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Australia’s Federal Policy Response to the Coronavirus Crisis

To coordinate a nationwide response to the threat of the Covid-19 pandemic, and the resulting impact of Australia’s first recession in nearly thirty years, on March 13 the Morrison government convened the National Cabinet. This comprises the Prime Minister, Scott Morrison, and the eight leaders of the States and Territories, and formally replaced the Council of Australian Governments as the principal body for coordinating national policy implementation in the Australian Federation. A critical policy analysis of the emergence of these new institutional structures demonstrates their significant influence on the federal government’s policy response to the pandemic.The initial political stability enabled by this restructuring allowed a dramatic reversal in fiscal policy. After previously claiming to be on track for a budget surplus, the federal government undertook massive deficit spending. Central to this stimulus has been the ‘Jobkeeper’ wage subsidy to over 3 million workers. In monetary policy, the Reserve Bank of Australia cut interest rates to record lows, and embraced Quantitative Easing for the first time.While these policies received bipartisan support, the Morrison government has indicated its intention to shift back towards the neoliberal economic policy approach favoured by the Liberal-National Party (LNP) ruling coalition. There are also concerns over a potential decline of the role of Parliament in ensuring government transparency and democratic accountability, and of deeper economic inequality, as a result of the policy decisions of the Morrison LNP government in dealing with the ongoing crisis. Divisions between the Commonwealth government and the states over the duration of quarantine lockdowns and border closures strained the National Cabinet at times. Debate over the long-term policy response to the economic turbulence wrought by the pandemic is also set to dominate Australian politics towards the next national election, due by 2022.