Flat White

A reminder: government can’t save everyone and everything.

17 August 2020

5:00 AM

17 August 2020

5:00 AM

As a collective, Australians generally dislike the government involving itself unnecessarily in our daily lives and expanding the ever-growing influence of the nanny state.

But as the crisis continues to unfold, all of a sudden there are industries and businesses coming out of the woodwork by the dozen, to appeal for government handouts and ongoing intervention by the Morrison government.

The pretext of a free market economy where businesses succeed or fail solely on their own merits has evaporated in a matter of months, along with what was left of the Morrison government’s credibility as superior managers of the federal budget.

Billions of dollars in handouts have been given to businesses and/or organisations who are now posting bumper profits or never faced a significant threat of job losses in the first place.

The Premier retail group owned by billionaire Solomon Lew is just one example. Premier is expected to deliver record profits this year of over $180 million, despite claiming millions of dollars worth of JobKeeper payments since the program’s inception.


It’s not just the corporate world taking advantage of JobKeeper to help their bottom lines. Along with some of the nation’s most elite private schools Catholic parishes have claimed JobKeeper payments for their priests  — and both the Liberal and Labor parties have got in on the act, claiming JobKeeper for some of their party staff.

This enormous government intervention has further reinforced the commonly held idea that the government will step in to save the Australian public from bad economic outcomes. After almost 30 years between recessions and a history of government intervention, it’s unsurprising that this view has become so widely held.

But as the economic crisis continues to unfold it is becoming increasingly clear that this view is as commonly held as it is wrong.

The scale and length of this crisis is enormous. Unemployment is forecast to be as high as nine per cent at the end of 2021 and there are concerns that this estimate may end up being optimistic.

In this environment, the government’s focus is squarely on the welfare of the Australian people and the protection of the productive economy.

With a finite amount of resources, not everything and everyone can be saved from enduring a level of hardship that few Australian’s under 45 are accustomed to.

Perhaps the most notable example of expected government intervention that may not materialize to the degree its proponents believe, is the housing market.

It is true that housing prices and household wealth levels are important to the Morrison government, but with a long list of productive industries needing support to spark the fires of economic recovery, it’s not likely to be the target of very large amounts of government’s limited resources.

We had almost 30 years of almost unparalleled economic luck, but it’s now a brave new world.  Ultimately, Australians need to become accustomed to the idea that the government may not be able to save everyone and everything.

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