Opinion

John Hewson
Morrison leads a can’t-do government in a won’t-do country

Is Scott Morrison’s latest slogan – “can-do capitalism” – simply an overarching abrogation of his responsibility to provide good government in our national interest? Essentially he wants to leave it to market forces, to the private sector, to meet the challenges his government faces, thereby hoping to wedge Anthony Albanese and the opposition by somewhat hypocritically tagging them as “Big government”, “Socialists”, “Interventionists”, “Regulators”, “Mandators” and the like.

There should be little doubt that Morrison can pivot. Expect more slogans to come. He clearly demonstrated this flexibility in response to the pandemic. He and Treasurer Josh Frydenberg had barely uttered “Back in black” than they were out there spending and regulating, ostensibly to cushion the economic and social impacts of the medical response to Covid-19, built on social distancing and significant restrictions on various sectors and freedoms. The Morrison government soon became one of the highest-spending and most intrusive governments in our history. Yet this hasn’t stopped them from attempting to so tag the opposition, still referring back to the Rudd government’s response to the global financial crisis.

It has always been an identifying element of so-called Liberal–National ideology to advocate for reliance on market forces and private initiatives when and wherever possible, claiming to believe in small government and low levels of regulation. Yet this has always implied that government has a clear responsibility to set the legislative, regulatory and broader policy framework within which market forces were to be unleashed to work to their full potential in terms of enhancing efficiency. Moreover, it was recognised that there were occasions on which it could be said that markets had failed to deliver socially and politically acceptable outcomes, necessitating the government to step in and adjust these outcomes to be more acceptable. A particular focus here is on what economists call externalities, of which there are “good” and “bad” examples. The role of government in this model was to collect and accentuate the good and to minimise the bad.

Clearly Morrison doesn’t get the significance of the framework – or simply doesn’t want to get it. The market and the private sector want certainty to invest. They need to minimise the risks of a sudden change in policy and more than that, they need policy detail to make decisions.

Policy development and implementation have been the defining weaknesses of the Morrison government. In this respect it is worth recalling Morrison’s initial briefing to the public service, condescendingly instructing them that he saw their role as being confined to “service delivery” – that he and his ministers were responsible for policy development. This was a pointless and meaningless statement  then as it is now.

Morrison won’t be able to push his desired contrast between his market-based approach and the bigger government response that he likes to try to tag the ALP with, because to work well, markets need more than a little government involvement.

Globally, “can-do capitalism” can be blamed for undermining democracy and can be seen as a major cause of climate change. Unfortunately, businesses have often “gamed” the capitalist system, skewing benefits to themselves and shareholders at the expense of other stakeholders. Governments have often corrupted the capitalist system by governing in the interests of a few of their mates and donors – what is called “crony capitalism”.

Clearly it was unregulated, unconstrained capitalism that governments encouraged to drive the Industrial Revolution, powered by fossil fuels. This ignored the bad externality of carbon emissions and other social and environmental impacts, which have produced the climate crisis that now challenges governments globally with the threat of catastrophic consequences for the planet and our lives on it, in the event of failure.

With this background, it is instructive to take a look at what Morrison actually said about “can-do capitalism”.

In a question and answer session following his recent speech to the Victorian Chamber of Commerce and Industry, Morrison claimed, “We are primed and ready to go in this country. We’re set up, but we’ve got to make sure that governments in Australia remember that we are a can-do capitalist country, not a don’t-do government’s country.”

It seems his motivation in making this statement was more about a desire to test an election message about the comparison between the LNP and the ALP, hoping to wedge the latter, rather than to document the detail of his can-do capitalist approach.

Indeed, Morrison went on to claim that at “events” he attends overseas people will come up to him and say Australians are “hopelessly” optimistic. “And I go, ‘Yes,’ ” he said. “Because we see the world differently and we look at things like climate change and go, ‘We can deal with that.’ We’re not going to be beaten by it. We’re not going to get depressed about it. We’re going to fix it, because that’s what you do in Australia. You don’t whinge and whine about it. You just get on with it and you get through the challenge.”

How realistic does this sound? Can you ever imagine world leaders wanting to be lectured along these lines? Can’t you just see Joe Biden, Boris Johnson, Emmanuel Macron and Angela Merkel holding their breath, leaning in, to hear the wisdom of  “that fella Down Under” as he struts and smirks his way through his description of the Australian character?

Morrison ended that meeting, obviously not paying much attention to his own words, when he said, “The pandemic has taught us not to take our economy and our freedoms for granted. And, so, the choices we make about that and the importance of the leadership that is needed to protect our country, to ensure that our economy is secured and our recovery is secured, I think is the big reminder for me.”

Surprisingly, he failed to then allude back to his earlier remarks, where he could have said, “I hereby abrogate all responsibility for that leadership and am leaving our response to the market, to can-do capitalism.”

It is difficult for me to accept that Morrison is still not taking the climate crisis seriously. Although his government signed the agreement reached at the United Nations Climate Change Conference (COP26) in Glasgow, which included a pledge to regularly update emissions reduction commitments, Morrison has already backed off on this promise. His actions will only compound our poor global standing as the leading laggard on climate action, having had the hide to parade around COP26 with his shallow commitment to net zero by 2050, developed in high farce with the Nationals, and with no clear policies or pathway to get there, while deliberately misleading others as to our history of emissions reductions.

It should be recognised that the declared targets of the Glasgow participants are not nearly enough to keep the world to a maximum warming of 1.5 degrees Celsius over pre-industrial times. As things now stand, even if existing commitments are met, the world will still warm by 2.7 degrees on some models. It is still all to be done to save the planet.

Climate change is now an existential risk. Australia simply cannot downplay its essential role in this as one of the world’s largest miners and exporters of fossil fuels. So many countries, particularly the island countries that are disappearing with sea level rise, are looking for a lead from Australia on this. It’s hard to imagine that this could ever occur when you see the Nationals celebrating the final edits to the Glasgow communiqué, which soften the wording on coal.

Morrison simply should not be allowed to fob off this challenge with some vague reliance on so-called can-do capitalism without details of the essential regulatory and policy framework to provide the confidence that it is achievable. Otherwise, Morrison leads a can’t-do government in a won’t-do country.

This article was first published in the print edition of The Saturday Paper on Nov 20, 2021 as "Market farces".

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John Hewson is a professor at the ANU Crawford School of Public Policy and former Liberal opposition leader.