Fearing the Big W
Loss of hope is one of the biggest casualties of a W-shaped recession. By Nick Cater
The announcement of fresh COVID-19 casualties is an exercise in political theatre. Solemn premiers stand aside their senior health advisors while signers talk to the deaf in the corner of the screen, a device employed to signal that every word uttered is vital to our lives.
The result is a single-minded obsession on the presumed benefits of lockdown, the number of lives that might be spared or wretchedness avoided, with little attention paid to the mounting costs.
Perhaps a new daily indicator, a running total of businesses on life support or dying, would improve our perspective informing us of the price to be paid for locking down the economy.
On the data available now, we can only guess at the number of business casualties, the consequences for jobs and wages and the quantum of despair.
The signs are not good. The evidence we do have points to a deeper and longer recess than many of us were bargaining for at the start of July.
Optimism has been drained from business. No one knows when or how this nightmare will end or the state of the economy if (not when) the cavalry will arrive with a vaccine. Investment in the meantime is close to a standstill.
Tough, early action to halt the spread in March was supposed to buy us a V shaped recovery.
That was how it appeared to be working out in June when the ANZ-Roy Morgan Business Confidence Index bounced from a record low of 76.9 in April to 86.9. In the most recent survey it was in free-fall once again. The V shaped recovery is looking distinctly like a W.
Source: Roy Morgan Business Confidence Rating: 2010-2020
What happens next will be heavily influenced by the action of governments and the ability of premiers and the prime minster to hold serve.
There will days or weeks when the virus appears to winning. Heavy handed public health measures at times like these could turn the W into a sawtooth recovery.
Clarity about how we will be expected to live our lives until a vaccine is or isn’t found is desperately needed. Hope is in short supply.
At times like these, it pays to stand back and assess what on earth Liberal governments should be doing, and how to live true to the principles proven by success since 1949, when the first Liberal Party government took power.
The growth in prosperity over the last 76 years has not been driven by government. Quite the opposite: it has been achieved by individuals blessed by governments with the sense to get out of their way.
The measures we have taken to control the pandemic have set us, perhaps necessarily, on a different track. The degree of intervention in the economy is unprecedented and the cost unknown.
Red tape has increased sharply at a time when there seems to be a permit for everything. Inevitably that burden is most heavily felt by Small and Medium Enterprises.
As Liberals we should aspire to make people feel secure in the present and in control of their own destiny. They should be prepared to take risks inspired by hope.
It is hard to identify a period since the foundation of the Liberal Party when we have been further from achieving that ideal. Never have there be so many causes of anxiety. Australians feel anxious about health, the climate, mortgages, jobs and threats to our traditions including the role of the family. They fear threats from abroad, particularly China.
Feel powerless to improve their own lives and distrust those who appear to be in charge, but increasingly sense their fortunes are in the hands of others.
Australians see narrowing horizons and increased obstacles ahead; are nervous of risk; disinclined to have a go; ill-equipped with the necessary skills to thrive; and have begun to doubt the value of education.
Younger Australians feel that the odds are stacked against them. They sense they are living at the end of times, rather than the dawn of an exciting new era.
Older Australians sense their values are being stolen and their wealth and their savings under threat.
This is no time to be instilling more fear in the community, as politically-motivated internal border closures, curfews and heavy-handed policing are doing.
The correlation between confidence and the severity of the lockdown is clear. The only way out is by inspiring individuals to get out and have a go, to seize the freedom to do their best and make their best better, hopefully before the weight of restrictions crushes the human spirit.