Andrew Leigh

POLICY MAKING NEEDS TO CHANGE POST-COVID

The Canberra Times, 15 July 2020

If a policymaker doesn’t think differently after coronavirus, they’re probably not thinking at all. Would any conservative now dare to quote Ronald Reagan’s claim that ‘government is the problem’, or Margaret Thatcher’s suggestion that ‘there is no such thing as society’? Imagine the outcry if Scott Morrison was to present the budget proposals he supported in 2014, including a Medicare co-payment, reduced CSIRO funding, cutting pension indexation, and abolishing unemployment benefits for under-25s.

The same is true for progressives. After World War II, Labor didn’t yearn for a return to the 1930s. Instead, Curtin and Chifley made the case for full employment, and democratising home ownership.

What’s the equivalent today? In health care, we’ve seen the benefits of a universal system over that of the United States, which spends nearly twice as large a share of GDP on health, yet provides patchier care. Coming out of the crisis, there will be a strong demand for telehealth, particularly in regional Australia. Preventive health will become a greater priority. The vulnerability of nursing homes has given new urgency to calls for serious reform in the way we manage aged care.

Science, too, has been on the up. Medical researchers have been teaching us their lingo, with terms such as ‘R0’, ‘flattening the curve’, ‘incubation period’ and ‘self-isolation’ making the transition from hospital seminars to suburban dinner tables. Everyone is now acutely aware that the lack of an effective treatment or vaccine is the biggest handbrake on the economy – and the only people who can find a cure are scientists.

It’s not only medical scientists whose work should be taken more seriously. For years, climate scientists have been sidelined by Australian conservatives, who have sowed climate scepticism and denial. COVID-19 ought to provide a reset. As the Amazon recommendation engine might put it, ‘if you like medical science, you’ll love climate science’. Australia is the advanced country most at risk from climate change. Yet the federal government has sidelined the science, failed to implement the necessary emissions cuts, and dragged the chain in global negotiations. This needs to change.

In the workforce, every employee likes to think they are an ‘essential worker’. But when coronavirus hit, it suddenly became evident who were the real essential employees. Australians united to cheer our nurses, garbos, posties, police, teachers, supermarket workers, frontline public servants and cleaners. The ‘Good Beer Always Helps’ delivered packs of craft beer to more than 10,000 essential workers. Yet it was also a reminder that what we pay essential workers is often a poor reflection of their true worth to society. Cheers and beers are beaut, but they don’t pay the rent. And knowing what we do now about infectious diseases, do we really want cafes and restaurants staffed by people without sick leave?

When the pandemic hit, it was charities that were called upon to provide food relief, mental health support, disability work, family violence support and much more. Harnessing this civic energy is a task that echoes the work of the post-war decades, in which returning soldiers and their families helped found many of the important civic organisations that still serve the community today.

Egalitarianism is a fundamental Australian value, but the challenges and solutions are new. Months of home schooling has widened the educational divide between children from rich and poor families. Job losses are being felt most keenly among traditionally disadvantaged workers. Indigenous Australians, people with disabilities, those without post-school qualifications and younger Australians will all be hit hardest in the downturn. And, as always, assets provide a buffer against unexpected shocks. While affluent Australians can ride the sharemarket rollercoaster, more than a million people with insufficient assets have pulled money out of superannuation. Inequality in retirement savings just got larger. The case for increasing the minimum superannuation contribution rate just got stronger.

Some commentators have argued that COVID-19 proves that the project of fighting inequality is dead – or at least that it needs to quietly sit in the corner. Growth, the argument goes, is all that counts now. But this misses the fact that economic growth only raises wellbeing if it flows through to low-income and middle-income households. If the bulk of the economic gains are captured by those at the top, national averages will exaggerate the benefits of growth to the typical family.

This isn’t a theoretical argument. Take the total wealth of the twenty richest Australians. It tripled from 1990 to 2000, doubled from 2000 to 2010, and then tripled from 2010 to 2020. In just one year – from 2019 to 2020 – the wealth of the top twenty Australian billionaires surged by 32 percent. All this at a time when wage growth is stagnant, home ownership is at its lowest level in half a century, and real household incomes have barely budged since 2013. There’s a reason it’s called ‘trickle-down economics’, not ‘flow-down economics’. A post-COVID society should aspire to be more connected, and more equal.

This is an edited extract from a forthcoming Evatt Foundation publication.

Authorised by Paul Erickson, ALP, Canberra.