Share
Historic policy transformations – response to
Covid-19 crisis
The Covid-19 pandemic
is forcing some key Western societies to freeze significant economic activities
as a way to impede the advance of this disease. Concurrently countries such as
Australia have embarked on unimaginable and rapid policy transformations shaking
foundations of modern neo-liberal economies.
“Whoever heard of
such a thing? Can a land be made to bring forth in one day?” This saying reverberated
in my mind as I was glued to my TV in astonishment listening to the nature and
pace of policy changes at work. So I Googled to confirm which ancient Biblical
author said this. It came from the writings of Prophet Isaiah.
In Australia, the announced
Government response to Covid-19 so far includes measures costing close to $300
billion:
- A doubling of income support (social
security benefits) for unemployed people, and an additional one-off top up payment
- A $130 billion JobKeeper Payment to
businesses including sole traders as wage subsidy, subject to set criteria
- Working families to receive free
childcare the next 6 months to meet family needs and ensure survival of the
childcare sector
- Access to a portion of superannuation
(retirement funds) for those in need subject meeting certain conditions
- Measures by
Government and Reserve Bank to support the flow and cost of credit
In the midst of a dark
cloud and grief from impacts visited on the globe by Covid-19, we see rapid
formation of humane policies affirming the worth and dignity of all Australians
is an absolute miracle to behold. Who wouldn’t want to chronicle this moment
even though utter sorrow is around!
It took a Great
Depression and World War II to lay conditions for the emergence of what became
the welfare state – growth in access to institutional social security benefits,
education, housing programs and the like.
The rise of
neo-liberalism was equally a very monumental change, but occurred gradually and
succeeded in dismantling the welfare state as we knew it, transforming it into
a very selective and targeted safety net.
Even
the applauded Prices and Incomes Accord of Hawke-Keating era that produced
universal superannuation, enhanced family payments and childcare and facets of
social wage took time to be negotiated, thought-through and put into place.
After all Australia was globalising and going neo-liberal to avoid becoming a
‘banana republic’ (LoL). Needless to say the country needed to tackle stagflation,
modernise the economy and minimise industrial disputes.
It is still
confounding that the emergence of Covid-19 has had such cascading impacts from
loss of life, disruption of economic and social life, etc. To contain its
advancement, global movement is shattered – borders closed, planes grounded and
tourism stopped. Global supply chains impaired, putting under great test our
globalised economic system. Global sports and education operations are
disrupted; hospitality industry and the arts are shattered. Financial markets
go south. And the list goes on. And these impacts from one virus and reportedly
one wet market! Who could have imagined of such cascading effects?
And then back to
the now - when overnight some fundamentals of neo-liberalism are cast aside, it
is an amazing thing to see. Who is not astonished by the doubling of income
support for the unemployed given the political contestation over this issue?
Who is not astounded that parents can now access free childcare for the next
six months?
Even the IMF is now
largely of similar mind, encouraging state interventionist policies,
emphasizing:
The
success of the pace of recovery will depend crucially on policies undertaken
during the crisis. If policies ensure that workers do not lose their jobs,
renters and homeowners are not evicted, companies avoid bankruptcy, and
business and trade networks are preserved, the recovery will occur sooner and
more smoothly.
Who knows what
Australia economic arrangements would look like after Covid-19 is contained or
consigned to past history!
It is hard though to
imagine the benefits for unemployment people will go back to being so much
below the poverty line as may have been the case over the last decade or two.
Similarly it will
be interesting to see what tomorrow’s globalised world looks like.
And who knows what
economic miracles or challenges await?
But let me do this
article justice with an important policy concern regarding the 60+ old plus,
and also a different issue about cruise ships.
Protect 60+ Year Olds – Work Settings Covid-19
Exposure
A lot has been
said about protecting the 60 year-old plus and ensuring grandkids don’t pass
Covid-19 to grandparents. But policy implementation needs to clearly protect
60+olds from work related Covid-19 exposure. For example, contractors in a gig
economy such as rideshare and taxis have limited options to social-distance. It
is clear people in the community and local travellers can potentially spread Covid-19
in the transport system thus putting 60+ year olds at risk.
This can be
managed by simply allowing 60+ year olds in the gig rideshare economy (perhaps
even taxi drivers of same age) to take their businesses into hibernation. It is
a targeted way of preventing such at-risk groups turning to clusters with
serious Covid-19 clinical presentations.
Ship Cruises, Hospital Care & Taxes
Another thing came
to mind about taxation and mutuality after the agony the country has been going
through connected to Covid-19 Cruise ships crisis. Mainstream media reported
that some of these ships are registered in tax havens like the Caribbean and places
like that.
Post Covid-19,
surely the Federal and State Governments need to look at cruise ship owners
contribute direct taxes. The fact is cruise crew and passengers are benefiting
from public hospitals and private hospitals that are now treating Covid-19
patients.
Australian
citizens and residents during this crisis are coming to terms that their
elective and urgent elective surgery in public and private system will be
delayed in order to attend serious Covid-19 needs. This is all very well as
serious Covid-19 health concerns needs to be prioritised – it is a humane thing
to do.
But surely, going forward these cruise companies
must be brought into line in terms of taxation obligations. There are strong
ethical and moral issues here. Australian citizens, residents and Australian companies
contribute taxes and insurance hospital cover. It is an ethical and moral thing
to realise that if you are going to use services of a country, you should be
paying taxes. In the future it is problematic if these cruise ships that choose
to avoid tax by registering in tax haven, yet expect Government support at
taxpayer’s expense.
Share
