COVID-19 Mission Isn't Over Until The Economy Delivers For All

29 January 2021

Originally published by The Australian

On the first day of May 2003, barely six weeks after the Americans entered Iraq, George W Bush stood on the decks of an aircraft carrier, the USS Abraham Lincoln, dwarfed by an enormous banner that read “Mission Accomplished”.

On the first day of May 2003, barely six weeks after the Americans entered Iraq, George W Bush stood on the decks of an aircraft carrier, the USS Abraham Lincoln, dwarfed by an enormous banner that read “Mission Accomplished”.

History tells us the war in Iraq dragged on for some years afterwards, and many more lives were lost. Since then, Bush’s declaration became a cautionary tale for leaders tempted to declare victory prematurely.

Scott Morrison and Josh Frydenberg are now having a ‘mission accomplished’ moment of their own, but without the aircraft carrier. Their haste to declare victory over the recession of 2020, and its aftermath in 2021, ignores the fact that over two million Australians still don’t have work or enough work, wages are stagnant, and our economy had become less dynamic and resilient well before the pandemic.

It’s true that there are some encouraging and welcome signs of recovery. Some industries are recovering strongly particularly as state restrictions ease, and it was good to see a monthly increase in jobs in last week’s labour force figures.

But we can’t pretend there aren’t many families, workers, small businesses and communities still struggling, nor should we be satisfied with a recovery that strands too many Australians in joblessness, underemployment, insecure work or with wages that don’t keep up with the real costs of providing for loved ones.

An unemployment rate of 6.6 per cent is still unacceptably high, and nowhere near the level required to generate healthy growth in wages, particularly when we have the kind of rampant underemployment that sees nearly 1.2 million without enough work.

As Deloitte highlighted in a recent report, the recovery is likely to be defined by even weaker wages growth for those in a job, with growth in average earnings expected to plummet to one per cent next year and not expected return to two per cent before 2024-5.

Prospects for the economy in 2021 will partly rest on how at least six different uncertainties play out: subsequent COVID outbreaks and how they’re managed; the pace and efficacy of the vaccine rollout; developments overseas especially in major nations most impacted by the virus; our relationship with China; how and when Australians spend down what they’ve saved; and, finally, how the Government manages the withdrawal of existing economic support and what it does to replace that support when and where it’s still needed.

Naturally, this Prime Minister and this Treasurer will claim credit and influence where things go well in the economy and pretend that what goes badly is outside of their control. But in response to these uncertainties, we’re already seeing a failure of national leadership and lack of sound decisions based on what’s really happening in local economies and communities.

There is no national plan for the safe quarantining of incoming passengers, no strategic approach to China or industries impacted by trade restrictions, and a failure to listen to communities crying out for targeted support after JobKeeper ends in March, despite having no plan for jobs in its place.

Even the Government’s hiring credit scheme that the Treasurer claims will replace JobKeeper deliberately excludes almost a million unemployed workers aged over 35 and he was sprung exaggerating the likely jobs benefits by a factor of ten.

I was in Far North Queensland again last week and in places like Cairns it is abundantly clear that support for workers, small businesses and local industries should be tailored and targeted to those still doing it tough, whether they be tourism operators or hospitality workers, who rely on free-flowing international travel.

Amidst all this uncertainty that 2021 will bring, some things are clear: we won’t create good jobs and opportunities by cutting wages, cutting super and winding back consumer protections in the banking system – which is the sum total so far of the Government’s economic approach.

Returning to the busted economic policies of the recent past will be a recipe for more of the same wage stagnation, flatlining living standards, weak business investment and all of the other weakness that characterised the economy under the Liberals and Nationals before we’d even heard of Coronavirus.

This risks not having enough jobs and opportunities to show for their trillion dollars in debt; not having enough ambition or understanding to address longstanding economic problems; and too much wasted on advertising, rorts, and taxpayer-funded executive bonuses.

Instead, we need a plan for jobs that starts to tackle big national challenges at the same time, like the need to build a more diverse and innovative economy, invest in better education and care, deliver cheaper and cleaner energy and make Australia’s place in our region more secure.

This requires proposals for cheaper childcare; better energy infrastructure and policy certainty; revitalising manufacturing in the regions; more apprentices on public projects and other ideas already put forward by Anthony Albanese and the Labor team.

We can and should be ambitious about making the economy stronger after the pandemic than it was before, and ensuring it delivers for Australians in every corner of the country.

That’s what ‘mission accomplished’ really looks like.