Recession: A long and bumpy road ahead awaits

Scott Morrison addresses question time in the House of Representatives on Wednesday. Picture: Gary Ramage

There’s no dispute about how Australia got into this recession — the political contest is about how it gets out, how long it takes and how many jobs are created.

The politics of Australia falling into its first recession in 28 years has almost immediately moved from the devastating official confirmation and record debt and deficits to a fight over economic recovery in the months and years ahead.

The awful numbers were barely absorbed before fundamental arguments on future economic management were thrust forward by Scott Morrison and Anthony Albanese: recovery, job creation, experience, trust, restoring consumer and business confidence.

COVID-19 has changed the political rules about economic management and the sure-fire damage to a government that presides over a recession, a mammoth extension of debt through spending and a failure to produce a promised budget surplus.

The public has changed the rules because people recognise this recession is not a result of tough reforms and the one “we had to have” in the 1990s but is part of a global recession created by the coronavirus pandemic.

There is overwhelming support for how the Coalition has handled the health and economic crises. Even terrible mistakes of quarantine — such as the Ruby Princess disembarkation in Sydney and the Melbourne hotels security failure — have been set aside as leaders keep public support and faith.

Australians, according to international polling, are on top of the world when it comes to having faith in government decisions and health restrictions.

The Prime Minister and Josh Frydenberg appear to be facing less public anger over the recession than they would have if their scheduled May budget had delivered a less than credible surplus and a jobless recovery.

The Opposition Leader and Jim Chalmers see the political and economic realities of a global recession and have lifted their sights to next year, the pace of recovery and a likely ­election.

Morrison, who effectively announced the recession three months ago, has not sought to play down the grim impact of the numbers or the difficulty of suppressing COVID-19 infections while nurturing a recovery.

Appealing to common sense, he said in parliament that Australians “understood” why there was a recession as part of a global turndown and conceded it was “cold comfort” the nation was doing so much better than so many other advanced economies.

Morrison also appealed to the cautious and anxious public to keep faith in the Coalition’s “plan for the road ahead”, long, hard and bumpy as it may be according to the Treasurer, and trust the “experienced” government rather than the “inexperienced, politicising and each-way bet” opposition.

Albanese demanded Morrison produce a plan for recovery that would help the one million unemployed and the 400,000 “who will be out of job by Christmas”.

Labor’s Treasury spokesman conceded “Australians know why we’re in recession” but said the people “have absolutely no idea what the government is going to do about it”.

Morrison wants to talk about the “road ahead”.

Well, this is what is on the political road ahead.