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Every job Scott Morrison sacrifices now will only delay economic recovery

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Melburnians will hate these comparisons, because they are an early warning that Australia is repeating the pattern of past recessions, when the Victorian capital suffered the hardest landing.

The separation between Melbourne and the rugby league capitals has been a troubling feature of the pandemic so far. Melburnians were slower to emerge once restrictions were eased in May. Now that a large part of the city is in lockdown again, Melbourne will place a handbrake on whatever national recovery was underway.

There is no point in a parochial blame game between the big states. NSW Premier Gladys Berejiklian still has the Ruby Princess and Newmarch House nursing home tragedies in her column. But Victorian Premier Dan Andrews should feel uncomfortable at the next meeting of the national cabinet. It was only a fortnight ago that he played the smug card, telling South Australia’s government that he didn’t care if its border remained closed to Victoria. “I don’t want to be offensive to South Australians but why would you want to go there?” he said.

COVID-19 punishes complacency. We did not need the Melbourne outbreak to remind us of this.

But it does serve as a timely reminder that community confidence remains fragile, and Australia will remain exposed even after this spike in cases is dealt with.

Australia isn’t built for economic growth in isolation. At 25 million people, and with half its population concentrated in just three cities – 5 million-plus in Sydney and in Melbourne, and 2.5 million in Brisbane – it is too small to go it alone, and too urbanised to share whatever income it can generate locally.

The premiers and chief ministers understand this better than the Prime Minister at the moment because they are responsible for service delivery and would know that their communities are stretched, and stressed.

Illustration: Simon Letch

Illustration: Simon LetchCredit:

The states and territories are the federation’s housekeepers. They spend the money the Commonwealth collects in taxes, and raises through borrowing. It is easy to pick apart state excesses in good times. And it would be helpful if they reformed their taxes, so they were less reliant on the vagaries of the property market, and the fiscal mood swings of the federal budget.

But this recession changes the relationship in challenging ways. The Australian economy confronts three rolling shocks. In order of magnitude they are: the collapse of the global economy; the closure of our border to foreigners: and the restriction of local economic and social activity involving large numbers of people.

The first two fall into the Commonwealth domain; the third is where things get tricky. If the states and territories are to remain ever-vigilant on the health front, they need a generous Commonwealth safety net to reduce the risk of hasty reopenings and second-wave lockdowns.

But Scott Morrison is already showing signs of impatience for recovery. He wants to hand over responsibility to the private sector, when large parts of the economy can’t function normally. And that trademark tribalism has crept back into his public language.

Consider the argument over the cuts to the ABC’s budget. On the campaign trail in Eden-Monaro this week, the Prime Minister repeated his mantra for recovery. “The key thing for everybody in Australia at the moment [is] jobs”.

Inevitably, he would have to square that platitude with the 250 jobs that will be shed by the public broadcaster. Asked about NSW Deputy Premier John Barilaro’s criticism that it was disingenuous to claim there had been no cuts to the ABC, Morrison was defiant.

“The Deputy Premier is known for his wide-ranging comments,” he said. “What I know is that ABC funds are greater next year, the year after, under the three-year funding program, and I’m sure that’s a position that many media organisations and communications organisations would love to be in.”

This is literally the worst argument a government can make in a recession. Cutting an essential service when it knows the people it makes redundant can’t find work elsewhere is a recipe for higher unemployment, not more jobs. Why else would he refer to the collapse in revenues in the private media?

Imagine if he applied the logic of burden-sharing to the construction sector. Prime Minister, housing and commercial building are in free fall. OK, let’s wind back public infrastructure.

Then again, Morrison also tried to claim credit for giving the ABC a one-off increase in spending. “And in addition to that, there was over $40 million in additional support we gave to the ABC to support their regional activities in recognition of the important work that the ABC does in regional areas. The government has always understood that and we provided additional funds for that.”

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So ABC jobs are worth protecting in the bush, but not in the cities?

It made no sense, of course, because the cuts were originally announced before the pandemic, when the budget was tracking for surplus. In that context, the so-called “efficiency dividend” might have been defensible on fiscal grounds because every department was being asked to find savings. And the ABC staff laid off would’ve had a reasonable expectation of re-employment.

But every job the government sacrifices now, in what is shaping as the deepest recession since the 1930s, will only delay the recovery.

The question still nags. Is this Coalition government temperamentally suited to governing in an economic crisis? The scoreboard at the moment reads one all – Morrison’s own goal during the black summer of fires versus his world-class response to the pandemic in March.

Remember what made his example so compelling when he first steered the nation into lockdown? He listened to advice, and parked his leadership ego to share power with the states and territories. And he forgot about the culture wars.

The cuts to the ABC, and the CSIRO, the penny-pinching with the arts community and the government’s game of chicken with the higher education sector all betray a loss of focus. Every job is worth defending. Morrison said so himself when he was on top of his game in March.

George Megalogenis wrote and presented the three-part documentary series Making Australia Great for the ABC.

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