Three different views on post-COVID recovery

Two reports on social and economic options for post-COVID-19 recovery, one from the Grattan Institute and one from Phil Ruthven, have recently been published. We can assume there is a third, not yet public: a snap back and marketing plan lurking in the Prime Minister’s mind.

But the two which are already public largely focus on different priorities, except in some places in the Ruthven case, from any Morrison plan of returning to the policies which have given Australia a decade of slow growth, record debt levels even before COVID-19 and wage stagnation.

The Grattan Institute has put forward the most extensive plan, and the most convincing of the three, in its most recent report: The Recovery Book: what Australian governments should do now.

The book, in summary, recommends that the Federal Government inject $70 to $80 billion in extra economic stimulus including increasing and extending Job Keeper. It also includes proposals for federal and state governments in the areas of hospitals and health care, schools and universities, roads and trains, budgets and energy.

It urges the need to “prioritise ruthlessly” and defer long-term reforms such as tax, industrial relations and skills policy. Grattan subtly says of the long-term ones, “assuming they’re desirable” suggesting obviously that not only are some of them undesirable but also able to be set aside while governments “tackle a huge agenda of urgent policies over the next six months”.

It also recommends spending on social housing and small shovel ready maintenance and infrastructure projects rather than large projects where the benefits are in doubt – all with “the goal of getting hundreds and thousands of Australians back to work and dragging unemployment down to about 5% by the middle of 2022.”

“JobKeeper should be expanded to include university staff, casual workers and temporary migrants and extended beyond September for businesses that are still in strife”, Grattan says. This would end an anomaly driven by Coalition ideology and prejudice rather than sound policy.

“The permanent rate of JobSeeker should be increased by at least $100 a week and the Commonwealth Rent Assistance should be increased by 40%. The Child Care Subsidy should be raised to 95 per cent of costs for low-income households, to cushion the shock to family budgets as parents start paying for childcare again, and to reduce financial barriers for parents taking on more paid work,” they also say.

Other proposals include a major overhaul of road policies and a major rethink of major project priorities; expanding telehealth; and, funding a $1 billion six month tutoring blitz to help a million disadvantaged students to recover learning lost during lockdowns.

There is a useful one page summary of recommendations in the book under the headings controlling COVID-19; fiscal and monetary policy; business; supporting workers; infrastructure; industry; health; education and institutions.

Some things the Morrison Government probably won’t like in the summary are: avoiding bailouts and enforcing competition laws; ignoring any near-term focus on budget consolidation; avoiding industry assistance; establishing clear criteria for supporting projects: and, ignoring calls for infrastructure spending inconsistent with a low-emissions future.

The Government will, no doubt, also be reluctant to embrace the recommendation for the “rapid return of rigorous scrutiny and oversight of government spending and decisions after parliaments were suspended” and the establishment of the promised national integrity commission.

One can expect the Murdoch media and Morrison to dismiss Grattan as ‘left wing’ even though its track record shows that it is now probably the predominant social and economic think tank in Australia.

A well-known economic commentator, Phil Ruthven of the Ruthven Institute, has prepared a report Government Reform Challenges with some ideas and recommendations it is hard to disagree with plus some which resemble the standard neo-liberal talking points.

The report starts off with a run-down on what a well-run nation needs. Nobody except religious groups will object to a cohesive secular society (free from all discrimination). Most of the rest of the needs will have most of us nodding agreement: a mostly happy and caring society with welfare for the needy; safety; a healthy well-educated and increasingly cultured population; a proud, unique and fun loving nation (free of jingoism); full employment, rising standard of living; low inflation; fair interest rates for depositors and borrowers alike; productivity growth.

Morrison might be worried about the culture stuff though unless the components can say they employ some tradies.

On the other hand balanced government budgets with low national debt may be an excellent aspiration but the rub is in how we get there. Democratic government is a given but Ruthven’s question mark over compulsory voting is a big ask as is Ruthven’s proposal, quoting Keating on ‘unrepresentative swill’ for support, to get rid of the Senate’s veto power.

With tax he wants individual taxes reduced by 5%; corporate tax lowered from 30% to 25% (which won’t make much difference to the third who pay none); and, abolition of payroll taxes and stamp duties. In 1977 Whitlam promised payroll tax abolition but that didn’t go down well and replacing stamp duty is attractive but the States would want something to replace it.

When it comes to what Ruthven describes as ‘Worker Freedom in the 21st century’ the realities of the workplace and economic structure make some of his aspirations in the area contradictory.

His first aspiration is no ‘bondage’ by businesses, bosses or unions…replaced by opportunity and empowerment. He argues for more casual work; the demise of the concept of ‘employee’ and its replacement by contractual relations; and, the suggestion of more workers owning a business (presumably as contractors to another one).

No-one can argue with his urging of a knowledge worker concept; lifetime education and training; rising wages and salaries; more working seasons in a life; and, no discrimination on any basis for instance gender, race, age, religion. Payment for outputs not inputs (hours of work), however, sounds like a recipe for reintroducing piece work.

So what about our assumed third option – the Morrison one? Does ‘snap back’ mean more of the same? Do his political beliefs match his faith in Biblical inerrancy? Bookies won’t be taking bets on either.

Meanwhile, the Recovery book is a swansong for Grattan Institute founding CEO, John Daley, who will be succeeded by Danielle Wood, one of the co-authors of The Recovery Book and who and has been Grattan’s Budget Policy and Institutional Reform Program Director.

As political parties and governments give up on meaningful policy development, and prefer to devote themselves to tactical games and name-calling, Daley and his team have demonstrated that Grattan and other think tanks can fill the gap the parties have created. We just need the parties to start paying some heed.

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Noel Turnbull is a blogger who has had a 40-year-plus career in public relations, politics, journalism and academia.

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