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Byron Shire
May 15, 2021

Thus Spake Mungo: dodging the pellet

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Once again the Morrison government has dodged a bullet – rather a pellet, actually, with the real fusillade still to come.

The latest national accounts figures for the December quarter show that economic growth was not quite as weak as was expected and feared, which means that they can, and have been, spun as a triumph of resilience and recovery.

But the numbers are still pretty dire – sluggish at best – with the certainty of worse to come in the March quarter, just in time for the budget.

ScoMo has brought precious breathing space as he wrangles a Clayton’s solution – the stimulus package that is not a stimulus package.

Indeed, Morrison and his followers seem to have trouble even mentioning the word stimulus – perhaps it is considered too Ruddish. The stimulus devised by Kevin Rudd, his Treasurer Wayne Swan and the Treasury Secretary Ken Henry in 2008 was certainly very expensive, very ambitious and, in some details, flawed – but it kept Australia out of recession – one of the very few countries in the world to do so.

This, of course, has to be Morrison’s overriding objective, and for all his talk of a moderate, modest, measured response, there can be little doubt that he will do whatever it takes to achieve it – if we need more pink batts, more school halls, they will be thrown into the mix as required.

The frazzled Josh Frydenberg has already upped the ante to promise billions rather than millions – which more or less admits that his beloved surplus is about to become collateral damage. He will reluctantly kiss it goodbye. It will be gone, but not forgotten; remembered affectionately in the heritage-listed ‘Back in the Black’ coffee mugs now withdrawn from the Liberal Party website, and his own unforgettable epitaph; “We’ve brought the budget back to surplus next year.”

Ah, what might have been…

For the moment, the emphasis is on restoring confidence – reassuring a nervous public that the government is in control. And given Morrison’s approach last week, which swung between the mindlessly stubborn, over his indefatigable mendacity about sports rorts, and the weirdly inconsistent, in finally admitting that yes, he did ask Donald Trump to invite his pentecostal parson Brian Houston to a state dinner, making the sceptical trust him is not going to be easy.

This is particularly the case when he has just been given an unwelcome reminder of an earlier stuff up.

The defence chief, Angus Campbell, told the senate that he (speaking for the defence establishment) had been ‘discomfited’ by Morrison’s advertisement boasting of his belated panic moves, after he had rushed back from his secret Hawaiian holiday to deal with the escalating bushfire crisis. ‘Discomfited’ – means not just ‘made uncomfortable’, but defeated utterly, routed, frustrated, thwarted and/or foiled, according to my dictionary.

Hardly a ringing endorsement when ScoMo is about to embark on a new and even more daunting venture. But at least he is working from his strong suit – marketing.

The overwhelming need is to instill belief – to give the voters faith in the present and the future so they can, in Morrison’s words ‘stick together’ like some kind of national cling-film convention. And in this sense the actual policies are less important than the pitch. But there still has to be some semblance of substance in the sizzle, and this is where it gets tricky.

Morrison and Frydenberg have effectively ruled out a cash splash – there may be something for pensioners and other retirees, but no general bonanza. And there will be no big spend on infrastructure – the former for reasons already mentioned, and the latter on the grounds that $4 billion in the infrastructure pipeline is quite enough for the moment – any more would take too long to have a measurable effect.

There have been suggestions that smaller shovel-ready projects on a local level might be a sound move – for instance, funding a crash program for councils to fix potholes in the nation’s roads would be labour intensive, relatively cheap and hugely popular. But that is not the kind of headline ScoMo is looking for.

Much of the speculation last week was around incentives for business, in the form of direct grants, tax cuts or both, but that is being sold not in terms of procuring new investment, but just allowing companies to hold the line until the crisis abates and conditions get back to normal – worthy no doubt, but hardly stimulating. It will not give a feeling of comfortable warmth in the hip pockets of workers, which is really what is needed.

Morrison says, correctly, that the coronavirus crisis is not like the GFC crisis, and requires a different remedy. But as with almost all economic problems, the root cause is psychological – if enough people remain upbeat, they will probably drag the economy along with them. And obviously at present the populace is decidedly pessimistic; as the demented toilet paper chase has shown, the first and automatic reaction is to panic, to stick the cash firmly under the bed and keep it there until things improve.

And howevermuch Morrison and Frydenberg can do to get the supply side moving, to encourage business to invest and innovate – something which it has singularly refused to do, even when conditions have been relatively benign – this will not help, unless consumers are prepared to spend their money on the goods and services companies can provide.

This was the basis of Ken Henry’s insight in 2008 when he advised Kevin Rudd: “Go hard, go early, go households.” And it worked. Morrison says it would not work this time, and he may be right – certainly he has a far smaller arsenal than the one available to Rudd. But he will have to do more than just mouth the usual platitudes about how his stable and steady plan of management means all will be well.

The public is already unconvinced, and the more ScoMo shouts from the cockpit: ‘there is no cause for alarm,’ the more eager the passengers are to don their lifejackets and crowd towards the nearest emergency exit.

His government has got through the December accounts, but the March figures will be worse, and those in June may be truly horrendous.

It will be a long time before he can declare victory and leave.

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  1. Marketing.
    Having spent many years of my working life in marketing / sales, I always found that being honest and forthright and openly addressing any complaints or issues to find a satisfactory solution was the ideal method of achieving success.

    Hiding problems, misrepresentation, untruths were a ‘sure-fire way’ to disaster for both the clients and the marketers.
    The public perception of “marketing” as some dodgy, underhanded activity has only been enhanced by practitioners would find it difficult to come to grips with total honesty.

    Where ‘Scotty from Marketing’ fitted into the professional profile I am unsure.

  2. The one thing we all know now about anything that the unaccountable Scotty from marketing promotes!
    It will always be, too little, too late and always, always directed to those that do not require any assistance!
    It will have an LNP video, with a Liberal party donation button, a catchy jingle and slogan, but thats about it!
    The stimulus, if it can really be called a stimulus, will just be another in the long list of LNP failures of the last 7 wasted years! Abbott/Turnbull/Morrison the ATM of economic failure?
    This LNP ATM only dispences money out in massively corrupted and totally unaccountable rorts.
    The LNP’s only concern these 7 years have always been to those very well off, that really require no assistance. The real reason the economy has failed.
    Cost of living increases into the stratosphere for families, especially housing cost.
    Causing those that are now living in LNP induced economic dire straights to go without proper pay increases, their wages systematically stolen on a scale that defies belief, their penalty rates now taken by the LNP, sending the economy into terminal velocity free fall!
    The nation is trapped in a ponzie scheme of massive mortgage debt and rental nightmare, there is nothing left to spend.
    It’s the housing prices that have destroyed the economy!

  3. Once again the Morrison Government has missed falling on its sword but a stabbing pain is still there in the community it serves. A medical report is yet to follow of microbes and viruses and an explanation of what is yet to be cut out.
    And now to finances and the national accounts.

  4. Scotty ‘s stimulus wouldn’t include sporting grants by any chance….for those groups that were rorted out of receiving what should have been their’s from the get go in line with Sports Australia’s Merit Listing.

  5. It will only be under sufferance that the LNP offers anything to those on Newstart or pensions. They are ideologically incapable of believing that they have any obligations to look out for the interests of the poor and disadvantaged. Their focus is on those who have, allegedly, plied their abundant talents artfully and skillfully and turned those talents into success and they look with scorn upon the poor, who are, when all is said and done, been the architects of their own misfortune. Whatever the stimulus package it, is will delivered with the maximum possible artifice and spin and, I will bet, the over-arching comment that the economy had been strong until the bushfires and COVID-19 – so Scotty from Marketing and Frydenburg will still exonerate themselves from blame for the parlous state of the economy under their watch and before the latest threats. Scotty can only spin because that is his raison d’etre. And I have no doubt that where the LNP begrudgingly copy anything Rudd did, they will insist they are doing it better.

  6. To market.. to market… to buy the way out
    but never where it’s needed. A discomfort
    isn’t what our run-away mouthpiece thinks
    it is but a damn whole far worse than that.
    Spit & spittle won’t work. And while I’m at
    it, we’d do well to attend ‘Purposeful
    Collective Action’ on Sat 21st March at
    The Channon Hall, 5 Mill St at 2-5PM.
    Annie Kia will be sharing what we’ve
    learned about campaigns to help with
    decision making re: oil/gas/coal in our
    region & beyond.

  7. Rudd , Gillard , Rudd were infact the most incompetent labor leaders in history !!
    And thats a fact .. !! As for welfare governments
    Do not have any money , cannot offer something
    You dont have ..welfare is not a endless pit !!

  8. Forget the chanting on welfare….. it’s not
    a ‘pit’, it’s ‘a pittance’ that gets paid &
    those who get a morsel are the ones who
    immediately spend it to send it back into
    society of local businesses bypassing the
    share-mongering & polly-friend ponies.
    For those interested in what needs to be
    done for the country check out ‘School
    Strike For Climate Change’ Friday 15th
    May in Lismore starting at 11 am. That’s
    a call for Northern Rivers strikers &
    supporters of a world well worth saving.

  9. Of course they spend it back into society
    Stefanie what are you thinking, its a pittance? Not bad .considering most welfare recipients have not
    Worked one day in the fortnight to receive
    Funding to survive all at the expense of the
    Taxpayer’s, blessed are the recipients stefanie
    How many countries worldwide have the social system Australia has ? 70 % of my taxes go towards welfare . It has doubled in the past decade
    We need reform and how …and i know that there
    Are genuine recipients that need welfare no Doubt the Homeless !! God bless you all .
    Once again it is not a endless pit , and if the resources industries are to cease , you will have to at best half welfare .. which will be disastrous!!
    Incidentally stefanie and say with respect as i always do !
    Could you please give a example of a Global Warming emergency worldwide ? You talk the talk
    Please give a walk the walk response..no spin
    Stefanie..! Just a clear answer ..

  10. Tweed, you are correct.

    It is the housing/accommodation prices that have ruined the economical capacity of many workers to spend at businesses and “stimulate” the economy.


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