Opinion
Economy is growing but the pandemic will affect us for some time
Shaun Carney
Regular columnistIn a pandemic, it pays not to get too attached to your expectations. In early 2020, the Morrison government came up with an anaemic initial financial support package before having another go with the much more generous and realistic JobKeeper and JobSeeker supplement payments.
The programs were supposed to last for six months. That was as far as governments – and, to be fair, many of us – could see back then. There was a general view around at the time, based on hope more than anything, that the pandemic might be mostly a 2020 phenomenon and it was a hard belief to break. Remember the celebrations when the calendar ticked over into 2021 and we could put 2020 behind us?
There was a sense that the pandemic was behind us when the calendar ticked over to 2021.
Alas, the expectation turned out to be too ambitious: the pandemic support programs had to be extended into 2021 and have only recently been wound up. When those pump-priming measures were put in place, anybody who suggested they represented a decisive shift in the role of government, restoring it as the active economic player it used to be before the neoliberal policy revolution of the 1980s and during the global financial crisis, was scoffed at.
Nonsense, the federal government’s advance agents insisted. This was a one-off; normal policy settings built around budget surpluses and a horror of deficits were soon to return. Except, that’s not happening. Next week’s budget will keep up the big spend because the economy needs it. We still need it.
Maybe now we can call this a decisive shift. The uncomfortable truth is that this pandemic looks set to affect us for a good while yet. Yes, here in Australia, we’ve got just about as close as you can get to eradicating the virus. Our economy is growing, with employment rising.
And yes, a range of reasonably effective vaccines is on offer and we’re slowly getting ourselves inoculated. But the virus keeps mutating. This makes it a wily and elusive target, threatening the longer-term efficacy of first versions of the vaccines.
People queueing outside the Melbourne Convention and Exhibition Centre to get the COVID-19 vaccine.Credit:Joe Armao
With lockdowns hopefully behind us, we can move around again in our own country and in New Zealand. The pre-Federation concept of Australasia is a reality. But where else can we go? With so many parts of the world looking like they’ll be fighting the coronavirus for at least the next couple of years, how mobile are we going to be beyond our shores? From America comes the news that health authorities there have already given up on the prospect of achieving herd immunity because so many Americans are vaccine refusers.
As for bringing people from other countries here in big numbers for work, study or play, that seems a long way off, too. This has consequences not just for universities and tourism and hospitality industries that rely on overseas visitors, but for the economy more generally.
Our model of economic growth has for decades been built on importation of new residents who bring skills, a willingness to do the jobs the existing inhabitants don’t want to do, and demand for goods and services. That model is on hold and governments are keeping things moving through spending.
The longer the pandemic goes on, even if we’re living – safely but slightly apprehensively - within our trans-Tasman bubble, the more it becomes a transformational event that is reshaping our society, our economy and the way we’re governed.
We’ve learned or been reminded of a lot about ourselves in the past year. For all our cynicism and often tribal attitudes to politics, most of us find strong governments attractive, their political complexion mattering less than their willingness to go hard in protecting us.
We like impermeable borders backed by strong measures. For better or worse, the Morrison government is unlikely to suffer a net loss of support for its tough line on anyone seeking to come here from India.
The federal nature of our governmental structure has reasserted itself, with the states being more prominent in our daily lives than they’ve been in 50 years. They’re going to stay that way – and people for the most part want that.
Meanwhile, strong borders, harsh talk and guiding the economy via greater spending are seen as key performance indicators for government at the federal level. Regrettably, the Commonwealth has lost the capacity to smoothly deliver practical programs of large magnitude such as human quarantine and the vaccine rollout. That’s now the role of the states.
But while we look for governments to be assertive, even draconian at times, we’ve also been reminded how important it is to work together. This was especially so in Victoria late last year. We know we’re part of something greater than ourselves – we’re living it. No matter how long the pandemic lasts, to be successful, governments will need us just as much as we need them.
Shaun Carney is a regular columnist.
Shaun Carney is a regular columnist. He is the author of books on industrial relations and the life of Peter Costello, and has been commended by the Walkley Award judges for his political columns.