Contain the virus and support the vulnerable
The government’s response to coronavirus has prioritised businesses over the most vulnerable.
Yesterday, the Reserve Bank of Australia announced that it would commence Quantitative Easing (QE), an unconventional monetary policy which hopes to stimulate the economy by printing money and purchasing government bonds. Putting aside technicalities, the commencement of QE — which was first pioneered by America’s Federal Reserve in response to the GFC (to questionable effect) — seems a significant indication that the government, or at least the wonks running the bureaucracy, are scared about the economic implications of the COVID-19 outbreak.
They have every reason to be worried. The past few months have already brought about significant economic decline, with the outbreak seriously affecting production and consumption in the People’s Republic of China and, thanks to globalisation, the entire world. Alongside declining demand for products and a corresponding decrease in trade, supply decreases have increased costs, particularly of goods essential to global supply chains, which has created a vicious feedback loop where demand and net output have declined in turn. Australia is about to experience a similar dent in production and consumption, with workplaces and shops preparing to close down indefinitely, and an end to our 28 years of uninterrupted economic growth seems certain.
But as bad as general economic malaise may be, words like output and statistics like Gross Domestic Product don’t really mean anything. Indeed, what’s bad is not the scoreboard, but what it reflects about the lives caught up in the system it tallies. And there are countless people who are now staring down the barrel of a chaotic recession which may well bring about permanent and fatal deteriorations in our quality of life.
I think, in particular, of people who work in demand-driven industries, whose entire business models depend on willing consumers participating in commercial exchanges. I think, in particular, of casual workers, employed by businesses with no reason to roster them on and with neither the savings nor selflessness to compensate them for lost shifts. I think, in particular, of people who do sex work, who work in retail, or hospitality, or who tutor people in-person from time-to-time. I think, therefore, of students, who overwhelmingly work demand-driven, casual jobs, and who are likely to be without income for an indefinite period of time.
Stimulus measures announced so far do little to reassure or provide for these students and workers. Sure, “support for business investment” and “cash flow assistance for businesses” might theoretically trickle down, but, aside from measures to maintain the employment and wages of apprentices, there is nothing in the specific policies which seem all that helpful to those hit hardest by this crisis. Grants to businesses will help their owners stay afloat, but there’s nothing requiring them to use the extra money to pay workers’ wages. Incentives to invest make no sense when there’s no captive audience willing to spend on and provide a return to investments. And, in general, the failure of trickle down mechanisms is so well-established that I won’t bother canvassing them.
Stimulus payments to households also leave a lot to be desired. Putting aside the obvious problem — that a $750 payment to Newstart recipients already living under the poverty line simply isn’t enough — the one-off stimulus payments also aren’t going to find their way to many of those who really need it. While the usual Liberal favourites — pensioners and veterans — get a handout, students and casual shift workers have been totally overlooked. The Commonwealth has not announced a single policy so far for those on Youth Allowance, and, even if they do, eligibility is already so constrained that only full-time, domestic students would stand to benefit anyway. The strict eligibility criteria means that very few students even receive Youth Allowance to begin with, and the inherently invasive, bureaucratic, and slow process means it’s unlikely payments will be increased or updated in time to make up for decreases in shifts and projected income. And, as if all that weren’t enough, students considering dropping to part-time study, or dropping out altogether, will lose this vital income stream, forcing them to decide between an income or being a guinea pig in an overpriced online learning trial.
In sum, the government’s “stimulus” provides a lifeline to business owners and pensioners but absolutely nothing for people whose income is at serious threat. Even without the price increases and supply shocks we’re likely to see, this spells serious trouble for many. While the impacts this has on study and willingness to undertake higher education may seem distant, an inability to purchase essential goods and services is an obvious and immediate threat. How are shift-less retail workers going to get groceries? How are sex workers going to pay rent? How the fuck are people who work pay cheque to pay cheque going to look their children in the eye to tell them there’s no money left?
Without pressure, future stimulus measures won’t make much of a difference either. If we’re lucky, the keepers of the purse might throw some scraps our way; a one-off payment to Youth Allowance recipients would at least show that they have about the same contempt for students as they do for the elderly and unemployed. But in reality, the Liberal government — like every Labor government since Hawke — cannot move past fallacious neo-liberal economic assumptions, making a genuine response unfathomable. The economic and biological crisis didn’t start today, or last week, or even in January; it started decades ago, when the Right won (an element of) the culture war and successfully structured the economy around an obsessive focus on minimising government spending. We have long suffered the consequences of this broken system, but sadly it seems that suffering is about to be more acute and obvious than ever before.
With some estimating that up to 60 percent of the population might be affected by the COVID-19 outbreak, the impact on hospital resources could well prove catastrophic. We simply don’t have the space in our Intensive Care Units, or beds in our wards, to deal with the estimated 5% of those cases which would be critical. We don’t have the ventilators to deal with the thousands of people who will be choking on their last breath in waiting rooms. We don’t have the staff to manage the chaos. We can talk about flattening the curve as much as we want, but we’re going to have to turn the curve into a pancake if we want to keep it within our present capacities, an outcome which seems impossible now that (as of yesterday) NSW is experiencing exponential contagion.
Of course, it didn’t have to be this way. Activists have protested and bemoaned every cent cut from health funding, but the government and their monied supporters simply didn’t care. Doctors warned the government that our system was already in crisis, that we already were failing the sick and vulnerable, but they simply did not listen. And smart economists, not taken in by the ideological tricks of neoliberalism, told them that they could increase investments in essential services and still have plenty left over to sustain a generous social security system for all who needed it, but they simply choose to do otherwise so they could prioritise their economic agenda and class interests. Indeed, the government certainly has the capacity for a comprehensive and sufficient response to this emergency, for instance by printing money to pay off debts which funds these schemes (or QE, but directed to programs which help people, rather than shareholders).
We still have a chance to reverse this legacy and secure our material and biological interests for the next few months. The University of Sydney Students’ Representative Council has started a petition which demands the government implement a number of essential policies and programs; anything short of those policies and programs will lead to either a large outbreak or significant economic decline or both. These demands implore the government to:
- Drastically increase funding for hospitals and medical response, including by:
- Significantly increasing our supply of essential resources like ventilators, testing kits, and antiviral medications,
- Underwriting all staff expenses at hospitals (including significant overtime for doctors, nurses, etc.), so that doctors / hospital directors do not feel constrained by costs and can respond as effectively as possible.
- Establishing make-shift testing centres in public areas
- Establishing distribution centres for medicines, masks, soaps, sanitiser, etc.
- Developing plans to repurpose hotels and other centres as quarantine and hospital beds
- Immediately commencing construction of new hospitals and expanding existing hospital areas.
- Providing free flu shots to all.
- Establish distribution centres across the country which provide free food, sanitary items, etc.
- Require and subsidise paid special leave for all workers in all industries.
- Immediately relax eligibility criteria for Youth Allowance so part-time and deferred students are eligible.
- Significantly increase all welfare payments, including Newstart, Youth Allowance, and Rent Assist payments, and devise other strategies for ensuring casuals and other economically precarious people have access to an income, can pay rent / secure accommodation, and acquire essential goods and services.
- Undertake urgent reforms to the National Disability Insurance Scheme so that people with disabilities have assurances of care and medical supplies
- Immediately increase funding to tertiary education institutions so they have the liquidity to bear any costs incurred while responding comprehensively to biological concerns, compensating students for displacement, and securing learning quality and staff conditions.
- Extend / remove the Census date for semester 1 2020, and waive HECS fees for any students who cancel semester 1 enrollment.
- Freeze all rent increases and put a moratorium on rental evictions.
- Abandon their commitment to a budget surplus in the next 2-3 years, and undertake significant money printing and borrowing so they can fund significant stimulus and subsistence strategies.
- Reallocate all staff and resources in private hospitals to the public system, including by opening access to wards and bed-space in private hospitals.
- Deploy significant staff and resources to enable home nursing care, and ensure rural areas, Indigenous communities, and nursing homes have capacity to help the most vulnerable.
- Institute social distancing as much as possible, including by closing schools and government workplaces, but without utilising the military, police, or authoritarian / punitive responses in so doing.
I urge all students to sign the petition and join our broader campaign to achieve these health and economic responses. The fate of countless people depends on us defeating the right-wing belief that people are expendable and that money is a scarce, sacred entity to which only the powerful should have access. This is not a new fact, and this is not a new challenge, but it has never been more stark or critical than now. Rising to this challenge will not only secure our immediate future, but our entire lives, bringing about the paradigm shift needed to solve the myriad existential threats faced by our generation. We don’t just have a world to win, we have a world to save.
Liam Donohoe is the President of the University of Sydney Students’ Representative Council.