50 per cent more likely to get vaccinated than Republicans.
As a result, according to Baum, there was a highly significant correlation between deaths from swine flu and political partisanship. Across the US, he wrote, “as states become relatively more Republican, swine flu-related deaths rise”.
His point was not that conservative voters are terminally gullible, it was that “even seemingly non-partisan political issues like public health are increasingly characterised by partisan polarisation in public attitudes and that such polarisation is partly attributable to the breakdown of the information commons”.
It is fascinating, then, to watch the reaction of the political right to the coronavirus outbreak. Even Trump, having initially insisted it would all be over quickly, and everyone would get better, now shows signs of listening to the experts.
If there is any good to come out of the current crisis, suggests David Tscharke, head of immunology and infectious disease at the Australian National University’s John Curtin School of Medical Research, it is that expert knowledge may be valued once again.
Tscharke says he has been troubled by the way politics has denigrated expertise in recent years, such that “basically, anyone’s opinion has as much value as anyone else’s”. He mentions bushfires, climate change.
“It will be interesting to see if through an experience like this, which is going to demonstrate again that expert advice is of value to society, whether that will perhaps shift the pendulum back again,” he says.
That may be a fond hope. One thing is apparent, though – Australia’s government has realised the need to bolster its credibility by associating itself as closely as possible with those in whom there is greater trust.
ANU political scientist Professor Ian McAllister notes that Morrison has been keen to stress that the response to the coronavirus has been driven by experts. Chief medical officer Brendan Murphy has become a fixture at government media conferences.
McAllister also points to “quite a bit of literature” suggesting the crisis could work to the government’s advantage, regardless of previous low levels of public trust. He calls it the “rally-around-the-flag effect”.
“If there’s an existential threat to the country, a physical threat, or in this case a health threat … there tends to be a spike in public opinion and supporting the government,” he says.
McAllister places a couple of caveats on that, though. The first is this is the second “really significant” crisis in the space of three months – and the government did not emerge from the bushfires in good standing. The other is the unknowable course of the disease.
To this point, the government is generally seen to have got it right on the medical response with the $2.4 billion package announced this week. It was, quite literally, just what the doctors ordered.
And the $17.6 billion economic stimulus package is roughly equivalent in quantum to what Labor did 12 years ago, allowing for the economy’s growth since the GFC.
The big question is how the public will react if this crisis is bigger, or more protracted, than the government has planned for. Its current response is predicated on the prospect that the worst will be over by midyear.
That would make sense if this were just another seasonal flu, peaking in winter and then declining, for which there was a vaccine and established treatment.
But COVID-19 is not the flu. Medical science is yet to find a vaccine for any of the six or seven types of coronavirus to affect humans.
As Tscharke explains: “We know exactly how to make influenza vaccines. And in fact, every year, we have to make a new one as the strain changes. That formula, if you like, can be applied to any flu strain that comes along. It’s relatively simple. With something like coronavirus, we don’t have that background knowledge.
“So it’s a very complicated business, from the discovery science through to the trials – and bear in mind that there’s not one particular easy animal model to do those preclinical trials in – and then you have to have enough people in a phase one safety trial to make sure that it’s safe. The estimates people are throwing around are a year to 18 months.”
Things may get better sooner, or they may not. We just don’t know.
And that could place a serious strain on public trust, when there isn’t much to begin with.
This article was first published in the print edition of The Saturday Paper on
Mar 14, 2020 as “Trust deficit threatens COVID-19 response”.