New numbers this month confirmed what most Australians knew — Australia has entered a recession and, with that, our remarkable run of three decades of uninterrupted growth has ended. This unparalleled period of continuous growth, which was set up by Labor and defended by Labor when it was last most at risk, has ended under the Liberals.
We won’t know how bad the recession will be but there is near unanimity among economists that the June quarter will be significantly worse than the March quarter, and that the numbers will be sobering and daunting. Millions of Australians who were struggling before the fires and before the virus are now at risk of being left out and left behind. Hundreds of thousands of jobs have already been sacrificed to the first recession in 29 years, and the recovery will be patchy and slow.
The Parliamentary Budget Office has forecast the budget will not recover for a decade.
But, while the pandemic came without warning, longstanding weakness in the economy did not. As we saw in the national accounts, the pandemic has accelerated many of the economic challenges we already had, including weak growth, sluggish consumption, declining business and dwelling investment, and stagnant wages.
Even before the virus outbreak, net debt had more than doubled under the Liberals, and household debt and underemployment had reached record highs.
The crisis has entrenched existing inequalities including in relation to insecure workers, younger and older workers, and also women who have taken on an enormous share of the professional and household caring responsibilities during this difficult time.
Hundreds of thousands more Australians are out of work and most economists expect unemployment to remain higher for longer. The challenge now is to get as many people as possible back to work, particularly for vulnerable Australians who have been hardest hit, while ensuring we have a plan for a strong recovery that sets Australia up for the future.
These are big challenges. Australia can meet them.
But doing that requires an honest conversation about the state of the Australian economy, understanding the causes of its underlying economic problems and putting forward a plan for a better future that takes these problems into account. Midway through his press conference, and only in response to questions by journalists, the Treasurer admitted the government had again delayed its major economic update, having already deferred the budget earlier in the year.
This decision to keep Australians in the dark about the state of the economy is a disgrace.
Throughout this crisis, key economic institutions, including the Reserve Bank, have continued to issue economic forecasts and updates. The Reserve Bank governor recently said that at a time of uncertainty this transparency was in the public interest to support confidence and promote an informed public conversation about the downturn and recovery.
Australian workers, businesses and communities need and deserve the Morrison government to level with them to address the understandable anxiety in the community about this recession.
This is not just about numbers on a spreadsheet. This is about people’s jobs; it’s about their capacity to provide for the people they love; it’s about all of the uncertainty people will face in this recession in the coming months and in the coming years.
In these serious times, the same kinds of slogans and slick marketing from Scott Morrison and Josh Frydenberg just won’t cut it.
We all need the Prime Minister and Treasurer to do a much better job managing the response to this crisis and its aftermath than they did of managing the economy in the recent years before that.
Australians can’t afford any more of the serial incompetence from the Morrison government, which led to the JobKeeper shambles, the robodebt debacle, delays in bushfire relief, sports rorts and early access to super fraud.
We need a government ready to set Australia up for a brighter future; one focused on putting the foundations down for another long run of growth built on cheaper and cleaner renewable energy; on the skills, ingenuity and wellbeing of our people; and on the development of new industries and technologies without abandoning our traditional strengths.
In short, a positive, modern plan for the recovery and the future that leaves no Australian stranded or left behind.
Australia can avoid longer than necessary unemployment queues and prevent further economic weakness, but it will require real leadership and vision from those at the top — and right now the Liberals and Nationals are leaving the country wanting for both.
This opinion piece was originally published in The Australian on Wednesday, 10 June 2020.