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7 May 2020
Editorial Peter Whiting
By now, we’re all familiar with the rationale that we’re undergoing these Covid-19 limits to our personal freedoms and employment in order to ‘flatten the curve’, thereby saving lives and avoiding overwhelming our health system. Present indications suggest that we have succeeded in avoiding the worst scenario outcomes, and talk is now turning to when and how restrictions should be lifted to allow a return to ‘normality’.
Very different views are emerging about what the world should look like. Can we go back to ‘normal’, or is the world radically different?
The chaotic response of many governments, notably in the US and UK, resulted in a wave of potentially preventable deaths. A timely response was greatly impeded by the lack of a well-prepared, adequately resourced, flexible, and widely accepted national plan.
In the absence of such plans, coupled with access to adequate and timely medical supplies, efficient testing facilities, and comprehensive training of health workers, history will almost certainly repeat itself.
Effectively harnessing a nation’s human and material resources is essential, but not enough. A pandemic is a global phenomenon which calls for a global response.
On top of the countless human tragedies, there will be many long-lasting social and economic impacts of the Covid-19 pandemic. Perhaps none will be more profound though, than the death of free market fundamentalism and the return of the State.
Covid-19 presents a blindingly powerful economic case for change. It shows that an ideological, quasi-religious approach to regulating markets, sometimes called neo-liberalism and, until the virus, the dominant political approach in the west, is fatally flawed. It creates a weak and unstable economy, which magnifies risks and is unable to manage shocks. It threatens itself.
This article considers economic strategy post-Covid-19. In Part 1, it is argued that the principal requirement will be to generate a increased rate of increase in aggregate demand, and that Morrison’s proposed business-friendly policy settings will not help. Part 2 considers how best to increase aggregate demand, and what that implies for the budget balance.
What the government needs to appreciate is that the recent poor growth record of the Australian economy, and most other advanced economies, is not due to a lack of supply. Instead, the problem has been a lack of demand, and that lack of demand is due to the increase in inequality of incomes and the pressures on household incomes from low wage growth.
This evidence therefore leads to the conclusion that significant and lasting rise in the rate of wage increase and the distribution of earnings will require improved adaption to technological change, so that we maximise its advantages and minimise its disruptive effects.
What sort of construction projects should the government consider for a stimulus package? While the response so far has been to focus on ‘fast-tracking’ infrastructure, the current crisis has highlighted a number of pressing social needs. Various aspects of social housing top the list:
- Housing to reduce the number of people living in precarious private rentals.
- Housing for people who are homeless.
- Affordable housing for workers in health, emergency services, education and retail who cannot afford to live close to the communities to which they provide vital support.
The coronavirus pandemic came swiftly and without warning to turn our lives completely upside down! One group of people is experiencing this pandemic more acutely, however – those experiencing or at risk of homelessness.
Secure accommodation is lacking for people who are rough sleepers, couch surfers, staying temporarily with friends or families, living in temporary accommodation or in their cars. They are unable to go ‘home’ to self-isolate in a warm and safe house, fully stocked with food. This pandemic is making their lives even more difficult.
Pope Francis’s response to the Amazon Synod carries a message for Australia concerning our Aboriginal and Torres Straight Islander peoples, since Francis sees Indigenous people as very important in teaching us how to love and care for our common home.
I dream of an Amazon region that fights for the rights of the poor, the original peoples, and the least of our brothers and sisters, where their voices can he heard and their dignity advance. We cannot allow globalisation to become ‘a new version of colonialism.’
SPC video selection
Bishop Vincent Long of Parramatta speaks on the Feast of St Joseph the Worker 1 May 2020. Bishop Vincent is Chair of the Catholic Bishops Commission for Social Justice – Mission and Service.