Wednesday, March 18, 2020

Today by Paddy Manning

Stimulus 2.0
The PM must do better this time

© Lukas Coch / AAP Image

Once again the New Zealand government of Prime Minister Jacinda Ardern has shown Australia the way forward, yesterday unveiling a stimulus package that was not only proportional to the economic threat posed by the COVID-19 pandemic, but which sought to make the country fairer in the process. The NZ$12 billion package was valued at 4 per cent of GDP – four times bigger than Australia’s first package, announced last week. It included wage subsidies six times more generous than ours, so that hard-hit employers could keep people employed, plus payments for those self-isolating, a permanent increase in social security payments, and a big boost to healthcare spending. Talk about not wasting a crisis. As he prepares Australia’s second stimulus package, Prime Minister Scott Morrison – who won plaudits for finally speaking in unequivocal terms about the pandemic at a press conference this morning – should take the opportunity to think about what the real objective is, and what it isn’t. After all, the chance to spend these tens of billions won’t come again anytime soon – we’ll be paying this off for another decade at least – and there are lessons that can be learnt from the global financial crisis.

Let’s start with what the objective isn’t: achieving 0.1 per cent GDP growth in the June quarter, to miraculously avoid a technical recession and claim political credit. That’s what Labor did in 2009 and, while Labor’s first and second stimulus packages undoubtedly deserve praise for saving hundreds of thousands of jobs, particularly in the construction sector, there is far too much store put in whether the first decimal point number is positive or negative. We had a downturn. As Nine Media economics editor Ross Gittins reminded us on the weekend – and wrote extensively at the time – there are much better definitions of recession than two quarters of negative economic growth. One definition, by economist Saul Eslake, is any period during which the rate of unemployment rises by more than 1.5 percentage points in 12 months or less. On that measure, in 2008–09, we did have a recession.

What’s more, although many of the covered outdoor learning areas are nice, spending $16 billion on school halls was hardly the nation’s most pressing need in 2009, and doesn’t form much of a legacy for Labor (and is kind of embarrassing as taxpayers continue to fund construction of Shakespearean theatres, orchestra lifts and swimming pools with moveable floors for elite private schools).

The fiscal measures the PM has announced so far, including last week’s $17.6 billion stimulus package, and today’s $715 million airline bailout, all seem designed to prop up the economy in the short term – as he said today, “cushion the impact” – rather than making sure we can sustainably recover in the medium to long term. While the government is understandably in crisis mode, it is not too much to ask it to also lift its sights when it comes to the second stimulus package, expected to be unveiled as soon as tomorrow.

Late yesterday, the Australian Council of Social Services proposed a suite of key measures including: additional $750 payments for families whose primary income is social security; increasing Newstart, Youth Allowance and related payments by at least $95 per week on a permanent basis; and extending all business-related stimulus measures to community sector and not-for-profit organisations. This would make Australia a fairer place, as well as stimulate the economy. (Of course the government is heading the other way, as in this vindictive and counterproductive move to quarantine the $750 stimulus payments to 15,000 people on the cashless welfare card.) Last week, eminent economist Ross Garnaut told Nine Media it was “exactly the right time” for the government to direct cash into renewable energy infrastructure, and that while Australia could not avoid sliding into a recession, governments could “shape the way we come out of it”.

Once again, Jacinda Ardern has set the bar high. Let’s see Scott Morrison jump over it.

“My colleagues and I … gave our consent for evidence to be video recorded, presuming it was to be used for proper parliamentary purposes. What is of most concern to the Law Council is that some of the evidence given, mainly by women, has been the subject of scorn and denigrating comment on the One Nation Facebook sites.”

Pauline Wright, president of the Law Council, who has written to Liberal MP Kevin Andrews, chair of a parliamentary inquiry into family law, calling for the inquiry to be abandoned after One Nation broadcast the inquiry’s hearings on Facebook. She is supported by independent MP Zali Steggall.

“Sorry, I’m beginning to wonder whether those calling the shots know what they are doing. Obviously governments are taking their advice from health ‘experts’. Too bad if the health ‘experts’ aren’t right.”

2GB broadcaster Alan Jones, doing his best to get taken off air by doubling down on his questioning of the seriousness of COVID-19.

George Pell’s last stand
A year ago, George Pell was sentenced to six years’ jail for the sexual abuse of two Melbourne choirboys. Last week, he appealed against that decision in the High Court and a judgement is still pending. Today, Rick Morton discusses what happened during the final bid for George Pell’s freedom.


The number of instances of potentially unlawful conduct by Australian special forces in Afghanistan that NSW Supreme Court judge Paul Brereton is examining as part of his inquiry for the inspector-general of the Australian Defence Force.

“Affordable, sustainable and safe housing is something that concerns all Australians. It’s vital we do what we can to make construction more efficient and cost-effective, without reducing quality. Making sure our homes and apartments are built to the highest standards is particularly important given recent issues which have disrupted the lives of Aussie families and impacted confidence in the sector.”

The industry minister has announced $50 million in grant funding for two cooperative research centres to make construction “cheaper and safer”, including by reducing the cost of concrete.

The list

“Even as we increasingly distrust our politicians, Australians have a very high level of trust in government. But Australians have been living under what, to many, seem like apocalyptic conditions since the beginning of summer, and our experience is that government – at least federally – has largely been MIA. When our news media gave us experts telling us that what our TV screens and social media feeds showed us happening in China, South Korea, Italy and Iran could soon happen in Australia, we were primed to take notice.” 

“The links between music and the brain are deep and persistent … And because we process musical memories in so many different parts of the brain, they can be remarkably resilient, even against the onslaught of advancing dementia. Professor Felicity Baker says the right song can transform the most withdrawn patient. ‘When the music stops, they might suddenly say, “I remember when my husband used to take me to the dance,” or “I sang this song to my child when she was a baby. ”’”

“So much of how she communicates with her dancers is through movement, a language that is half words, half dance. It’s a beautiful thing to watch. It’s a way of communicating that’s flowing and subtle. ‘Like this,’ she says, showing them how it might be. Or she adjusts their bodies a little. They all finish one another’s sentences, dancers and choreographer, and not always with words.”

Paddy Manning

Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Inside the Greens and the unauthorised biography of Malcolm Turnbull, Born To Rule?


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