Delaying coronavirus relief payments is April foolishness

It is becoming painfully obvious that the government is rolling stimulus spending out the door way too late.

Long queues have been forming outside Centrelink offices around the country this week. Picture: David Crosling

It is becoming painfully obvious that the stimulus spending is rolling out the door way too late. Like much of the responses to the health crisis, the government is slow with its economic package.

And it is hard to escape the thought that politics played at least a role in the timing of what is being done. When readers make their own calculations on this, consider the following: a technical recession occurs when we have two negative quarters of economic grow in a row. And we know government’s try and avoid recessions, because they aren’t great on the CV.

That said, avoiding a recession now seems very hard no matter what happens. Unless the recovery is sooner and quicker than expected, once this health crisis passes (not that it has come close to hitting us yet).

Kevin Rudd and Wayne Swan were keen to avoid a recession to, and arguably overspent in a bid to make sure they did. Labor of course denies this charge, claiming their sole purpose was to save jobs. The Liberals have long claimed otherwise. Of course saving jobs was their primary purpose, but to deny political calculations were also considered I believe is a little naive.

But getting back to this government, I equally believe politics — and a bid to avoid recession before the severity of this crisis hit everyone in the face — played a role in the timing of stimulus spending.

Initially the first stimulus package was timed to roll out the door late enough to try and save the June quarter. The March quarter was always looking like a close run thing, and couldn’t really be influenced by stimulus anyway by the time the package was being formed and would be legislated.

Then when it came time to try and seriously spend big, via the second stimulus package, the government left most changes not taking effect until the end of April. That will also hit the June quarter, giving the government the opportunity to perhaps save that quarter from also going negative.

But just look at where we are at. People literally need their stimulus support straight away. The notion that they have to wait another month or more for the changes already legislated to work their way through the system and into bank accounts is crazy stuff. Why can’t the support come immediately? I don’t want to be so cynical as to think that the government has (or recently had) one eye on trying to avoid two consecutive quarters of economic decline, but it is hard not to.

The March quarter ends in a matter of days, so even political calculations around propping up the June quarter played a role in the decision making, there is no downside politically in the government getting that money out the door days from now. And the upsides in doing so are enormous — ensuring people have the money they need to cover basic costs in a time of severe crisis.

What on earth is the need for further delays? Even cynical politicking is no longer an excuse come April 1.

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.