In my working life I will have lived through four recessions: the mid-1970s, early 80s, early 90s and the likely forthcoming recession. I barely noticed the severe economic downturn on the first two occasions.
Between 1973 and 1975 I was a contracted academic at a university. In the early 80s I was a permanent employee working in the industrial relations department of the commonwealth public service. There I did what I could to facilitate employment at a time of growing unemployment.
However, I certainly felt the impact of what Paul Keating in 1991 called “the recession we had to have”. And I expect it will be much the same this time as Australia heads to what is likely to be the most severe economic downturn since the Depression, which ran from around 1929 to 1932.
As someone who was briefly unemployed in early 1976 in the wake of the mid-70s recession, I have some understanding of the heartbreaking queues that formed this week outside Centrelink offices throughout Australia. Australians of all ages, but especially the young, have lost jobs suddenly and through no fault of their own as federal, state and territory governments attempt to respond to the pandemic.
Recessions usually develop with a greater or lesser intensity due to economic circumstances at home and abroad. As a nation that trades on world markets, Australia cannot avoid most international economic developments. Some of the reasons Australia avoided the worst of the global financial crisis in 2008 turned on the economic benefit of the mining boom and the fact this was predominantly an economic downturn that afflicted the northern hemisphere.
What’s different this time is that governments around the world have shut down large sections of their economies in the wake of the pandemic. That’s why the surge in unemployment has been so large and so sudden. And that’s why the response of governments, including Australia, to inject stimulus into the economy has been so substantial.
Scott Morrison and his ministers, with the support of most members of the national cabinet comprising state and territory leaders, have sought to protect as much of the economy as possible while acting in accordance with medical advice provided by the Australian Health Protection Principal Committee.
So far, Australia seems to be doing reasonably well. Peter Doherty, co-recipient of the Nobel prize in medicine in 1996, told Nine Entertainment newspapers this week: “Basically, government is stepping up to the plate … I think the steps announced by the Prime Minister and the premiers will dampen this (pandemic) down … That will mean a lot more people will survive …”
Not long after Doherty’s comments were reported, on Wednesday Fran Kelly interviewed Health Minister Greg Hunt on the ABC Radio National Breakfast program. Shortly before talking to Hunt, Kelly had spoken to Kerryn Phelps, a GP and the former independent member for Wentworth who was defeated by the Liberal Party’s Dave Sharma in last year’s election. Phelps received an interruption-free interview that she used to criticise the Coalition government’s response to COVID-19.
Then it was the Health Minister’s turn. Kelly, like many other ABC journalists, has adopted the role of telling governments what they should do at a time of pandemic. Her first question set the tone of what turned out to be a hostile interview: “The stage one restrictions have not slowed the COVID-19 virus; what makes you think that anything short of a full lockdown will do the job?”
Hunt responded by saying the restrictions imposed “a level of social isolation unseen in this country before, other than in the 1919 (Spanish flu) outbreaks”. He was immediately interrupted, the first of what turned out to be close to 20 interjections. It would seem that Kelly was more interested in stating her own opinions than in listening to what the Health Minister had to say. She accused the Morrison government of going slow on its response to the pandemic, a statement Hunt described as “irresponsible”.
Kelly, who once depicted herself as an “activist”, implied that the only people who did not take her line on how to handle the pandemic were those who were not “looking at what’s happening overseas”. Hunt responded that the Australian government was “deeply engaged” with overseas developments. Later Kelly alleged that other countries were testing for the virus more widely than Australia. Hunt said this statement was “flat plain false”.
And so it went on, with Kelly claiming that by mid next month intensive care unit beds could be “overwhelmed”. Well, this could be the case — or maybe not. The federal government is working on increasing medical capacity, although this is essentially a state and territory responsibility.
The Morrison government, acting on medical advice, is trying to strike the right balance between limiting the pandemic and keeping open as much of the Australian economy as possible. Some journalists take little heed of the fact recessions and depressions also have adverse medical consequences, including increases in suicide.
It’s easy for journalists such as Kelly, in a secure, well-paying taxpayer-funded job at the public broadcaster, to call for harsher and harsher measures leading to a total lockdown of the nation with the resultant destruction of more businesses, jobs and personal lives. Governments, however, have a wider responsibility.
It makes sense for the Morrison government to go with the expert medical advice it has received, which has the broad support of Doherty, while trying to keep as much of the economy working as is possible.
In his 1988 book Australia and the Great Depression, CB Schedvin describes the reality of 1929 and all that. The recession began in the late 1920s and the economy did not begin to recover until 1932. Unemployment hit 27 per cent in 1931. Australia recovered relatively well during the 30s. But it was a slow process and an experience to be avoided if possible.