Coronavirus: ‘Ideological constraints’ are out the window, where they belong

Labor was pilloried for its GFC response, yet the Coalition has dwarfed its spending.

Once the economic crisis passes, Treasurer Josh Frydenberg might face ‘ideological constraints’ again. Picture: AAP

The day after the truly historic $130bn JobKeeper package passed through both parliamentary chambers, Josh Frydenberg said: “During times of economic crisis, there are no ideo­logical constraints.” That may be true, but ideological constraints do play a part in how voters react to major change. Indeed, it is how the political fallout from it is often assessed.

Depending on the challenge at hand, how the public reacts to the measures adopted is at least in part coloured by the partisan persuasion of the politicians making the big decisions.

As you continue reading, ask yourself: how differently might the reaction have been to Labor rushing so much money out the door, even with all the same virtuous goals driving the ­decision-making?

Coalition MPs weren’t so generous to Kevin Rudd and Wayne Swan when it came to “dismissing ideology” during the global financial crisis.

Instead, they claimed it was Labor’s penchant for profligate spending that saw them rush too much money out the door too quickly. Yet the quantum of that spend was a mere fraction of what is getting rushed out the door now.

And the attacks became even louder when the implementation of the GFC spending regularly was found wanting.

Let’s not forget that while the Coalition is keen to dismiss ideology as irrelevant right now, sections of its right flank do not entirely agree with the approach being taken. They may be minority voices, but there are rumblings about the size of the spend.

If the implementation phase becomes problematic, you can bet on silent sceptics suddenly finding their voice. Which is not to suggest that the spending now isn’t ­necessary to prop up the national economy.

In the months and years ahead, you can expect to hear a lot from Coalition MPs bragging about how they saved Australia from economic ruin.

Swan and Rudd said similar things in the aftermath of the GFC, claiming they saved Australia from recession, and in the process saved tens of thousands of jobs.

The Coalition took issue with that at the time, and it still does.

It is difficult to prove (or disprove) a negative. Which is why both sides stick to their ideological guns, arguing their cases.

The reality is that while ideology should be put to one side during a crisis, it is hard to separate what voters know and think about major parties from the way they react. And those realities become only more dominant the further the crisis fades into the background, and the fallout is assessed and picked at.

I’m not sure Labor could have done what the Coalition has done in this crisis without incurring a backlash from its base for not going further, and — more likely — from conservatives for spending too much. In time, the criticisms likely would have found traction with the public, just as was the case in the aftermath of the GFC.

That’s because, fairly or unfairly, the Coalition is viewed by the voting public as the better economic manager. Labor is accused of shooting from the hip when it comes to spending. The Coalition acting counter to assumptions that it doesn’t splash cash is more easily forgiven when it does.

Just as I question whether the Labor Party could have spent what Scott Morrison and the Treasurer have during this crisis, it is unlikely the conservative side of politics could have successfully achieved in the 1980s what Labor did — the most profound micro-economic reforms this country has seen.

Bob Hawke and Paul Keating floated the dollar, embraced tariff reductions, struck an Accord with the union movement and put into law many of the recommendations of the Campbell review — a document, laying out how to ­modernise the Australian economy, that had sat gathering dust on John Howard’s bookshelf during his years as treasurer.

Had the Coalition tried to do what Hawke and Keating did in the 80s, it likely would have run into serious roadblocks from the union movement. And Labor in opposition would have been far more critical of the reforms than the ­Coalition was. Which is not to suggest that everything Hawke and Keating did was bipartisan. It certainly was not.

Mugged by the economic reality of the times in government, Labor broke from its traditions and presided over the most important modernising changes to our economy in a century.

The coronavirus crisis silenced those within the government who attacked Rudd and Swan for spending too much during the GFC: a fraction of the spending we’ve seen this week. A vocal critic at the time was a callow new MP named Scott Morrison. Fast forward to today, and he’s a prime minister who’s enjoying a record-­breaking bounce in his approval rating for the profligate spending he has authorised — spending funded by debt; spending that has blown budgets for years to come; spending that ensures Australia won’t return to net zero debt for a generation, if ever.

But that doesn’t matter right now. Not in the midst of the greatest economic threat since the Great Depression. That descriptor, incidentally, was the same way the GFC was referred to when it tore apart the global economy in 2008 and 2009.

Because Australia came out the other side of the GFC as well as we did, most of us don’t see what transpired the same way populations in other countries do. That said, there is a universal recognition that this crisis is worse than the challenges of 2008-09. And there is an acceptance that the events we are witnessing unfold will reshape the world order in a far more dramatic way than the GFC did.

Morrison’s references to sovereignty in his Wednesday parliamentary address were interesting. They suggest a potential surge in protectionism over free trade for the purpose of ensuring Australia has the means to address future challenges without dependence on trading partners at times when global trade can evaporate.

How that consequence of the coronavirus crisis is debated within the Liberal Party months from now will be worth watching. With the economic crisis over or partially over, the “ideological constraints” Frydenberg referred to might again be back in play.

Peter van Onselen is political editor for Network 10 and professor of politics and public policy at the University of Western Australia and Griffith University.