Prime Minister Scott Morrison and Treasurer Josh Frydenberg have announced a five-year plan to help the nation’s economy fight back from the ‘Great Recession’ with a range of measures, but is it enough given the deteriorating environment?
As we know, all good things come to an end, and yesterday Treasurer Josh Frydenberg confirmed what many Australians had suspected amid the global and domestic turmoil wrought by the impact of COVID-19.
"Our record run of 28 consecutive years of economic growth has officially come to an end," Treasurer Frydenberg said, following revelations that the national economy contracted by 7 per cent in the June quarter, marking the second successive drop in GDP and the largest single GDP decline in the nation's history.
This dramatic decline in the economy comes in the aftermath of both the disastrous bushfire season, which had a catastrophic impact upon the national economy, and the decade of drought that has ravaged the nation's agricultural industry.
COVID-19 represents the final nail in the coffin for the national economy otherwise beset by a series of devastating factors, which has managed to avoid serious economic turmoil as individual state and territory economies stepped in to prop up others as they struggled throughout the three decade period of 'growth'.
Each of these factors combined have revealed a now well documented lack of national resilience across the economic, political and strategic facets of Australia, something, that the Prime Minister and Treasurer glossed over in the announcement of the national accounts.
Prime Minister Morrison said, "Australia will recover and Australia will grow again. The jobs will come back and they will support the lives and livelihoods of Australians. Our plan for that to occur is to build on the resilience, strength and enterprise of the Australian people."
Jacob Taylor, a cognitive anthropologist and visiting research fellow at the Asian Bureau of Economic Research at the Crawford School of Public Policy at the Australian National University, has cautioned against framing the conversation and policy outcomes as resilience-focused when in fact they're driven by security.
Taylor articulates, "Resilience is one of those terms that wins special prominence with policymakers during a crisis. The COVID-19 pandemic has been no different.
"In fact, behind a general rhetoric of resilience, the government’s current set of policy options appear to be driven predominantly by the logic of security. Security is not the same as resilience."
Responding to the challenge?
Both the Prime Minister and Treasurer have promised that while the road to recovery for the national economy and Australia's way of life "will be long, the road to recovery will be hard, the road to recovery will be bumpy," there is light at the end of the tunnel as they put the finishing touches on a plan designed to navigate through the choppy domestic and global waters.
A core component of the government's strategy is focused on accelerating the delivery of almost $10 billion worth of infrastructure projects, putting downward pressure on energy costs to support manufacturing and a series of jobs creation, business innovation, industrial relations reform and cutting prohibitive business regulation.
What the specifics of this look like remains to be seen, however, the government has confirmed that it aims to bring forward almost $158 billion in personal tax cuts, which were due to commence in mid-2022 as a means of putting more money into the pockets of Australians in an effort to stimulate the economy.
While much of the detail remains to be seen and is expected to be revealed when the budget is handed down in early-October, one can't help but ask, is it enough to not only get the nation through the worst economic downturn since the Great Depression, but also see it surge forward on the other side of it?
Same, same, but different
In this increasingly contested global shift in power dynamics, driven largely by the growing use of 'whole-of-government' public policy machinations by emerging great powers, Australia, as with many comparable nations and larger partners, is recognising that in order to maximise the capacity of any national response, it needs to be holistic, integrated and considered.
This is something articulated by respected strategist and policy expert Alan Dupont, stating, "Despite its terrible toll, the pandemic provides a once-in-a-generation opportunity to unite the country around a security agenda that will reshape how we live in a post-COVID-19 world.
"How this agenda will be constituted and implemented is for debate. But security experts increasingly believe national security policy should be more holistic, integrated and focused on making us resilient to such shocks."
For Taylor, this approach requires a delicate balancing act between 'resilience' and 'security', which he explains as "the key message from complexity theory, the field of study from which the term resilience originates, is that resilience refers not simply to safety or security but to the capacity of a system to recover from perturbations (changes and shocks) in its environment".
"To be resilient, a system must invent ways to carefully balance a trade-off between maintaining structure (think sturdiness and security) and openness to new information (think flexibility and global connectivity)," Taylor says.
Expanding on this, he advocates for greater economic and multi-lateral collaboration and partnerships with the region's emerging powers, including China.
Taylor explains, "From this perspective, constraining multiple facets of Australia’s international engagement to narrow alliance-defined security arrangements is short sighted and just too risky.
"That approach threatens to reduce Australia’s flexibility by restricting access to accurate information about the international system in which it operates.
"If Australia’s moves towards more defensive security policies are not counterbalanced by moves towards greater economic and diplomatic engagement with the entire system (including those changes and shocks in the system attributable to China), then Australia may well come out the other side of this global pandemic in a more vulnerable and less resilient position than it was before COVID-19."
Taylor does, however, make a valid point in leveraging the economic experience and indeed success of nations including South Korea, Japan and Singapore – each of which provide powerful public policy examples of developing a robust, diverse, modern and competitive global economy.
Australia is defined by its economic and strategic relationships with the Indo-Pacific and the access to the growing economies and to strategic sea lines of communication supporting over 90 per cent of global trade, a result of the cost-effective and reliable nature of sea transport.
Indo-Pacific Asia is at the epicentre of the 21st century’s era of great power competition and global maritime trade, with about US$5 trillion worth of trade flowing through the South China Sea and the strategic waterways and chokepoints of south-east Asia annually.
For Australia, a nation defined by this relationship with traditionally larger yet economically weaker regional neighbours, the growing economic prosperity of the region and corresponding arms build-up, combined with ancient and more recent enmities, competing geopolitical, economic and strategic interests, places the nation at the centre of the 21st century’s “great game”.
Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia.
Australia is consistently told that as a nation we are torn between our economic relationship with China and the longstanding strategic partnership with the US, placing the country at the epicentre of a great power rivalry – but what if it didn’t have to be that way?
Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific and what you would like to see from Australia’s political leaders in terms of shaking up the nation’s approach to our regional partners.