Tuesday , October 27 2020
Home / Federal Politics / Morrison has to choose whether to force the economy open

Morrison has to choose whether to force the economy open

Morrison relied on the power of persuasion alone in national cabinet on Friday and he gained a limited outcome: an aspiration among seven out of eight leaders to open their economies by Christmas, and an agreement to negotiate further on the hotspot definition.

Victorian Premier Daniel Andrews pushed back at the use of the hotspot rules to allow any federal intervention in state decisions, while Queensland Premier Annastacia Palaszczuk reluctantly agreed to a process of further talks.

While Morrison’s rhetoric was all about unity, the reality was all about disunity. Western Australia Premier Mark McGowan chose to go it alone. He will continue to meet with national cabinet, but has not signed up to its aspiration.

The outcome had a general agreement on a destination – open by Christmas – but did not have a hard, practical decision on how to get there.

Morrison made a pragmatic decision not to push too hard. Any move to force the states would be political madness. With premiers riding high in the polls with their popular border closures, Morrison could only lose by antagonising voters in Queensland or Western Australia or Victoria.

Morrison chose to abandon the consensus model of national cabinet. To insist upon consensus would have meant he was rolled.

This is not a breakdown in the federation. It is more like a balkanisation. Groups are forming within national cabinet to reach side deals, as seen with the agriculture code to allow farm workers to move across borders. While NSW, Victoria, the ACT, Northern Territory and South Australia signed up, others stayed out.

National deals have rarely been easy. The best way for prime ministers to succeed has been to offer cash. National cabinet will work the same way.

There is an imbalance at the heart of national cabinet and it is getting worse. The states impose border closures and social curbs while the federal government covers most of the economic cost.

Loading

The extension of JobKeeper until March, for instance, has given Palaszczuk an economic cushion to impose a populist border ban that hurts her own state’s tourism industry.

Will this change? As the October budget approaches, would Morrison consider more generous support for states and territories that open their economies?

After all, a budget stimulus that is meant to boost aggregate demand cannot do its job if households are locked down with nowhere to work and nowhere to spend.

The national economy is under real strain. Perhaps the only answer is to use money to force it open.

Sign up to our Coronavirus Update newsletter

Get our Coronavirus Update newsletter for the day’s crucial developments at a glance, the numbers you need to know and what our readers are saying. Sign up to The Sydney Morning Herald’s newsletter here and The Age’s here.

Most Viewed in Politics

Loading

About admin

Check Also

Sidelined Aus Post boss Christine Holgate urges supporters not to strike

“However, closing your Post Offices, will not only impact the service the members of your …