Prime Minister, Hon Scott Morrison MP has stated on many occasions that the global coronavirus pandemic has dealt Australia both a health crisis and an economic crisis.
Accordingly, the federal government – together with state/territory governments through the newly-formed yet highly-effective National Cabinet – has been devoting an enormous amount of resources to addressing both challenges.
Now that there are early signs that the threat posed by the pandemic in Australia is easing, the attention of business – if it hasn’t already – is turning to what risks and opportunities involving government will exist in the coming weeks and months.
On the economic front, the Morrison Government, in a significant departure from its centre-right position on the political spectrum, has embarked on what has been perhaps the biggest set of spending initiatives in Australian history, culminating with the announcement of the $130 billion “JobKeeper” wage subsidy initiative late last month.
The JobKeeper program is one of several measures designed to cushion the catastrophic impact the coronavirus is having on the economy. The Government has also announced financial support packages for the tourism industry, aviation and regional media outlets, among others.
Looking ahead, there could be even more spending by the Government to try to keep money in the pockets of consumers and Australians in jobs, but, depending on how much longer the current major restrictions on the movement of people exist, there will come a time when the spending will stop and the Government will commence implementation of a plan to pay off what will be a sizeable public debt.
From this point onwards, the risks to business relating to regulatory and legislative change will markedly increase. Commentators have been claiming that the fastest way to economic recovery will be through economic reform. Such changes will, inevitably, leave some industries worse off – and it will be at the discretion of the Government which industries may be able to cope with such change. The other medium-term question – even given that conservative governments have, traditionally, been reluctant to go down this path – is if any taxes will be increased and/or if new taxes or levies will be introduced.
In a potential post-coronavirus political environment, the most effective way for industries and businesses to address these increased risks is to ensure they have existing relationships with key political and other government stakeholders. Those that do should be far better placed to manage – and minimise – these risks.
– By Hamish Arthur