RICHARD WHITINGTON. Rudd’s GFC response versus Morrison’s to Covid-19

Inevitably, comparisons are already being invited: between Kevin Rudd’s 2008-09 response to the Global Financial Crisis and Scott Morrison’s to the 2020 Covid-19 pandemic.

Strategic wisdom, equity, efficiency, scale, impact? Effectiveness of communication, media response, political success?

In many respects, the two events are simply not analogous. In others, it’s too early to judge.

What we can observe, with top line perspectives, impressions and recollections, is this…

Rudd’s expenditure seems miniscule in comparison to Morrison’s, even allowing for inflation. The 2008-09 numbers were in the tens of billions. Now they’re in the hundreds. Yesterday’s announcement of a childcare subsidy took the total to nearly $200 billion. And Morrison isn’t finished spending, yet (nor do we really know the extent of tax revenues which will be lost in the downturn).

Most of the 2008 package was more direct and specific. One-off cash handouts to individual taxpayers (but no ongoing income support) and two major, focussed job creation programs: Building the Education Revolution and the Energy Efficient Homes Package (the so called “pink batts” home insulation scheme).

The current government’s measures have been far more extensive, in terms of ongoing income support – necessarily because the workplace impact of coronavirus has been so sudden, so extensive, and it’s likely duration so hard to predict. Significantly, much of the 2020 package has been directed at and through businesses (employers) including relief from, or suspension of tax obligations.

The principal criticisms of the Morrison response, so far, from an “optics” point of view, have related to it being, at times, confusing, contradictory, inconsistent, with decision-making “on the drip”. All of which might be forgotten over time. Of more substance, the difficulties with Centrelink’s inefficient processes and the controversial principles and risks associated with allowing superannuants to dip into their savings early, might not be forgiven.

The criticism of Rudd related more to implementation, as the programs were rolled out. The Education Revolution brought claims of overpricing and poor value for money. A subsequent task force enquiry upheld only three percent of complaints against the scheme. There’s no doubt that some of the mud stuck, however.

More seriously, the home insulation scheme was marred by the deaths of four young workers, house fires (from faulty installation) and possible fraud by contractors. The tabloids feasted on the spectre of shysters and con-artists ripping off a gullible government. After more than a million homes had been insulated, and some 10,000 jobs created, the scheme was shut down. The commonwealth department responsible for administering it was found to have been not up to the demands of the task. A later Royal Commission (arguably politically motivated), not concluded until 2014, kept the spotlight on the issue in general.

The pink batts scheme is probably the best remembered feature of Rudd’s recovery program, and derision of it, remains to this day in the playbook of the conservative side of politics.

But there was a much greater fall out in store. Facing an inevitable deficit in the 2009-10 budget, Rudd sought to minimise it by substantially increasing tax revenue from the mining and resources industry with the so-called Resources Super Profits Tax. Allied with Rudd’s attempts to introduce a Carbon Pollution Reduction Scheme, also opposed by the mining and energy sectors, his leadership stocks quickly waned during 2010.

Most of the media and all the lobbying produced a crescendo more intense that any seen in any election campaign environment. By June, the Labor Party was so rattled by it that, for the first time in Australian history, a first-term Prime Minister was deposed by his own party before facing an election. This despite, 30 months earlier, having achieved a swing of more than five per cent in its favour, the third largest at a federal election in nearly 60 years; and Rudd, himself, having enjoyed popularity poll ratings which remain records to this day.

No matter how much we admire Julia Gillard and her legacy, it’s hard to avoid pinpointing Rudd’s overthrow as the beginning of the end of trust in politics in Australia, and the rise in cynicism, especially about the Labor Party. The ALP is yet to fully recover. In a sense, Rudd was the GFC’s biggest casualty, notwithstanding history crediting his government with protecting the nation from recession in a way which made Australia the envy of the world.

In early 2009, Rudd said, of the GFC, and Australia’s response to it “that the great neo-liberal experiment of the past 30 years has failed”, and that “Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy. And, ironically, it now falls to social democracy to prevent liberal capitalism from cannibalising itself.” He called for a new era of “social capitalism” to “support a global financial system that properly balances private incentive with public responsibility”.

Similar sentiments are already rampant in response to the coronavirus. Quite fairly, people are chuckling at the sight of conservative governments rushing to embrace “socialism” as the only solution in straightened times. The push, for instance, for a universal basic income, has gathered momentum, along with a new perspective on the role of debt and deficits. Not to mention workplace flexibility! Commentators, and the Labor Party, are not premature in discussing these things.

And, first, in the wake of the bushfires, and now in response to coronavirus (e.g. who let the passengers off the Ruby Princess?), there’s a welcome new focus on the suitability and capacity of a federated structure to deal with national crises.

While all these issues remain fluid, as must assessments of how well or otherwise PM Morrison is faring politically, politics will change, with the long-term winners and losers difficult to predict at this stage. Who could have predicted, back in 2009, the nature of Rudd’s demise in 2010?

One of the Right’s chief articulators, Greg Sheridan, in The Australian, earlier this week suggested that conservatives would need to develop a radical and entirely new “narrative” to deal with the perceived reality of “big government” (including big spending and big deficits) having been the only solution available in responding to Covid 19’s impacts.

Richard Whitington was a member of Gough Whitlam’s staff from 1974 to 1977. After a subsequent career in advertising, corporate communications and executive recruitment, he retired in 2019 to do some freelance writing. Website: richardwhitington.com

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Richard Whitington was a member of Gough Whitlam's staff from 1974 to 1977. He'd been a journalist, briefly, and a political publicist, later spending 25 years in marketing and corporate communications, initially with the ALP's advertising agency in the late 70s and early 80s. He finished his career with 20 years in executive recruitment and retired in 2019 to do some freelance writing.

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