Pearls and Irritations

What people in other forums are saying about public policy

The Australian economy

Have we passed peak recession?

On Monday, a day before Victoria announced Melbourne’s lockdown, Deloitte Access Economics released a tentative forecast for the Australian economy: Business Outlook: Fast crisis, slow recovery. It cautiously suggested that the recession “may well have already passed its worst”. But as in most recessions, unemployment will hang around for a long time, and conditions could still get worse in construction and some sectors dependent on discretionary spending.  It recommended that governments concentrate on keeping the virus at bay, and make an orderly transition from wage subsidies to “some new types of spending”, while “keeping JobSeeker stronger for longer”.

The Reserve Bank is guarded

At its regular meeting on monetary policy on Tuesday the Reserve Bank made no change to the official interest rate or to broad monetary policy. (Those who follow monetary policy will note that the overnight cash rate and the three-year bond rate are now both the same, at 0.25 per cent. This would be considered strange in normal times, but in terms of monetary policy times have not been “normal” for a couple of years.)

The Governor’s media release is sobering:

Notwithstanding the signs of a gradual improvement, the nature and speed of the economic recovery remains highly uncertain. Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious, and this is affecting consumption and investment plans. The pandemic is also prompting many firms to reconsider their business models. As some businesses rehire workers as demand returns, others are restructuring their operations.

Who is left holding debt?

Imagine Australians as a line of dominos linked together by debt. The renter is in debt to the landlord, who is in debt to the bank. The small business in trouble can get by with Jobkeeper for now, but its future is uncertain, and the business is already heavily in debt to the bank. Banks have deferred debt repayment for their most distressed customers, but these arrangements are only deferrals – in time borrowers will have to pay accumulated interest.

On the ABC’s Background Briefing Geoff Thompson interviews a number of experts, including Guy Debelle of the Reserve Bank and Nicki Huntley of Deloittes. They take us through a history of debt in Australia – how policy and cultural changes starting 40 years ago have allowed us to accumulate a huge level of household debt, leaving households and business, exposed to the shock of the pandemic, in a precarious position.  He also interviews Bill Mitchell of the University of Newcastle, who explains and advocates “Modern Monetary Theory” – a theory based on the notion that governments do not have to strive for any particular fiscal target such as a balanced budget, just so long as inflation does not break out. Debelle is in no rush to embrace MMT, but his response is warmer than one may expect. Meet the debt monster (34 minutes

How to make a weak economy even weaker

Matthew Lloyd-Cape of Per Capita has written in New Daily a guide to “the basic steps of pushing an already struggling economy into a full-blown crisis” – How to fuel an economic disaster: A beginner’s guide in 3 easy steps. Successive Coalition governments have been taking them all. The first step is to use tax incentives to drive a boom in housing speculation. That’s followed by creating uncertainty and inconstancies in social security policies, such as breaking a commitment on childcare support.  And the third is to deliberately widen inequality – starving public housing while subsidising the well-off to extend their existing dwellings is an effective move in this direction.

Housing

Per Capita’s parliamentary submission on homelessness

In February this year, before anyone was thinking about housing and homelessness in the context of Covid-19, the House of Representatives Standing Committee on Social Policy and Legal Affairs convened an inquiry into homelessness in Australia (which was temporarily delayed before re-convening). Per Capita’s submissionunderstandably calls for investment in public housing, but it also addresses homelessness in two broad contexts:

The first is poverty; homelessness, housing stress, rental arrears, and eviction all caused by financial stress and the lack of support available to those who find themselves unable to afford their housing. The second is unaffordable housing itself; the way in which Australia’s housing market is structured and organised to benefit relatively wealthy property owners and investors rather than to provide safe and secure housing for everyone who needs it.

The wonderful togetherness of public housing

Sometimes a situation becomes so serious that even the most irreverent satirists have to resort to direct language. The title of Clancy Overall’s piece Nation starting to think eastern-bloc style concrete flats not a good way to store poor people in the Betoota Advocate says it all.

The pandemic’s progress

Victoria

With an adequate amount of alarm and the occasional geographical confusion, the media have given the Melbourne outbreak a great deal of coverage, but they have not kept the public well-informed on basic data.

The graph below shows “community transmission” cases in Victoria and NSW in the four weeks to 10 July. These are all recorded cases, but excluding those who acquired the virus while in hotel isolation. Over that period NSW has had 18 cases of community transmission (including 5 in the ACT traced to people fleeing Victoria, breaking a two-month period of zero detected community transmission). In other states there have been no such cases recorded.

That means that until about a week ago, in at least six, and possibly seven, of our states and territories the virus had probably been practically eliminated.

Is this an opportunity to eliminate the virus from Australia?

Former Health Department head Stephen Duckett has put a strong and realistic case for a policy of elimination –  Australia should switch course and try for elimination – in the Sydney Morning Herald. He acknowledges the difficulties, and the short-term costs.

But the return on an elimination strategy is enormous. As Victoria heads back into lockdown, Western Australia – which hasn’t had a locally transmitted case since April – will remove all internal restrictions from next week. Movement within that state will be free. As long as testing remains routine and border restrictions remain firm, life will more or less return to normal.

Provided the Melbourne intervention works (six weeks equates roughly to three cycles of the virus), provided NSW and Victoria jump on the occasional outbreak outside Melbourne, and provided other states have learned from the Victorian failure how to handle hotel quarantine better, the country could be practically free of the virus by late August – an outcome that could be made more achievable by the Commonwealth’s proposal to restrict the number of international arrivals.

That’s a lot of “ifs”, and if any one fails we’re back to rolling lockdowns, border closures and restrictions until a vaccine is developed and distributed. But on the other hand elimination gives people something to aim for: it gives purpose to their inconvenience and sacrifices and would be more likely to ensure that people comply with restrictions.

Maybe there will be a significant outbreak in NSW: we won’t know for at least a week. Authorities seem to have been taken by surprise by the number of people who got out of Victoria. After all, it has been obvious to anyone who looks at the numbers that Victoria’s outbreak started two weeks ago. NSW Premier Gladys Berejiklian seems to be prepared to re-implement tough measures should the situation in NSW get out of hand.

Ironically, what could derail an elimination strategy would be the success of the Melbourne lockdown. If all goes well, after about four weeks we should see very few new cases. That’s when the Victorian Government would be confronted by a chorus of demands to “open up”. Were the government to yield to such demands we would be back to the dismal cycle of rolling shutdowns, as seems to be happening in European countries that yielded to such demands prematurely.

An interview with Innes Willox, CEO of the Australian Industry Group, on the ABC Breakfast program on Thursday did not inspire confidence that even experienced industry spokespeople appreciate the cost of easing restrictions too early. (9 minutes) On the same program a more realistic economic perspective was given by ACTU Secretary Sally McManus, who stressed the need for precariously-employed people who experience symptoms to have the security of financial support and a job to return to when they isolate themselves and wait for test results. Such security could protect against breakouts such as those at meatworks and other places with casually-employed workers. (10 minutes).

Although premiers seem to be aiming for elimination, Morrison has consistently stressed that government policy is simply for “suppression”. In April there was a clear difference between Morrison and the Health Minister, Greg Hunt, who was arguing for “practical elimination”. A policy of practical elimination accepts that the occasional case or small cluster will pop up, as has happened in New Zealand, but it does not accept the idea that we can live with some background of community transmission, as is implied by “suppression”. Elimination does not mean that life goes back to a pre-pandemic situation, but the burden on all is much lighter than in a situation of on-off restrictions, where people in their personal and business lives are never sure what lockdown or border closure awaits them in coming days.

By now Hunt seems to be repeating the Morrison line: on the ABC 730 Report on Thursday night he was uncharacteristically savage in his dismissal of Duckett’s advice: there seems to be some political process to which we are not privy driving Morrison to his opposition to elimination. In these situations it is a better bet to follow the advice of someone with Duckett’s experience than that of a politician.

If we are to eliminate the virus Victoria’s experience demonstrates that it’s crucial for governments to maintain capacity to move quickly to trace cases. Writing in Inside Story – A lesson in humility – the ANU’s Michael Bartos stresses the need to sustain such capacity in the public service. It should never again be necessary for governments to hire inadequately-trained security guards and for armed police to swoop on thousands of hapless public housing tenants.

The rest of the world

Most countries would love to have our problems.  The graph below presents the same representative countries as last week: we have to keep adjusting the Y axis to accommodate Brazil and the USA. But we can be comforted about the USA: that steeply-rising purple curve is just an illusion, as Vice-President Pence assures us.

Case numbers in the UK have come down to rates in mainland Europe. Within the EU there is an amount of variation: rates are still running high in Romania and Bulgaria while in western Europe rates are at more manageable levels (other than in Sweden, a country that that has taken a laissez faire approach to the virus).

UK – an excuse to privatise the NHS

Writing in the New York Review of Books, Rachel Shabi describes how the UK has done so badly in handling the pandemic: The pro-privatization shock therapy of the UK’s Covid response.  As the graph above shows, Britain’s infection rate may be coming down to the level of other European countries, but the path has been unnecessarily expensive, both in human lives and in economic performance. (The UK’s death rate from Covid-19, at 670 per million, is the highest in Europe and probably the highest in the world). Shabi provides an account of maladministration: “Johnson’s inexperienced cabinet, selected for fealty to Brexit over anything else, has proved inept and out of its depth”.  Her main message is about how the government was gripped by an obsession with privatisation of health services, bypassing capacity and expertise in the NHS, while private contractors, with few skills or experience in tracing and testing, made a ghastly and expensive mess of the job.

Information sources

We now have these on a separate website.  This week we have added a site developed by the consumer association Choice – Covid-19 coronavirus. It has links to articles specifically relating to consumer interests, such as refunds for cancelled events or trips and renters’ rights.

Eden-Monaro by-election

What happened to the Greens?

A political analyst seeking a stratified sample to analyse Australian trends could no better than to dissect the results from Eden-Monaro, because it has the lot – Canberra’s urban overflow in Yass and Queanbeyan, a string of coastal communities, a big region of hardscrabble farming on unforgiving land, and a seasonal tourism industry in the snowfields.  The Australian Electoral Commission has enough polling-place data to keep any obsessive analyst employed until the next general election.

It’s easier however to consult Antony Green’s summary on the ABC website. He also has a 90 second summary on The Insiders. The Liberal and Labor candidates, both from coastal regions, did well in their own regions, but otherwise there were no clear regional patterns that Green could pick up.

We have taken another perspective, using a “Right/Left/Other” framework, shown in the table below:

Some may dispute our classifications, but even significant reclassifications of smaller contestants do not negate four general, if somewhat tentative, findings.

First, those outside the main parties (“others”) enjoyed a big swing, even though there was no high profile independent candidate.

Second, the Green vote was miserable. They lost a third of their vote at a time when it’s becoming increasingly evident that zoonotic viruses result from human encroachment on wildlife habitats, when our government has neglected climate change, when they are contesting an electorate most starkly affected by climate change (severe bushfires and a receding snow line), when many large corporations are taking climate change seriously, and when, in mainland Europe (most recently in France), green parties have been going from strength to strength.

Third, many voters had the audacity to make up their own mind on allocating preferences rather than to sheepishly follow how-to-vote cards. William Bowe reports that SFF preferences have been splitting about 50-50 Liberal-Labor, and that National preferences have been splitting about 80-20.  These flows should help kill any residual assumption that country people have a hard-wired attachment to the Coalition.

And fourth, Morrison’s high personal approval rating doesn’t seem to translate into votes for his party.

What happened to the National Party?

Tim Colebatch has provided a comprehensive analysis of the way changed preference flows from minor parties delivered the seat to Labor: Labor’s preferential treatment on Inside Story. He also speculates (plausibly) on the role played by the National Party’s John Barilaro, NSW Deputy Premier, and state member for Monaro (essentially the non-coastal part of the federal electorate). Does a Labor victory actually help Barilaro realise his political ambitions, and do those ambitions include a senior role in federal politics?

Public ideas

The moral bind of political tribalism

Is there a political home for someone who believes strongly that it is wrong to discriminate against people on the basis of their sexual preference and who believes at the same time that assisted dying should be discouraged? Or for one who wants to see markets liberalised, while also seeking much more public expenditure on health and education?

On the ABC Religion and Ethics Report Andrew West discusses with British philosopher James Mumford the problem of “political bundling”. That is the idea that one must sign up to a package of “left” or “right” beliefs. Such bundling is an unnecessary socially-imposed restraint on serious consideration of complex moral issues. Ethics beyond political tribes (24 minutes)

Mumford’s most recent publication carries the same title Vexed: Ethics beyond political tribes.  Andrew West also refers to Stan Grant’s recent article George Floyd protests show America is a nation at war with itself — and Donald Trump didn’t start the fighting.

The forces of illiberalism are gaining strength throughout the world

That’s a quote from an open letter A letter on justice and open debate published by Harper’s and signed by 150 high-profile people, including Margaret Atwood, David Brooks, Noam Chomsky, Francis Fukuyama, Malcolm Gladwell, Jonathan Haidt, Michael Ignatieff, Garry Kasparov, Steven Pinker, Jonathan Rauch, J.K. Rowling and Fareed Zakaria.

The letter warns that legitimate calls for racial and social justice, and for reform of institutions, have “intensified a new set of moral attitudes and political commitments that tend to weaken our norms of open debate and toleration of differences in favor of ideological conformity”. They go on to warn that:

The restriction of debate, whether by a repressive government or an intolerant society, invariably hurts those who lack power and makes everyone less capable of democratic participation. The way to defeat bad ideas is by exposure, argument, and persuasion, not by trying to silence or wish them away.

Polls and surveys

Australia’s pollsters have fallen silent this week. Perhaps the Eden-Monaro by-election was  too much for them.

For those who cannot get through a poll-free week, the Pew Research Center has published a poll on the views of US “millennials” (now aged 25 – 40) towards foreign countries and global institutions. In general, millennials hold more positive attitudes to foreign countries and institutions than older Americans do, but along with older Americans their affection for Russia and China has been falling over the last few years. But contrary to the views held by their president, Americans of all ages have a favourable view of the UN.

Chinese mischief

Chinese-Indian clashes

Last month’s clashes between Chinese and Indian troops along the countries’ contested border may appear at first sight to be a large-scale bar room brawl, with fatal consequences for those involved, but these were no localised incidents. They occurred at several widely-separated places (near the western and eastern ends of the 3 488 km border) “and look like they were directed from Beijing” writes Ramesh Thakur on the Toda Peace Institute’s site: Bad Moon Rising Over the Himalayas: Nuclear-armed China and India Fight with Stones and Clubs. Ramesh explains the “what”, the “where”  and the “why” – how the “why” links to China’s specific geographic interests for physical access to Tibet and Pakistan, and how these actions relate to China’s wider foreign policies.

You need contoured or relief maps to follow the conflict: it’s geographically complex. The ABC Digital Story Innovation Team has a superb inforgraphic about the border region and the disputes, concentrating on the Aksai Chin plateau.

A more detailed account of the conflict on the western stretch of the border (in the disputed Aksai Chin region where both India and China have been constructing roads and airfields), is provided by Yun Sun of the Stimson Center: China’s strategic assessment of the Ladakh clash published on the War on the Rocks site. Yun Sun is disinclined to see the conflict in terms of a grand plan directed from Beijing – China’s concerns right now are more to do with Hong Kong and Taiwan – but bogging India down in a conflict is no bad thing for China, and there is no prospect for any clear definition of the border (the Line of Actual Control) any time soon. Clashes will continue to flare up.

Hong Kong – and Taiwan

Most attention to China’s intervention in Hong Kong so far has focussed on a description of events – such as Keith Richburg’s informative article The Hong Kong we know is dead in The Strategist.

A contribution that considers the broader political context is by Michael Green and Evan Medeiros of Georgetown University. They see China’s imposition of harsh national security laws in Hong Kong in terms of a policy of “creeping irredentism” – Is Taiwan the Next Hong Kong? in Foreign Affairs. In considering its policy towards Taiwan, China will be looking carefully at how the US and other countries have reacted to its Hong Kong intervention. Their article could be read as a hawkish call for the US to exert a stronger military role in Asia, pulling in allies such as Australia, but they’re mainly calling the US to exercise more skilled diplomacy in its relationship with China:

Many U.S. allies now worry about joining U.S.-led coalitions to counter China, because they fear being pulled into a competitive spiral between Washington and Beijing that has no bottom. Resuming a strategic dialogue with China would signal that the United States is interested in arresting that spiral.

Australian politics

Emerging from Covid-19 to secure Australia’s place in the world

The Lowy Institute has compiled 12 short policy briefs, each one written by one of its policy experts: Emerging from COVID, securing Australia’s Future: Policy Responses to the Pandemic. Two briefs are about a more considered approach to China, some are about our policies in Southeast Asia and the Pacific, and others are about our role in global institutions. This last category includes Stephen Grenville’s brief on “Curing the G20’s irrelevance” and a brief by Hervé Lemahieu and Alyssa Leng on “Forming a coalition of competent middle powers to lead on global health problems”.

The long arm of secrecy – Timor Leste

Writing in the Guardian, as part of its “Transparency Project”, Helen Davidson and Christopher Knaus report that the Administrative Appeals Tribunal has upheld the Australian government’s refusal to release documentson Indonesia’s occupation of Timor Leste 45 years ago. We might recall that Australia was the only western nation to recognise Indonesia’s sovereignty over Timor-Leste. Davidson and Knaus point to the connections between the secrecy of these documents and the secrecy of the Commonwealth’s prosecution of Bernard Collaery for exposing Australia’s bugging of Timor-Leste’s government during negotiations over oil and gas reserves in the Timor Sea.

Stuff to read if you live in Melbourne

On Saturday Extra last weekend Geraldine and her guests, on the regular “The Pick” segment,  listed a number of sources of reading, listening and watching. Those for which we have been able to find hyperlinks are:

Minor Feelings: An Asian American Reckoning by Cathy Park Huong;

New Despotism by John Keane (we had a link to a Late Night Live session on this work last month);

Superpower: Australia’s Low-Carbon Opportunity by Ross Garnaut;

Sapiens: A Brief History of Humankind by Yuval Noah Harari;

The bellingcat podcast (this week with two articles on Russia and its interferences);

Thirteen minutes to the Moon podcasts (A BBC series about NASA’s moon missions);

Sydney Southeast Asian Centre podcasts from the Sydney Southeast Asia Centre, University of Sydney;

The Clinton Affair on SBS (M rated, suitable only for older visitors to the Pearls and Irritations site).

Where lies Trump’s support?

Trump’s support is slipping among American voters, and when people in other countries are surveyed he is even more unloved. But he still has some strong pockets of support abroad.

Watch out tomorrow, Sunday, for Peter Sainsbury’s Sunday environment round up.

Share and Enjoy !

SHARE TWEET SHARE COPY EMAIL PRINT