The politics of the pandemic

Just as all politics is local, so Canberra is ever about politics (it’s the whole reason the place was built).

Pandemic has smashed into Australia’s capital, remaking the dynamic and direction of politics. Normal politics has ceased. Amazing political consensus has arrived. It won’t last, but it’s still amazing.

Covid-19 is changing the way Canberra does what it does, shifting lots of big p-words: power, policy and long-held political positions.

Parliament House has closed its doors to the public ‘indefinitely’, but the meaning of the pandemic flows through the building ceaselessly—especially out the back in the executive wing.

After cancelling all parliamentary sittings until August, the government has had to call a one-day session on Wednesday to legislate more big bucks for the battle against coronavirus.

Closing parliament for five months causes less popular angst than closing pubs. Even in amazing times, it’s politically unhealthy that a health crisis renders parliament a non-essential service.

Australia’s democracy is so robust that the House of Representatives overthrew a government in the midst of World War II and the war effort didn’t miss a beat. Not long after parliament remade the government, US General Douglas MacArthur saw the House of Reps in action and observed with a grin: ‘If the men of Australia fight as well as they argue, this war is won.’ MacArthur had been seated beside the speaker on the floor of the chamber during a vigorous evening debate, held after a formal dinner lubricated with liquid stronger than lemonade.

Such history advises that a pandemic won’t put Oz politics into hibernation for long. The greatest emergency shakeup of how Australia lives and works since World War II means there’ll be much to argue about.

Bad things change nations—wars, economic depressions and pandemics. And the war against the virus will push Australia towards depression.

The recession that’s about to hit Australia will drive politics long after we get a vaccine for Covid-19.

Many Australians now in the middle of their careers have never known recession, because of an ‘unprecedented stretch of economic growth’—a world record—since ‘the recession we had to have’ in 1991. Another of those ‘had to have’ moments has arrived, wearing a face mask, as The Economist noted:

The bushfires that raged through December and January could not stop it. Nor could a recent fall in house prices, a slump in iron-ore prices in 2014, the global financial crisis or the dotcom bust of 2001. But covid-19 seems likely to do what none of these other setbacks could: interrupt Australia’s unbeaten run of over 28 years without a recession.

The length and depth of the recession will be what matters politically. To get a short, shallow recession, Prime Minister Scott Morrison has abruptly killed the Liberal political mantra: ‘budget deficit, bad; budget surplus, good.

Like toilet paper and hand sanitiser disappearing from supermarket shelves, the much-anticipated surplus is whisked away by the emergency that demands constant washing of hands. We’re all Keynesians now.

In three frantic weeks, the government has announced spending measures worth $200 billion. To support financial markets, the Reserve Bank and the Office of Financial Management will throw in a further $105 billion. Combined, those measures are equivalent to about 16% of GDP.

Stuff that would have been delusional in January becomes a must-do in March and a done deal in April.

The Commonwealth takes control of 657 private hospitals? Done!

Free child care? Done!

As you try to get your head around a Liberal government nationalising (temporarily) large swathes of the economy, more amazing stuff arrives.

A deal with the unions to simplify industrial awards and save jobs? Done!

As Attorney-General Christian Porter observed, ‘There’s been the type of change in three weeks inside the award system that you might otherwise wait 30 years to see.’

Savour a Liberal government waxing warm about full cooperation from the trade unions that are the foundation of the Labor Party.

In the words of the ABC’s Annabel Crabb: ‘Every day that passes brings a new wonder.’

Emergency measures apply only as long as the crisis lasts. Yet, as a classic political quote attributed to former Chicago mayor Rahm Emanuel advises: ‘You never let a serious crisis go to waste.’

Beyond the infection curve, Canberra’s timeline is set by a remorseless three-year election cycle.

Morrison won his ‘miracle’ election on 18 May 2019. That means he’ll be seeking his next miraculous performance at a half-Senate and House of Representatives poll that must be held between 7 August 2021 and 21 May 2022.

The Morrison government won’t face the people next year. Wager that Australia’s next federal election will be held on that last possible day, 21 May 2022, allowing time for three more budgets.

The first will be the 2020 budget now pushed from May to October. The second budget, in 2021, would normally happen in May, but recession uncertainty might push it to later in the year. The third, in 2022, will repeat the budget-and-election formula that worked so well for Morrison last year: bring down an ‘early’ budget in April to launch the campaign for a May poll.

In two years, Morrison will be bringing down the budget before pivoting immediately to an election campaign. He has just 24 months to deal with pandemic and recession, then start the rebuild. Make or break.

The prime minister describes times both troubled and transformed:

There is a new normal here in Australia and it is one that we now need to get used to and settle into for that haul over the next 6 months. That is something that will go against the grain for so many, but we adapt. We can change the way we live, but it doesn’t change who we are.

For now, Morrison says, there are no red teams or blue teams. Australia comes together to confront a powerful enemy.

When red and blue politics resume, the terrain will be much altered. Old arguments will have less force. New thoughts will take hold. Amazing times.