George Megalogenis’ Exit Strategy

George Megalogenis, Exit Strategy: Politics after the Pandemic (Quarterly Essay 82, 2021) – plus correspondence in QE 83

In the opening pages of this Quarterly Essay, George Megalogenis, veteran of the Canberra press gallery, describes the way trust in the Australian government was eroded over the Rudd–Gillard–Rudd–Abbott–Turnbull–Morrison years. The key question for the essay, he writes, is:

Can Australia restore faith in good government? Are we doomed to repeat the farce of the last decade, when we avoided the worst of the GFC only to succumb to policy gridlock and American-style electoral polarisation in the recovery? Or will the visceral experience of the pandemic allow us to reconceive the political economy of the nation?

(Page 4)

It may be the key question, but as far as I can tell the essay makes no real attempt to answer it.

What it does do, with considerable flair, is spell out the history that defines the present moment. Megalogenis compares the Covid recession with previous recessions, and describes the way relationships between governments and the heads of treasury have changed and developed over the decades since World War Two. He also describes the way the economists advising governments finally learned that government spending worked better than restraint as a response to economic recession.

The essay revisits, among other things, the Global Financial Crisis and the pink batts beat-up. It covers familiar ground, such as the way Prime Minister Morrison was slammed for taking a secret holiday during the 2019-2020 bushfires meant that he was less cavalier about the Covid crisis. It discusses the way universities were left out of Covid rescue packages.

It tells these stories in prose that makes us uninitiated readers feel as if we’re understanding something afresh, with the kind of gossipy personal touches that remind us that government decisions are made by fallible human beings, who are advised by other fallible human beings, but that fallibility is substantially decreased if public servants aren’t sacked wholesale by incoming governments, as they were by Tony Abbott.

The essay is dated 7 June 2021. By the time it was published a couple of weeks later, the next Covid-19 outbreak had begun. By the time I got to read it three months after that, a sizeable proportion of the Australian population was back in lockdown, there were weird demonstrations in Melbourne, and the prospect of the Federal Government offering the kind of leadership that would restore faith in good government seemed remote. But the essay’s final paragraph – read in the light of fresh submarine deals and more bloviating about climate change – has lost none of its force:

Morrison has yet to accept responsibility for the future. The longer he waits, the greater the risk that the rest of the world, led by a reinvigorated United States, imposes its own terms on Australia.

Quite a bit of the correspondence in Quarterly Essay 83 – Lech Blaine’s Top Blokes – responds specifically to Megalogenis’ discussion of the Morrison government’s treatment of universities. Megalogenis discussion is interesting – they did it because they hate universities, because universities produce Labor-voters, and because they hate Victoria and Victoria specialises in higher education. There’s a lot of nuance in the discussion, but the Morrison government doesn’t emerge from it smelling any more like a rose.

For me, the most telling response to the essay’s main thesis came from Richard Denniss, chief economist at the Australia Institute and author of Quarterly Essay 70, Dead Right (my blog post here). He laments that this essay didn’t contain ‘a lot more on possible exit strategies and the political forces that will determine which options are placed on the democratic menu and, ultimately which dish is selected’. I love this departure from the usual calm tone of QE correspondence, in which he quarrels not so much with George Megalogenis as with his source – an economist calling out an economist rather than the journalist who may be simply innocent meat in the sandwich:

George quotes former Treasury secretary Ken Henry saying [successive governments’] hostility to government spending ‘was not something that the Australian Treasury had dreamt up … The academic consensus around fiscal policy was basically: “It’s too hard to use” … The best thing to do is sit on your hands and let the private sector work it out.’

What utter crap. No such academic consensus ever existed, and it’s not at all clear from the essay whether George believes it did. But what is clear … is the tendency in Australia for powerful people to source advice, economic or otherwise, from those they agree with.

(QE 83 page 123)

The most telling additional piece of information comes from Travers McLeod, chief executive officer of the Centre for Policy Development. The National Covid-19 Coordination Commission (NCCC), he tells us, was established by Scott Morrison in March 2020 to ‘coordinate advice to the Australian government on actions to anticipate and mitigate the economic and social effects of the global coronavirus pandemic’. Then, on 3 May 2021, ‘with Australia at the bottom of global vaccination rates, and the Delta strain having just been used to justify a ban on Australians returning from India’, it was disbanded.

It does look as if any hope for a reasoned response in Australia to the ongoing pandemic crisis (not to mention the climate emergency) must lie with the states, or with any luck, a change of government.