Lee Duffield

Edited by Lee Duffield
Freedom and Truth

FUTURES: What will happen coming out of the crisis?

The Australian government can be fairly accused of wanting to take advantage of the pandemic crisis, to try and get the neo-liberal system they have always been dreaming of.

Two aspects of their long-term behaviour indicate this will occur:

  • They have been having a go at every opportunity: putting in a regressive tax, the GST in 2000; the unsuccessful “Work Choices” attack on wages in 2006; the reactionary 2014 federal budget.
  • At every step a story is worked up to sell such acts, so constant propaganda, spin always comes with the policy – always in terms of the neo-liberal financial ideology.

Some uninformed journalists and others have been trying to say the government has taken up “socialism” and “Keynesian” economics, because of the big spend. No it hasn’t. Those two systems are more complicated than what is happening, which is just spending, on large scale, for an emergency like a major war.

The policy and the spin from the second half of 2020 will be that the Coronavirus debt, set at $130-billion, has to be paid out fast – absolute top national priority.

CHANGED CHARACTERS?

That lines up with the settled and consistent neo-liberal line of the government and counterparts abroad led by Donald Trump in the United States. Keeping things in perspective, there is no reason to expect a conversion ‘on the road to Damascus’ and see the emergence of a government of changed characters. There are clear indicators: the wage subsidy scheme was crafted to go through employers, with a million unengaged workers missing out; all the emergency spending has been explicitly declared “temporary” pending a “snap back” to “normal”.

The drive will be to get back to where we left off, with the “small government”, neo-liberal agenda: low corporate taxes, therefore low revenue, therefore low spending and negligent government services, therefore permanent budget surpluses. With that goes the drive to keep the maximum wealth in the hands of private investors, and attacks on unions to keep down wages and conditions – for a pool of cheap labour.

BACK IN THE BLACK

So getting rid of the big debt quickly must become highest priority, to embed a system of “small government”. But how to ‘leverage’ the big debt repayment program, with spin, so it is sure to both consolidate the system and distribute more wealth to ‘haves’, not ‘have-nots’?

First you might get the ‘government’ media – Newscorp newspapers, 2GB radio and Sky News – to say, improbably, Scott Morrison is a Churchillian leader: “our PM getting our country back in the black”. Still spinning, the psychology of debt repayment can be made real simple: us all getting out of a hole. This was employed by the former Liberal Prime Minister, Malcolm Fraser, in the 1970s. He used a scheme called partial indexation to cut wages in a climate of high inflation, so getting wage-earners to pay for a deficit. The spin was: “We’re like a family that has overspent its budget”.

Options for paying, and whether, for ideological reasons (see above), those are palatable or unpalatable options to the regime of the day:

Orderly debt repayment. Plenty of ‘analysts’ might say, while interest rates are low, be patient paying it back, run with a deficit for a while; meantime deliver better ongoing service and public support. NOT PALATABLE.

Borrowing. Money might get expensive what with every government on Earth needing to stabilise its budget. The government has an ideological aversion to “deficit and debt”, and sees the two as the same thing. NOT PALATABLE.

Raising taxes. No. The government says it will continue with tax cuts already foreshadowed. There might be some interest in regressive taxes, like extending the GST and Medicare levy. Governments have avoided those, until now too ‘courageous’ at election time, but the crisis provides a chance to try the new pitch: “we’re all broke and have to cop it”. NOT THAT PALATABLE.

Printing money and dodgy accounting. There is said to be a way through here, for a limited time. Money from the Reserve Bank for ‘bonds’ can fill some holes but might get ‘found out’; when there is nothing real behind the numbers you get reactions like inflation, so everything starts to go worthless anyway. PALATABLE.

Privatisations. Selling off valued assets held by all members of the public is consistent with the neo-liberal ideology; to put as much wealth as possible in private hands. Three institutions which will get targeted, happen to be ones that have provided practical aid and much relief to their owners, the Australian public, during the crisis: the Australian Broadcasting Corporation (ABC), Medicare, and the scientific body CSIRO working on vaccines.

On the spin-side of this, an interesting exercise is being carried out by the Liberal counterpart, the governing Tory Party in England. Its Ministers are loudly and systematically thanking the National Health — which they have been stripping of funds for a decade in a neo-liberal plan called ‘austerity’. It can sound as though they have changed and will now preserve it. Instead, privatising it might be done, on the theme of “we all love it” and as it is tragically short of funds, private investors can be brought in to “save” it. Spin is high quality in London, where living-on-thin-air is a classy art. PALATABLE – TASTY.

Attack on wages. As in the Fraser days, and as with “Work Choices”, a drive to cut wages is a high-risk-high-return exercise, but from a neo-liberal objective a ‘must try’ if opportune. A first, impatient shot was fired for 2020 by Adrian Schrinner, Liberal Lord Mayor of Brisbane. As soon as re-elected, on 28 March, he hopped in announcing a pay freeze for Council employees. The spin: save jobs coming out of the crisis, and if employee organisations object, “unions don’t run city hall”. More of this to be expected? Getting wage growth stalled has been a ‘success’ of government over recent years, from that neo-liberal perspective. Can it be taken further in a ‘wages sacrifice’ campaign to settle the ‘family’ debt? PALATABLE – EXTREMELY TASTY.

Loose talk has been circulating about re-doing the system – an “overhaul” of government and economic management. Some of that came from comments by the Reserve Bank Governor Philip Lowe, wanting changes to “reinvigorate the country’s growth and productivity agenda”; concerned about low economic growth prospects and projected high unemployment. The government response has been that it expects to get growth going strongly.

The Shadow Treasurer Jim Chalmers this week dismissed the talk of a “new way” as being “the old narrow ideological obsessions of the government”: anti-union drives in the industrial relations system; talk about cutting “red tape” and company tax.

“There’s more than one way to grow the economy”, he said. “There’s a role for energy, costs getting those down; research and development and science; skills development; we need to think about social housing … I think Australians would be disappointed to learn that after making all these sacrifices now to get through this diabolical health crisis, that waiting for them on the other side is just all the old fashioned approaches.”

A NEW AUSTRALIA?

What of a hoped-for cultural and national revival supposed to flow from the scourge of crisis?

Some signs of cultural change that might be “good”: common sense compliance with social distance-keeping; serenading and other creative activity in social media via proprietary software systems like FaceTime or Zoom; changes like working-from-home that might take hold. But the period of crisis has been short and may not go on so long as to make permanent impacts, old habits surviving: see booming sales at the bottle-shops, stocking-up to endure the time; anxiety among community workers about possible increased domestic violence; parents out against teaching their children at home.

In the wreckage of the theatre and other arts industries, all struggling to recover, loss of the ABC should finish-off talk of a creative and community renaissance. As prospective buyers of the ABC, and preferred government constituents, billionaires should be good with money, maybe not so good with the culture. Even if not outright philistines they are unlikely to care what happens to the ABC, if they can run a handy business on it, or remove it from the scene as a possible forum for criticism of their activities. Consider the additional impact on Australian culture of a foreign buyout of the ABC – maybe in tandem with a binge of foreign bargain hunting on a staggering Australian Stock Exchange. Viking raids would be a quaint historical rehearsal for all of that.

Coronavirus logo – AHU