The Politics    Tuesday, March 10, 2020

Avid on COVID

By Paddy Manning

 Avid on COVID

Source: Twitter

The PM risks over-egging the response to the coronavirus

At the AFR Business Summit this morning, Prime Minister Scott Morrison boasted of his foresight, saying that as treasurer in 2016 he realised Australia’s budget position needed to be stronger to “deal with the shocks that will inevitably come”. Credit where credit’s due, the Coalition had almost gotten the federal budget back in balance, even if the surplus is now jettisoned due to the stimulus program of up to $10 billion to counter the economic impact of COVID-19. But there was almost relish in the PM’s sermon: “What we spoke of has now come before us,” he said. “This time we are in right now was what I was talking about back in 2016.” He would be wise to avoid congratulating himself too much. It might seem cynical to say so, but the PM has embraced the COVID-19 crisis too readily, firstly as a welcome distraction from the spiralling sports rorts affair, and secondly as a get-out-of-jail-free card on economic stagnation. If it happens, a short recession that can be blamed on a virus and not on the government, and which is followed by a sharp recovery and a heroic return to budget surplus in time for the next election, could be a blessing in disguise. It would be the recession the Coalition had to have.

The prime minister calls the response to COVID-19 a “team Australia moment”. It certainly hasn’t felt like teamwork, as irrational panic buying takes over. Asked if the world was overreacting to the virus, the PM told The Australian Financial Review’s political editor Phillip Coorey, “If you look at the supermarkets at Chullora you could quickly come to that conclusion. And that’s why I think it is important that we get this into perspective … This has a fixed life, this virus. It will run its course.” Even this afternoon, a spectacular market bounce back [$] took place, with the Australian share market returning into positive territory after President Donald Trump unveiled a US stimulus package, including payroll tax cuts.

The problem for the PM and the treasurer is they spent so many years rubbishing Labor’s response to the global financial crisis that they can’t copy it when going early, going hard and going household may be exactly the kind of fiscal stimulus that’s required to stave off recession. As former treasurer Wayne Swan, who shepherded the Australian economy through the GFC, tweeted today: “Morrison’s problem is that he has spent years undermining the idea stimulus works. Imagine a doctor who campaigns for years against vaccines suddenly putting a needle in your arm!” Another former treasurer, Peter Costello, today advises [$] that the government could be forced to unveil a secondary stimulus package in the May federal budget if the COVID-19 crisis hits the economy deeper than expected.

It’s not just the budget surplus that is gone: Nine Media reported today that the government may be forced to raise its self-imposed $600 billion debt limit again. (If only they’d get rid of it entirely.) Labor’s shadow minister for finance, Katy Gallagher, was quick to hold the government to account, pointing out that net debt has more than doubled under the Coalition even before the outbreak, from $175 billion or just under 11 per cent of GDP in September 2013, to $430 billion or over 21 per cent of GDP seven years later.

The Coalition’s reputation for superior economic management is now being tested. As investigative journalist Michael West wrote in this piece of incisive analysis last year, that reputation hardly stands up to scrutiny: growth has slowed markedly on Treasurer Josh Frydenberg’s watch, and the treasurer to deliver the worst economic growth figures is his Liberal predecessor John Howard, back in the early 1980s.

The PM is needlessly politicising the response to the coronavirus, and wrapping it in the flag with his patriotic exhortations. It is not at all clear that the economy is in a better position to respond to COVID-19 because the Coalition happens to be in power – in fact, a robust injection of funds into the public health system as Labor proposed might have been just what the doctor ordered right now. As many have observed, if the PM anticipated just such a crisis years ago, why did the government he was part of defund CSIRO research into infectious diseases?

Listen to The Politics Podcast, with Rachel Withers

“If you accept the science, as most rational people do and my company does, the baseline discussion that is coming from our lawmakers is very, in some cases, toxic … I speak to a hell of a lot of farmers every day of the week, big ones and small ones. I’m not getting any push-back on the fact that climate change is coming, and they’re willing to adapt. So I don’t know why the discussion isn’t easier to have in all levels of government.”

Hugh Killen, head of Australia’s largest listed cattle company, AACo, warns politicians that they are hurting the industry with their toxic debate on climate change.

“My management and the government discussed the fee; that’s none of your business.”

National Careers Ambassador Scott Cam defends his taxpayer-funded salary of $345,000 for 15 months’ work.

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The total value of six taxpayer-funded grants in the key marginal seat of Longman that were approved under the closed, non-competitive $60 million Mutual Understanding, Support, Tolerance, Engagement and Respect initiative, through the Department of Social Services in the month before the last federal election.

“What I say about the minister lacking authority to direct decisions or be the effective decision-maker … applies equally and perhaps even more strongly to a mere official in the minister’s office, the prime minister’s office or the prime minister himself. The cloud hangs over all of them.”

Geoffrey Lindell, emeritus professor of law at the University of Adelaide, tells the Senate inquiry into the administration of sports grants that he has “serious doubts” that former sports minister Bridget McKenzie had authority to approve the grants and could be personally liable

The list

“At the height of the bushfire catastrophe, Sue Ashton and her colleagues at the Port Macquarie Koala Hospital were ‘all working on autopilot – there was no let-up’ … But even though the flames have eased, the recovery effort isn’t over.”

“We were told that all the grants signed off by the then sport minister, Bridget McKenzie, were eligible – until they weren’t. The government followed the caretaker convention – until it didn’t. The PM’s office was never directly involved in the decision-making process – until it was … But the prime minister is utterly unconcerned: he has his story and he is sticking to it, and that is all that needs to be said, or, more often, shouted across the parliament. The pork has been delivered; now for the porky pies.”

“Australian schools missed out on $10 million in federal government funding earmarked for school sporting grants in the past two years because the central distribution agency, Sport Australia, used it for administration, technology, marketing and other associated programs.” 

Paddy Manning

Paddy Manning has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.

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