Tag: economics

Will the Morrison government learn from its Covid success or return to trickle-down economics?

Reality constantly reminds us that the biggest risk the pandemic poses is to those who think it is less than it seems. From the White House to the safe house, this is a virus that locks on to system weakness and exploits individual arrogance.



Scott Morrison wearing a suit and tie: Photograph: Mick Tsikas/EPA


© Provided by The Guardian
Photograph: Mick Tsikas/EPA

The US presidential race is paralysed because one of the candidates believed he had the power to wish it away and let freedom reign, while countries like Sweden that chose to let it run are paying a higher economic cost than those whose governments swung into action.

Closer to home, Victorians have been living the repercussions of the previously unchallenged orthodoxies that you can outsource public safety and transform the care for our oldest and most vulnerable from a public service into a market.

Related: Essential poll: tax cuts brought forward but only 25% of voters think budget will benefit them

It’s as if the virus is engaging in a real-time critique of the free market ideology that decrees big government is bad, taxes are a burden, caring for others is counterproductive and the market will always determine the best course of action.

As Kurt Anderson has outlined in his excellent new book Evil Geniuses, these assumptions lie at the heart of a political model ruthlessly promoted for the past 50 years by an organised cabal of wealthy industrialists, libertarians and the “useful idiots” they seconded to their cause.



Scott Morrison wearing a suit and tie looking at the camera: ‘The levers the government is pulling seem geared to getting the economy back to where it was before the current crisis hit.’


© Photograph: Mick Tsikas/EPA
‘The levers the government is pulling seem geared to getting the economy back to where it was before the current crisis hit.’

Now, as the world thinks through a recovery to the pandemic’s shock, the Friedman model of trickle-down economics, deregulation and rabid individualism is finally coming under scrutiny.

This context takes centre stage as the Morrison government releases its delayed budget later on Tuesday. Like so much of what this government does, the plan has been broken into so many pre-packaged announce-ables that it’s hard to see a bigger picture. But there is one.

While there is no hiding the fact that the prematurely celebrated budget surplus is history, the levers the government is pulling seem geared to getting the economy back to where it was before the crisis hit. It’s business as usual with a deferred payment plan.

Related: Budget 2020: Coalition hopes to drag Australia out of recession with tax cuts and big spending

We caught this thinking in the government’s initial response to the forced lockdown: incentives for small businesses to invest in expansion when all they were thinking about was survival; incentives for home renovations when a new pagoda is the last thing on anyone’s mind.

These were textbook Freidman-inspired attempts to bookkeep our way through a downturn, giving business and individuals financial incentives to do things that were against their disposition. Unsurprisingly, they were undersubscribed and fell flat.

It wasn’t until the crisis prompted the government to put money directly into the pockets of those most vulnerable that the

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Will Morrison government learn from its Covid success or return to trickle-down economics? | Peter Lewis | Opinion

Reality constantly reminds us that the biggest risk the pandemic poses is to those who think it is less than it seems. From the White House to the safe house, this is a virus that locks on to system weakness and exploits individual arrogance.

The US presidential race is paralysed because one of the candidates believed he had the power to wish it away and let freedom reign, while countries like Sweden that chose to let it run are paying a higher economic cost than those whose governments swung into action.

Closer to home, Victorians have been living the repercussions of the previously unchallenged orthodoxies that you can outsource public safety and transform the care for our oldest and most vulnerable from a public service into a market.

It’s as if the virus is engaging in a real-time critique of the free market ideology that decrees big government is bad, taxes are a burden, caring for others is counterproductive and the market will always determine the best course of action.

As Kurt Anderson has outlined in his excellent new book Evil Geniuses, these assumptions lie at the heart of a political model ruthlessly promoted for the past 50 years by an organised cabal of wealthy industrialists, libertarians and the “useful idiots” they seconded to their cause.

Now, as the world thinks through a recovery to the pandemic’s shock, the Friedman model of trickle-down economics, deregulation and rabid individualism is finally coming under scrutiny.

This context takes centre stage as the Morrison government releases its delayed budget later on Tuesday. Like so much of what this government does, the plan has been broken into so many pre-packaged announce-ables that it’s hard to see a bigger picture. But there is one.

While there is no hiding the fact that the prematurely celebrated budget surplus is history, the levers the government is pulling seem geared to getting the economy back to where it was before the crisis hit. It’s business as usual with a deferred payment plan.

We caught this thinking in the government’s initial response to the forced lockdown: incentives for small businesses to invest in expansion when all they were thinking about was survival; incentives for home renovations when a new pagoda is the last thing on anyone’s mind.

These were textbook Freidman-inspired attempts to bookkeep our way through a downturn, giving business and individuals financial incentives to do things that were against their disposition. Unsurprisingly, they were undersubscribed and fell flat.

It wasn’t until the crisis prompted the government to put money directly into the pockets of those most vulnerable that the strategy began to work. Doubling unemployment support and providing struggling businesses with a Keynesian lifeline may have been anathema, but it got money circulating in a shocked economy.

The big question for today’s budget is: can the government can learn from these successes? Early indications suggest not.

The choices the government is making speak to a desire to go back to the way things were. Tax cuts

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