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A way forward to COVID-19 economic recovery

  • 05 May 2020
When a global pandemic cast a mighty shadow across Australia, the Prime Minister, premiers and chief ministers rightly recognised that their duty was to prioritise the health and safety of their people.

But as some of the health concerns ease and our national, state and territory leaders begin to turn their minds to easing isolation measures, the focus will soon shift to the challenges of our economic recovery.

The recently released report from the Grattan Institute on unemployment in a post-pandemic Australia makes for sobering reading — especially for those in the eye of storm who have already lost their jobs.

Much of the heavy lifting in terms of formulating policy for Australia’s economic recovery will fall to the Morrison government. The path it takes will either make or break their political fortunes.

The government’s success in managing the COVID-19 pandemic in Australia was, in part, due to strong collective leadership, a focus on the common good and the abandonment of ideology or at least curtailing it. Prime Minister Morrison could do well to continue down this path as he prepares the government’s work on Australia’s economic recovery.

To date, most of the Morrison government’s economic packages could best be described as ‘economic welfare’. They are measures designed to limit the impact on the economy of the COVID-19 pandemic. The recovery phase will very much need to be about stimulating the Australian economy.

'The parameters for reform cannot simply be traditional economic ones. Instead, they must include consideration of the common good, so to ensure that the path forward doesn’t simply continue to perpetuate a society of haves and have nots.'

The business community is already lobbying for company tax cuts and rumours abound that ‘other revenue measures’ needed to provide government revenue should include an increase to the rate or a broadening of the GST. These are legitimate policy options for debate, but they must be considered in the context of a broader economic plan.

That plan cannot simply be one where Australia strives to ‘snap back’ to what we had before the pandemic: a time of insecure employment, high rates of underutilised labour, low wage and economic growth. Going back to what we had before the pandemic should not be the goal; we deserve much better than that.

The government will need to resist its conservative urges to do a rerun of its 2014 Budget play book of debt and deficit reduction. Austerity measures harmed many economies