Has the Australian government done an ideological and political backflip or not?

By Joe Montero

A spinoff the Corona virus pandemic is that Scott Morrison and his government’s image have been partially re-written – at least for now. The legacy of neoliberalism, Allegations of rorts and outright corruption, have faded into the background, allowing a temporary re-writing of illusion, of a leader and government undergoing a monumental change.

Some of the measures taken have been necessary. Few could properly argue against them. This does not mean that there is no room for serious criticism. There is. But this is not the subject of discussion here.

What is, is a response to the assertion made by some, that this same Prime Minister and government, have suddenly made a major ideological and political shift. There are those who are even suggesting this shift is towards socialism, or at least, a re-discovery of some form of Keynesianism.

A few points should be made clear from the outset.

Any Crisis, if it is of sufficient magnitude, will compel he government of the day, no matter what the colour of its stripes, into an emergency reaction. This does not necessarily mean a change in ideology and politics.

Secondly, there is a world of difference between short-term necessity and longer-term goals. One is passing and the other is far more permanent.

Thirdly, there is a big difference between pumping money to the corporate world, which is essentially what the Morrison packages are, and a change in direction. This has long been the practice. Take the current example of subsidising wages. Rather than providing this directly to wage earners, it goes to employers to help pay the wages bill. This is a continuation of the past. Not a change in direction.

Hoarding and profiteering have become issues. The arrival of the Corona virus has brought about a spike in both.

Australia’s Home Affairs Minister, Peter Dutton, admitted as much on 2GB’s Ray Hadley’s program: “We do have some people I think that are profiteering”. This was in reaction to reports of large-scale withdrawal of products like toilet paper, which might even involve organised crime.

Dutton went on to say: “They’re hoarding, not for their own consumption, I think they’re either sending some of the products overseas or they’re selling it in a black-market arrangement in Australia”.

No real practical action has been taken by the government to counter this. It couldn’t. To do so, would have violated the basic ideological mantra, of allowing the free operation of the market and ensuring as little government as possible.

Unrestricted capitalism depends on the ability of businesses to take every opportunity. If in the given circumstances, it is profitable to hoard and then sell at a higher price, it will be taken advantage of. If there is an opportunity to gauge out a higher price, it will not go wasted.

The only difference now, is that a crisis has extended the opportunity to profiteer.

To interfere with this would require an ideological about face. This has not and will not happen under the watch of Scott Morrison and his government.

If one is honest, this has not only been the position of the Coalition. There has been a kind of bipartisanship on it since the early 1980’s. It was Labor, which pioneered the withdrawal of government, privatisation, financial deregulation, and more. Labor abandoned the prior Keynesian consensus and ushered in the era of neoliberalism. The Coalition mainly differs in that, it took the process a whole lot further.

While Labor might have made some shift towards rediscovering Keynes, there is no evidence that the Coalition has done anything of the sort, and this includes during the present crisis.

At the same time, the fact that it has had to go into crisis mode, has shown that the market has failed to save the day, and it is this that has forced intervention. The market cannot impose quarantine, mobilise resources for the effort, and ensure these resources go where they’re needed. No matter how committed you are to the market, it is impossible to ignore these inconvenient facts.

It inevitably throws up more questioning about how an unrestricted market operates, and whether it should be curtailed? Should neoliberalism be jettisoned once and for all, and the nation move in a different economic policy direction? Since government intervention has now been necessary to ensure a fairer distribution of resource, can this point to a direction for the future? The more the pandemic spreads, the more these questions are going to be asked asked.

Especially as the economic and social impacts of this crisis continue to bite, after the infections have stopped. Problems already in existence, like the growing distribution gap between the few at the top and everyone else, the rise of precarious work, massive household debt, the lack of affordable housing and more, will still be there, and made worse by the pandemic.

As Tim Costello wrote, that in addition to the economic challenges, the nation will be confronted by a wave of grief and trauma, and this will bring fundamental choices about how we go forward in terms of the economy, society and our freedoms.

Herein lies a big problem for the government of the day. There are but two options for it in this scenario. To give in to social pressure or stand firm against it. A wrong choice will bring the risk of seriously undermining its capacity for survival.

Will it abandon its core belief on the market as king? This is highly unlikely. Its unity and reason for being would be shot to pieces. There will be an effort to return to the policies prior to the virus. The $213 billion government debt brought about by the Morrison package means, that this will be as quickly as possible.

Given its commitment to cut taxes for big business and the wealthiest, plus the ongoing subsidies for these same businesses, the bill can only be paid by raiang revenue with a combination of a new round of massive expenditure cuts, and raising income tax for wage earners and other charges.

What will be the reaction when some of the recent benefits, like wage subsidies, increases to those on Centrelink payments, free childcare, come to an end, and there has been a big increase in the number of unemployed? How well will it go down with the public?

Now that we have been given a taste of the national and personal effect of an environmental crisis, the call for more to be done to reduce carbon emissions and shift to a sustainable economy will strengthen. There is now greater awareness that failure will result in more and worse of the same.

There will be pressure to invest a lot more in the public health system.

A return to the past may not be so easy. It will be contested. The world in which the government must operate really has changed.