Labor learns to live with governing
Labor’s necessary backflip on COVID payments is part of learning to live with governing rather than being stuck in opposition. There will be plenty more tough decisions to come – with less leeway to change course.Jennifer HewettColumnist
Anthony Albanese’s about-turn on COVID payments is an acknowledgement of the political reality that comes with governing rather than being in opposition. Now it’s the Coalition’s turn to express outrage about treating people unfairly or being too slow to adjust.
The clamour from unions, businesses, politicians of all persuasions – and, most importantly, a lot of the voting public – left the government with little room to manoeuvre, of course.
Labor’s professed commitment to addressing a legacy of Coalition debt and deficit clashed too awkwardly with Albanese’s pledge from opposition to “leave no one behind”. It just took the prime minister a little too long to appreciate this.
Labor’s ability to blame the former government for current problems still remains relatively potent. The tactic was hardly persuasive in this instance – but neither is the opposition’s demand for an “apology” from the government for causing people stress.
The bigger picture is more complicated. The economic reality facing the government is likely to require more drastic policy shifts more frequently – including a willingness to stick to other “difficult” if unpopular decisions once made. Labor’s modest policy agenda was helpful in repelling Coalition attacks during the campaign.
But it also means this government has a limited mandate beyond a few key commitments and expressing faith in building collaboration and consensus. The latter is clearly harder to establish when inflation and interest rates are heading up, house prices are heading down and consumer and business confidence is fast eroding.
From COVID-19 to energy prices to inflation, the new Canberra mantra is that things are likely to get worse for a while before they get better. Yet, the protective value of Labor pointing backwards to assign blame will only diminish the further it advances into its own term of office and delivering on the promise of “a better future”.
Other temporary assistance
It means the government will also be keen to show that its reversal on COVID-19 payments is not a signpost towards future changes of direction when it comes under pressure.
The requirement for COVID-positive cases to isolate at home for seven days translated into an unhappy division between all those able to access paid leave to isolate and the minority of those who could not.
Rather than giving up on a week’s wages, many would turn up at their jobs anyway or deliberately not test themselves. It would only exacerbate the current cycle of rising infections and extreme labour shortages in an economy where job vacancies now equal the number of unemployed.
A restoration of the $750 payment – backdated to July 1 – will help.
But a government whose election campaign was heavily focused on cost of living pressures will have difficulty in explaining the need to stop other temporary assistance for households and businesses.
The Treasurer is sticking to the Coalition’s September end date for halving the fuel excise of 44¢ a litre, for example. But it’s not as if the jump in fuel and energy price increases of the first half of 2022 will be fixed by then. Instead, pricing pain will probably be more acute. Jim Chalmers will have to rework Labor’s favourite line about everything going up except people’s wages.
The Treasurer’s economic statement to parliament later this month will give him the opportunity to detail new forecasts and argue Australia can invest and capitalise on its many opportunities. But the community patience for seeing results will also be limited.
At least Chalmers knows his bottom line in the October budget will be boosted by the combination of the lower welfare payments and increased taxes that come from more people working and the lowest unemployment rate in almost half a century.
That still won’t magically balance ever-increasing demands for ever-increasing spending on almost all other government services – with no imminent cut-off date. The timing of the economic pay-off from “reform” is even vaguer. Labor’s campaign attack on Coalition “rorts and waste” and the promise of increased taxes paid by multinationals provided convenient budget cover from opposition. Inside government, both will barely touch the sides of either spending or revenue projections.
What happens then?
True, the government assistance measures for the latest COVID-19 surge are temporary, and the states have agreed to pick up half the $800 million cost of extending payments to September 30. But what happens then?
The answer is more one of hope than conviction. Like the rest of the world, Australia can only operate on the basis there won’t be dangerous mutations that render vaccines ineffective, that governments can no longer afford to repeat emergency support payments indefinitely, that living with COVID-19 really does just become part of living.
Even the Victorian government is now admitting that politicians sternly insisting they must strictly follow the health advice – for mandatory mask wearing, for example – is no longer an effective strategy. Black and white has smudged into many shades of grey.
But despite the community’s desire to move on from pandemic restrictions, the infectiousness of the latest COVID-19 variants is hitting hard. That’s even though panic about the spread has largely evaporated for most people.
Fear of the unknown has itself mutated into the inconvenience of the known – and probably several days of feeling lousy. The human cost is starkest in an over-strained health system.
This underlines the failure of governments at all levels to convince more people to line up for boosters – made harder by another absurd delay in recommendations from the medical expert panel about the benefits of a fourth shot for those younger than 65.
But 2022 offers plenty of different problems to worry about too. Just ask the government.
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