Greg Sheridan should stick to foreign affairs. His latest political and economic musings in The Australian yesterday include:
“The government’s massive fiscal intervention in the Australian economy, entirely justified by the gravity of the COVID-19 crisis, will change centre-right politics in this country forever.
You cannot make the need for small government, free markets and less state intervention your chief political narrative if you have just used government on a scale never before imagined to rescue the nation from a desperate health emergency.“
Sheridan is wrong. You cannot change what you do not have. What political party in Australia is centre-right? The Coalition is a high tax, big spend, interventionist centre-left political party which in power has allowed the footprint of government to grow to suffocating levels. The disaster that is our National Energy Market and its plethora of regulators being just one example of Coalition central planning par excellence.
That Australia finds itself scrambling to deal with an entirely predictable pandemic (read Professor Edward Holmes and Dr Michelle Baker warnings to government here) with a shortage of hospital and ICU beds, ventilators and other medical equipment and supplies, not to mention a possible vaccine or treatment, is because successive governments in Australia, state and federal, Labor and Liberal, have preferred centre-left social justice, grievance politics and climate change spending wasting hundreds of billions of dollars on waste, propaganda and Orwellian social engineering programs. The lockdown is in no small part a function of governments prioritising policy frivolity and political power above vital national interests.
The biggest danger coming out of the COVID-19 crisis is precisely the fact that the Morrison Government is centre-left and not centre right as Sheridan claims and consequently will have no appetite for smaller government as a necessary response, but instead will be motivated for greater control and government intervention across society and the economy starting with a bevy of “shovel ready”, infrastructure boondoggles that will only add to the colossal debt racked up so far. Many will doubtless be climate related.
I hope that I am wrong because the only way for the Morrison Government to try and breathe life into the economy they have shattered is for it to largely get out of the way – slash taxes, slash government spending, slash regulation, slash workplace complexity, and in the process slash the number of overpaid bureaucrats sucking the country dry (in terms of numbers, bloated salaries and third rate advice).
They could start by scrapping government climate related intervention in the national energy market, not to mention the myriad of Green tape that cruel Australian business and jobs at the best of times but in the current environment of mass unemployment and business bankruptcy is now downright immoral. In doing that they should also take aim at the states whose obstruction of gas projects is even more treacherous in the current situation. We need every dollar and every job at the end of this.
They should also overhaul the GST. The GST was meant to give the states a reliable (and untied) revenue stream so they could provide adequately for essential services such as running hospitals and preparing for a pandemic. Yet as this crisis demonstrates none of the states were remotely prepared for a COVID-19 scenario. The Andrews Government is reported as procuring 4,000 ventilators which is almost ten times the current Victorian total. That suggests not a defensible shortfall to exceptional circumstances but gross negligence in the first place.
A big part of the problem is a design flaw pertaining to HFE which has led to a redistributive race to the bottom encouraging states to pursue crude political objectives at the expense of building the economy and jobs (e.g. Adani, gas moratoriums). This and the problem of VFI has allowed state governments to deflect spending on essential services (think ventilators) and instead waste billions on solar panel subsidies and transgender theory in primary schools.
Hand in hand with reforming the GST should be a solution to VFI and together a return to competitive federalism starting with a strong application of the principle of federal-state subsidiarity. I’m not interested in the groupthink of a National Cabinet and its consensus styled spin (i.e. mitigation of accountability). I want genuine leadership at all levels of government. That is an integral part of democratic accountability (checks and balances) the framers of our constitution had in mind when they created Australia as a federation.
In the current crisis, had the states largely determine their own COVID-19 strategies we might have been able to assess the merits of say the Swedish model of isolating only those most at risk and most likely to require hospitalisations in one state, and compared that outcome against a full lockdown in another state, and whatever variations in between across the other states. This could have enabled Australia to make an evidenced based approach minimising costs and maximising benefits. If the Swedish model succeeded in one state, other states could have quickly ended damaging lockdowns. The national approach that has been adopted simply robs Australia of important debate about competing strategies and policies. Worse still, being a one size fits all approach it doesn’t allow for different circumstances. Should the Tasmanian strategy be the same as New South Wales? Is Darwin different to Melbourne?
Our current political system is broken in no small part because of the duplication and overlap that has been building over decades as Canberra has continuously sought to centralise and consolidate power riding roughshod over state responsibilities. While this has been a boon to bureaucrats attending COAG meetings it has done nothing for political accountability, good government, fiscal prudence, competitive federalism, or policy efficacy.
Contrary to Sheridan’s view most of Australia’s problems stem by not having a centre-right political party that argues for and actually implements the “small government, free markets and less state intervention” agenda that he speaks of. Having done nothing to counter the long march through the institutions it inherited from Labor it is doubtful any Coalition government, much less the Morrison Government, will have the courage go against mainstream media left opinion. The biggest danger is that Morrison will be buoyed by the praise he is getting (for example here and here) from the Canberra Press Gallery for having rejected a centre-right policy response (if such a think exists).
Again, I sincerely hope I am wrong about Morrison (and Frydenberg). It is said that you should never let a good crisis go to waste. The scale of fiscal consolidation and need for economic recovery rooted in entrepreneurialism demand a strong centre-right recovery. The only question is whether the Morrison Government will waste the crisis or capitalise on it? Given its centre-left leanings and having previously wasted the GFC crisis I am not optimistic.