Up until recently, the last worldwide pandemic was the Spanish Flu at the end of the First World War. According to the National Museum of Australia
, 50 million people died across the world. Australia introduced a quarantine in October 1918 however around 40% of our population were struck down by the disease and 15,000 Australians died.
Once we as a nation were recovering from the Spanish Flu, the prices for our exports fell in the lead up to the ‘great depression’ of the early 1930’s, caused by a share market crash on the New York Stock Exchange in 1929. Again, according to the National Museum of Australia
the Australian economy crashed and by 1932, 32% of the population was unemployed. The unemployment rate was still 11% at the beginning of World War 2 in 1939.
Prime Minister John Curtin set up a Department of Post War Construction in December 1942. Don’t forget that in 1942 and 1943, Japanese bombs were still falling on Australia and the Allies didn’t land in France until mid 1944. Arguably, Curtin’s actions set Australia up for the growth experienced in the second half of the 20th century.
Essentially, the Australian economy only recovered from the hit of the Spanish Flu and the Great Depression due to the economic activity of and subsequent to World War 2. The 1930’s also tell us the social and economic consequences around having a large number of unemployed. By contrast this century, when required, governments have stepped in to prime the economic pump, attempting to reduce the consequences of a long-term economic slowdown.
Conservatives can no longer argue that the Rudd/Swan reaction to the Global Financial Crisis earlier this century was too much, completely irresponsible or inappropriate as Prime Minister Morrison’s recent stimuli announcements to attempt to manage the economic fallout from the Coronavirus pandemic of 2020 has by far exceeded the Rudd/Swan stimulus packages (with possibly more to come). The value of an economic stimulus can be higher this century because Australia no longer relies on the ‘gold standard
’, The potential for a large ‘government debt’ really isn’t the worst possible outcome and there will be structural flaws with Morrison’s package of stimuli, just as there were with Rudd’s.
Morrison claims that the package of economic measures he has announced to date are designed to be quickly withdrawn when the economy ‘snaps back’, rather than the ongoing debt added to the economy by Rudd and Swan. But how realistic is Morrison’s claim?
So far in 2020, Australian Governments at all levels have introduced quarantine measures that have severely restricted the ability of the population to move around and socially interact. While there is probably more science to it this time around, effectively it is the same principle as the quarantine imposed during the Spanish Flu pandemic. This has significantly and detrimentally affected economic activity around the country.
Morrison’s economic stimulus package includes the doubling of the unemployment benefit, gifting of money to those who receive a government benefit, quasi-nationalisation of private hospitals, paying the wages of those that don’t have meaningful work (through their existing employer) plus a number of grants, ‘free’ loans and other measures to a number of businesses. It reflects the lessons of the recovery after the Great Depression (without the need for the world to go to war again).
Morrison (like other governments around the world) has given the economy a sugar hit. And like all sugar hits, it’s much easier to keep getting them than wean yourself off them. Soft drink and confectionary manufacturers have been relying on this fact for centuries. There has been considerable pressure on this and previous governments to increase the level of the unemployment benefit to a value that people can actually support themselves with dignity while looking for work and it could be argued that the ‘temporary’ doubling of the benefit is a tacit acknowledgement that the benefit is far too low.
In addition, government agencies such as Centrelink are frantically employing people to cope with demands for actual service and action driven by people who have never had to enter the byzantine world where clients are presumed to be rorting the system until they prove otherwise. There is also a frantic effort by government agencies and companies to bring call centres up to an appropriate staffing level to match the level of demand. Health services are also being frantically rejigged to ensure that they can provide the services demanded of them through the current pandemic.
Australia has an opportunity here. Say, for example, we did fund government benefits so that those reliant on them could live with decency. Health services for those that needed support could get it without waiting years to go on the ‘official’ waiting list and those that needed a hand who use programs such as the NDIS received support in appropriate timeframes with appropriate funding. Most of the staff at government agencies such as NDIS and Centrelink would love to help people to the extent that they need, rather than impose processes and procedures that deliberately demoralise and victimise those that need support.
It would also be appropriate to ensure that independent state funded media, such as the ABC and SBS were funded sufficiently
to support their ‘essential’ purpose of providing information 24/7 for 365 days a year (because the next adverse event somewhere in Australia is just around the corner). No government is going to find all of the content of an independent media outlet to be sympathetic to their particular ideology.
Lenore Taylor, the Editor of The Guardian
recently wrote an article that suggested that ‘Australia can be a much better, fairer place after the coronavirus if we are prepared to fight for it
’. The ABC’s Laura Tingle has made similar comments
Even the Sydney Morning Herald’s
editorial on 3 April 2020 discussed why a wind back from the ‘sugar hit’ should be gradual
, suggesting that raising taxes is probably a better option than reducing welfare.
We are all heading to a new world and at this point we can’t explain how it works. If we all work together to create understanding and equality rather than revert to the ‘greed is good’ mantra that served us badly from the 1980’s to the 2010’s — it will be a far more equitable and pleasant place for all of us.
What do you think?