When we started writing this piece, Brisbane was in lockdown. By the time we finished, Sydney, Victoria and South Australia were as well. Millions of Australians have already spent chunks of the last 18 months concerned for their jobs or their business, navigating the new world of remote learning and wearing the emotional strain of being cut off from the comfort of loved ones and familiar routines.
Amid all this, optimism might not seem thick on the ground.
Yet in so many ways, optimism is what is keeping us going and holding us together through strange and uncertain days. The belief that this will pass, the faith that following the rules will work, the trust in people to do the right thing by their community and each other.
Australians have shown extraordinary resourcefulness and resolve. The creativity, adaptability and selflessness of our people have set a fundamental test – and an essential moral obligation – to remake and reimagine our country so that the people who carried us through the crisis are the principle beneficiaries of an economy and a society stronger after Covid than before.
Real leadership is fundamental to all of this. Waiting around in the hope that something will turn up is not leadership, nor is living on our luck and praying it runs out on another generation’s watch. Optimism is about facing up to problems in the belief they can be solved, not pretending they don’t exist or are someone else’s fault.
The failure of national leadership in this crisis has not been an inability to react to its unpredictable parts but an inability to respond to the obvious. After 18 months, slow vaccine deployment and manufacturing, a lack of purpose-built quarantine facilities and poor public information campaigns are all avoidable failures that risk squandering the sacrifices Australians have made to limit the spread of the virus.
So why optimism, and why now? History provides a guide.
In his 2019 book, Upheaval, American geographer Jared Diamond looks at how countries have dealt with nationwide crises, and what we might be able to learn from them. He analyses how countries have survived defining upheavals like the Soviet invasion of Finland or the Pinochet regime in Chile. He concludes that national resilience stems from honest self-appraisal and determined adaptation. He says the determining factor in national resilience isn’t so much the size of the challenge, but how each society chooses to respond.
Most importantly, Diamond says countries fade when they assume they’ve peaked.
In Australia, Covid-19 helped end our finest modern economic achievement – three decades of unbroken growth. That long expansion was sparked by one Labor government in the 1980s which took the warnings seriously – that Australia risked becoming the poor white trash of Asia – and was sustained by another when our prosperity was most at risk, during the global financial crisis. That government didn’t survive, momentum was lost, and the long history-making expansion began to slowly peter out.
Now, for the second time in a little over a decade, Australia is in danger of over-achieving in the depths of a crisis and underperforming in the aftermath.
Covid-19 struck as a bolt from the blue but the recession that followed said more about the weaknesses of our economy before the pandemic than the changes inflicted by it. Long before the world had heard of Covid-19, Australian workers’ wages were flatlining, our sources of economic growth were too narrow and too uneven.
That’s why Ross Garnaut breaks down those decades into three distinct steps down: the decade of reform dividends; the resources boom; and then the dog days. In that latter period, growth was anaemic, productivity weak, and wages growth historically stagnant. It now takes an average worker seven years to increase their pay by $100 a fortnight. In the past, workers were seeing that every year or two.
Economists expect all this to get worse, not better. Treasury’s Intergenerational Report forecasts a smaller, slower, older, more stagnant economy, saddled with generational debt without a generational dividend and tied together by the expectation that living standards will be weaker over the next four decades than the last four.
Harsh music but, in a lot of respects, the same old song.
Over the past decade there has been a litany of warnings about Australia’s lack of preparedness to manage population ageing and its implications for our social safety net and the quality and provision of care. For years, policymakers, economists and the government’s advisers have been sounding the alarm bell on our waning productivity performance, the key determinant of our long-term living standards. The same can be said about many of our major challenges – not least climate change, inequality, immobility, and the growing complexity of geopolitics in our region.
On the day he released the latest IGR, Josh Frydenberg described it all as “sobering”. He seemed overawed and overwhelmed as the rhetoric of the last eight years was mugged by reality. Above all, the treasurer made no effort to pick up the gauntlet thrown at his feet.
The IGR was a call to arms that should have been answered with a battle plan, an agenda to address the challenges it laid bare. At least recognition that the shrunken, insecure, mediocre future it describes is not good enough for the people of Australia.
Instead, in an embarrassed rush, the whole thing was hastily buried.
But within days of the IGR’s release, the same warnings were echoed by some of Australia’s largest employers. In Living on Borrowed Time, the Business Council of Australia concludes that “with the prospect of a slower growing economy, record public debt, weak population growth and a tax system that will struggle to fund future spending demands, something needs to give.” The report points out that one in 20 children experience poverty, our students are falling behind on education, and we are slipping down the global competitiveness rankings on everything from investment to infrastructure.
It doesn’t begin, or end, there.
Recent years have inflicted a succession of natural disasters, from droughts to fires to floods, even a plague of marauding mice. Ours has always been a harsh landscape, but this level of extreme weather is a frightening new normal. Multi-year droughts have become more common; cyclonic rains regularly flood the northern part of our continent; and every summer sees the south-eastern forests on bushfire alert.
Our strategic and security environment is deteriorating too. Since the First Fleet, Australia has been in the remarkable position of having the most powerful nation in the world as our closest ally and strongest economic partner (Britain until 1945; the United States since). We’ve slept under a warm geopolitical blanket of safety, foreign policy clarity, trade and investment certainty. As relations between the two superpowers on either side of the Pacific become more fractious, our comfort is being inched away. China, our biggest economic partner, has imposed restrictions on our exports. For the first time, the Lowy Institute poll showed more Australians see China as a security threat than an economic partner.
All these challenges – environmental, economic, strategic – beg an uncomfortable question: has Australia peaked?
The optimists in us say no, and that’s a start. But there are two kinds of optimism.
This, from Scott Morrison at the United Nations in 2019, sums up the first kind: “You know, I want children growing up in Australia that feel positive about their future. And I think it’s important that we give them that confidence, that they will not only have a wonderful country and pristine environment to live in, but they’ll also have an economy that they can live in as well.”
Without action, it’s nothing more than an ad-man’s optimism straight from the remainder bin of handbooks for dodgy life coaches and second-rate motivational speakers.
Dutch historian Rutger Bregman describes a second type of optimism in his book, Utopia for Realists. This type of optimism is not based on false confidence, but on an honest self-appraisal of current challenges and a determined plan to address them. Bregman argues that this is an essential force that propels men and women to discover new worlds, imagine new technologies, build more-perfect communities and secure long-term peace.
This is the optimism Australia needs now: more authentic, more warranted, scaffolded by new thinking and grounded in a determination to act and lead, not watch and waffle. An optimism driven by the certainty of honest self-appraisal and a refusal to accept that the best days are behind us.
As a country we have many advantages, which this pandemic has showcased. Our extraordinarily adaptable and imaginative people, our distinctive and diverse natural environment and our enormous pool of home-grown capital built on our unique superannuation system – just to name a few. But the right kind of optimism demands we leverage not just fall back on these advantages.
This demands a different attitude to change and risk.
The alternative is a mindset built around managing decline and minimising disruption, the false promise of a vanished past or the phoney nostalgia for a world that never was.
This is now a question of generational vision. It begins by treating the national recovery as more than a snapback to a stale status quo or a faltering future. A real recovery has to bring more opportunities for more Australians, ensuring these opportunities can be grasped by more people in more parts of the country.
This means reforming early education and childcare. Cheaper, cleaner and more reliable energy. Co-investing in advanced manufacturing and the care economy and building more affordable housing. Putting training at the core of government projects and procurement; making work more secure and better paid; turning ideas into jobs and teaching our people to catch up, then keep up, with technological change; supporting effort and enterprise. Recognising full employment is about job security and underemployment as well.
But to convert optimism and aspiration into opportunity governments of the future will need to think more boldly still. Making Australia a clean energy superpower without abandoning our traditional strengths. Embedding micro-credentials into the way we learn and work. Tackling long-term unemployment and disadvantage which concentrates in communities and cascades through generations. Linking the tax and transfer system to ensure a minimum basic income for those who need it. Leveraging impact investing, superannuation and the environment, social and governance revolution. Making multinational tax fairer. Measuring What Matters – a wellbeing budget; an evaluator-general; and intergenerational reform. Improving the quality of life in our suburbs, regions and growth corridors in a work-from-home economy. Becoming a world leader in cybersecurity; enmeshing ourselves in the Association of South East Asian Nations; a more meaningful relationship with our New Zealand whanau. Delivering on Truth, Treaty and Voice and the Uluru Statement and modernising our constitutional arrangements and national symbols.
Much of what underpins and animates the task ahead is recognising and embracing the generational opportunity in technology. The technology revolution is the central question of our time. Our response to it will define how we live and how we work.
If we treat technology as nothing but a threat to traditional jobs, an attack on our way of life and a risk to our security, then that self-fulfilling prophecy will condemn us to stagnation.
Rather than pushing back, or hiding from it, Labor under Hawke and Keating took bold steps to reposition Australia in the world economy as globalisation loomed. What’s more, they took people into their confidence, they trusted Australians to face the future. That reform agenda opened up our country and wrote us our meal ticket for a generation, beginning decades of growth and opportunity.
The digital revolution will be to the current generation what globalisation was to the last. We have to embrace technology with the confidence that, if properly managed, it can help us create a better and more equal society. But only if we weave technology into a more positive and optimistic vision for the future.
This pandemic continues to show how rapidly and unpredictably and dramatically the world can transform. The challenges we face in the decades ahead are great and grave, but this year has shown how quickly we can change, how rapidly and cohesively our people can adapt.
Australia has not peaked. Our best generation is not gone.
Australians have taken this time to re-evaluate the value and optimism in their own lives. They are owed now the same reflection and resolve from their government.
Jim Chalmers is shadow treasurer in the federal parliament. Andrew Charlton is a former Labor adviser