EVA COX. Treating people as customers rather than citizens.

Apr 10, 2020

Will the current expensive policy shifts rebuild voters’ trust of those they elect?

Let’s face it, societies generally have not been functioning very effectively over the past few decades. Obvious in most developed democracies is the growing trust deficit, which is clear from the rise in populist groups, the rapid turnovers of leaders, and the election of ‘strong men’ who are undermining democratic processes. In many countries there is also the return of extreme nationalisms and other indicators of the loss of faith in traditional liberal and social democratic processes and parties. Australia shares many of these indicators, deriving from similar trust deficits.

Much of this can be sheeted home to failures of the market-based paradigm shift that has happened in the last decades. This has undermined social spending by cutting government tax in non -economic areas, and has put too much power in the hands of global corporates. The arrival of the Global Financial Crisis, now more than a decade past, exacerbated resentment by voters, who felt promises of trickle-down wealth had failed. This undermined democratic legitimacy, and created discontent, as the remains of the international post WW2 welfare state disappeared.

The 21st century has seen increased international tensions as well as national ones, and the arrival of the Covid 19 pandemic has set up major crises in already fragile nations. Despite this there have been interesting attempts by various national governments to cope with the range of problems of infection, prevention and treatment. Australia, despite its island status that should have given some protection, required both government controls and forms of social interventions to limit the infection rates and treat the patients.

Policies that require big government spending and control of social movement require a number of things: popular acceptance of authority; major behaviour changes; involvement by health and welfare professionals; quarantining people; and reducing population movements by home-stay behaviours. The policing and obedience of such rules require both good will and responsible behaviour. To give the Federal government its due, initial moves that called for co-operation were well delivered. Fear of infection legitimated these and countered the usual emphasis of dominant market models and people’s wellbeing objectives took over from profit-making priorities.

However, the problems that arose from massive closures of workplaces required some serious policy responses, and here the government moved well outside its usual low spend, leave-it-to-the-market models. Instead it introduced very expensive spending programs to remedy the effects on both incomes and businesses. The first spending tranche of $160B-plus was a major expenditure, replacing the income of ‘displaced’ workers so they could be retained or at least stay officially on the books. Those who had lost jobs or been suspended by employers were to be covered by a payment of $1500 per fortnight, not to be related to current pay. The Job Keeper payment was really not targeted to worker needs per se and avoids them being counted as unemployed, even if they’re not actually working. This reduces the numbers of unemployed that would produce bad economic data in the six month period this payment was initially designed for.

The other big payment of billions is the Job Seeker payment of $1100 per fortnight, which involved doubling the current inadequate Newstart payment, long the subject of a widely supported campaign to raise it. Paying them $400 less than Job Keeper signals how the government feels about these people, that they are somehow less deserving. Both payments will be legislated as temporary and will terminate legally in six months. While both categories will benefit from more income over the next few months, the unemployed will revert to inadequacy. There are also millions potentially excluded for the payments.

In both cases the current good poll results for the Coalition and the PM from these seemingly generous payments, is likely to recede, as arguments about who is excluded and why there are differences blur goodwill. Similarly, short-term access to such payments will set up other concerns when people lose income they still need in six months. The major gains will be for government spending to support mainly businesses, and a benefit from lower unemployment statistics.

The same critiques of using payments to support short-term needs, particularly of businesses, can be used for the Government’s announcement last week of free childcare. A major $1.5B spend in funding for children’s services has been introduced to stop potential closures of many services, whose businesses have by parents withdrawing their children as damaged as they now work from home, have lost their jobs or are worried about transmission of the virus. The new funding model temporarily replaces former versions, as the new payments are claimed to cover costs so services will offer free child care. However, many centres will be ineligible for the second part of the deal, which assumes all centres will be able to use the above Job Keeper pay to subsidise staff payments.

The announcement was very well covered by the media. It seemed a very generous and it is a surprisingly radical change (long on feminist agendas) from a conservative government. However, the change is again short term, and has already shown major flaws, e.g local council services are not covered, nor are universities. More problematic is that these changes are again only for a limited time then, like Job Keeper and Job Seeker, the new funding will go and the services revert to the current funding model. As these models are not well targeted, with fees too high and the locations of many services not where children are, the area of children’s services needs a major overhaul.

Because all these changes signal clearly their temporary nature, a brief treat to catch some good publicity and cover some evident problems, they are not likely to garner trust in those promoting them. Free care sounds good as does extra pay but the future is a return to very flawed funding models with all the same problems, probably exacerbated by the effects of the pandemic long term.

These two changes are the presumed core of the Government strategy and indications are Ministers are very pleased with their reception. Newspoll this week showed a rise in approval for the PM versus Albo. However, the two party vote was too close to call as it is in margin of error.

Although these attempts to ameliorate the effects of the virus on households and the economy are popular, there are few signs that those elected have understood the real problem – that distrust comes from voters feeling they are not being treated as citizens but customers to be bribed briefly. These costly examples would seem to reinforce the distrust as the main gainers are again businesses and the budget.

Eva Cox is a feminist social policy expert and commentator

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