Confidence is the key to whether we, as individuals and as a nation, in terms of the Morrison government's latest slogan, "Bounce Back on the Other Side" from the coronavirus crisis. The circumstances created by the virus are unprecedented. Not only were governments and health systems unprepared, but governments and policy authorities are in uncharted waters in designing and implementing their responses.
Medical and scientific advice has differed as to the likely severity and urgency of the crisis, as has the medical, economic, and other policy advice as to how best respond.
All this has generally left most of us confused and frustrated, very uncertain as to just how circumstances will unfold, and over what time period, and what impacts this will have on our daily lives, and on us and on our society moving forward.
So far, widespread "lock downs" and "social distancing/isolation" are confining us to our homes except for essential shopping, medical attention, limited exercise, and work that cannot be done from home, with no indication as to for how long, or how we can expect to come out of it. Importantly, the Morrison government has amassed considerable power unto itself, with little direct scrutiny and accountability, even conceding the limited constraints from some states through its so-called National Cabinet.
The Parliament is to meet sparingly, and the budget has been delayed. To date, we have been given no "scenarios" or "models" that would provide some indication as to how they expect the infection rates to unfold - how many cases, how many deaths, over what time period - save for the declared aim of "flattening the curve", but with some "assurance" that our "testing" is pervasive and world class.
Similarly, we have been given only the vaguest indications of the likely economic and social impacts - mostly conditioning us to expect a recession with a significant increase in unemployment, even with huge/expensive packages to "stimulate" and "cushion", treating "all jobs as essential", and just modest responses to impacts on mental illness, domestic violence, and so on.
The cash handouts to individuals and business, wage subsidies, access to delayed payments arrangements and loans, and the lowering of interest rates and significant injections of additional liquidity by the RBA, all depend on the recipients having the confidence to spend and invest, to keep their businesses open, and to keep their employees. This is asking and expecting a lot, given the sustained uncertainty, and historically significant stock market volatility.
It is significant that the government came into this crisis with a serious "trust deficit". As an ANU study of the 2019 federal election had found, "Trust in government has reached its lowest level on record, with just one in four Australians saying they had confidence in their political leaders and institutions, and that "satisfaction with democracy is at its lowest since the constitutional crisis of the 1970s". This deficit was then compounded by the Morrison government's poor handling of the bushfire crisis, on the back of probably our worst drought.
Even though the government has yet to fully concede, it seems the virus will continue to infect, albeit at a contained rate, until an effective vaccine is found and deployed, and the expected recession (or at least very weak economic activity), in the context of a serious global recession, and the packages having to be paid for, can be expected to last for some considerable time.
It seems the virus will continue to infect, albeit at a contained rate, until a vaccine is found.
So, not only is it difficult to predict just how we will "bounce back", but there is also an important question as to "bounce back to what", especially with key industries such as education, tourism, retail, services, and manufacturing, hit very hard.
Realistically, many businesses will not reopen, and business, schooling and even social interaction, may come back in a very different, more technologically dependent, form. For example, recognising the cost and convenience of being able to hold effective business meetings, or deliver teaching via Skype, Zoom and other technologies, may significantly reduce the need for business travel, and change the face of education, schools and higher.
Moreover, there is a significant imperative for governments to think and plan longer-term and strategically in terms of how they would like to see our industries rejuvenated and developed, especially as we transition to a low carbon society by mid-century.
John Hewson is a professor at the Crawford School of Public Policy, ANU, and a former Liberal opposition leader.