Avoiding recession won’t be enough to solve Australia’s economic problems

 In Home News Section, Uncategorized

Australia is not in recession. Not yet.

It’s possible the numbers will fall so a second COVID-induced recession will be avoided later this year, too.

But it probably won’t make much difference if the technical definition of a recession is reached or not — the nation has been in an economic malaise for a while.

It is a listlessness that pre-dates the arrival of a global pandemic.

COVID has exposed weaknesses in our society and the economy.

The economic rebound from the 2020 recession certainly gave succour to the federal government’s belief it was fundamentally different to recessions of the past.

There was no great economic failing behind that downturn, or this one, the thinking goes.

Instead, a once-in-a-century health crisis is to blame and once that is tackled, the economy will roar back to life.

Once restrictions are eased, it is likely the economy will rebound again.

From consumers with pent-up demand for hitting the shops, to businesses investing with more confidence knowing they won’t have to close with less than a day’s notice — all will respond to the removal of COVID restrictions.

But how long will that last? The release valve of spending will settle soon enough, and then what?

Past the headline figure, our economic vitals aren’t improving

Prior to the pandemic, productivity’s long-term trend has been lacklustre. Wages were stagnant, workforce participation was torpid.

How do those vital economic indicators look in the new COVID normal?

Let’s take a look at productivity.

Do you think you’ll have to take more time off in the future, for a COVID test or just staying away from others when you have the sniffles? Are you more likely to have to care for someone else who is sick, or might be sick? Will you be working from home more, with longer hours but getting less done? Are you having to spend more time helping the kids due to disrupted learning or their mental health?

Then there is workforce participation.

Has your casual job evaporated? Will you be relying on the gig economy? Taking whatever chunks of insecure work that are available? Given up trying to find work altogether? Are you a mother working part-time and now can’t afford to? Or given up on the hope of returning to the work full-time?

If you’re lucky enough to have permanent employment and other options, have you had much luck negotiating a pay rise recently?

Most of these issues existed before COVID came along. They are even more acute now.

Recession or no recession, these problems need to be tackled.

Workplaces are changing, the nature of work is changing and priorities are changing; everything from where we live, to how we juggle employment and parenting.

Employers, employees and unions will negotiate some of these issues in the new, COVID-normal world.

Those fortunate enough to be employed and with options will make their own personal calls about what work to accept, where to live and how to care for kids at the same time.

But should it really be left to see how we muddle through?

What about those with no bargaining power?

The PM must plan for life beyond the crisis

There is no doubt that the immediate health crisis posed by COVID demands intense focus from our nation’s leaders.

Hospital capacity, lifting interstate border restrictions, looking ahead to international travel: these are rightly high on the federal government’s agenda.

Prime Minister Scott Morrison is preparing for the future and what life will look like in the next few months.

But there is no sign of preparation for the longer term.

There is a pressing need to look beyond the end of the year and the looming end of the electoral cycle.

Casual and insecure work is growing, yet poses one of the biggest challenges when it comes to needing more time off work when sick, or possibly being sick, or needing to care for family.

The value of service workers has been cast in a new light. Not just critical health services like aged and disability care workers, but the cooks and cleaners who work alongside them, the delivery and warehouse staff behind our supply chains.

There is no guarantee the new, COVID-normal world will reflect their value.

Childcare and the education system are both immensely important in supporting both productivity and participation.

Both are in desperate need of an overhaul to be fit for purpose in the future.

Last week, under attack from the Opposition for having “failed his two jobs” of managing the vaccine roll-out and quarantine, Mr Morrison served up a calculated riposte.

“Anyone who thinks a prime minister of this country only has two jobs isn’t up to the job,” he said.


A prime minister needs to be able to deal with immediate crises and navigate over the horizon.

A plan to get to Christmas, or the next election, is not enough to get the economy, or the nation, on track.

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By political reporter Melissa Clarke (Original ABC Article)