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Remember the “week of terror” the Morrison government endured when Parliament was dissolved in late November, with the Angus Taylor scandal and the failure of key union legislation to pass?
In retrospect, this looks like a minor incident compared to the wave of trouble that is set to roll in when the 2020 parliamentary session begins next week.
Look what happened after that.
Bushfires that were already burning at the time became more severe and turned into a political liability as Scott Morrison was widely criticised for his missteps and the government’s handling of climate change.
Doubts about the economic outlook remain deep.
The budget surplus is expected to fall to $5 billion after the December update and could disappear entirely.
The Wuhan coronavirus emerged suddenly, stretching its tentacles — the length of which is still uncertain — in every direction.
The Taylor affair, involving an allegedly forged document, has been overshadowed by controversy surrounding Nationals deputy leader Bridget McKenzie’s sports fraud (although that matter has yet to be resolved).
Parliament will reconvene in the final month of what has been a terrifying summer for the country in general and Morrison in particular.
He and his ministers have to deal not only with substantive and political issues but also with the uncertainty they bring.
Of most concern and immediate importance is that no one is sure what the impact of the coronavirus will be on Australia. The number of local cases may be quite small, but the impact could be widespread and far-reaching.
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Clearly, Australian authorities had preparedness and protocols in place to deal with such an emergency. Yet this week the government seemed to be caught off guard.
Cabinet’s National Security Committee met, but the government’s initial response was unexpectedly slow and chaotic.
For example, it took a while to announce plans to evacuate the hundreds of Australians trapped in Wuhan.
Education Minister Dan Tehan has sharply criticised some schools for asking students who had recently been to China not to return, only to suddenly change policy when the government’s medical advice changed.
As the government was busy organizing charter flights, it controversially announced it would quarantine returnees on Christmas Island for two weeks.
Critics include the Australian Medical Association and the opposition, as well as some in China who are considering whether to accept the flight proposal.
Home Affairs Minister Peter Dutton insists there will be no quarantine beds available on the mainland (which may depend on how hard the government tries).
The Christmas Island plan is provocative. Asking potential travellers to sign a self-isolation declaration would surely be enough. But the government may fear a domestic backlash if the precautions are not tough enough.
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Both the bushfires and the coronavirus are set to hit Australia’s tourism industry hard.
The fires have not affected major attractions for international tourists, such as central Australia and the Great Barrier Reef, but the disaster has been widely reported abroad, with images captured on television. So it’s no surprise that Australia is suddenly no longer looking like a desirable tourist destination.
The Chinese government was quick to cancel group tours after the coronavirus outbreak. Restoring normalcy to Chinese trade is much further away than people realize – it will be a matter of time and will also depend on how this health crisis develops.
The virus is already having an impact on Australia’s education export industry, which attracts large numbers of students from China (who pay high tuition fees).
Universities are scrambling to make arrangements for Chinese students who missed the first semester of the academic year, a sharp reminder of a wider problem: Australian universities’ heavy reliance on foreign students, especially from China.
The full impact of the coronavirus on the Australian economy will take some time to be known.
Henry Cutler of Macquarie University’s Centre for Health Economics Research said if China contained the virus relatively quickly, the knock-on effects on us would be small, but if Chinese authorities struggled to contain the virus, “the Australian economy could be severely impacted”. “Given that China is Australia’s largest export market, slower GDP growth in China could reduce our exports.”
The consensus is that the impact of the pandemic on Australia is likely to be limited in the long term, but that is not the case in the first and second quarters of 2020. Whatever the impact, the pandemic has come at an inopportune time – just like the impact of the fires, it will hit a weakened economy hard.
The economic growth rate was revised down in the December budget update. The Dialogue magazine concluded that Just released survey India’s economic growth has been below 2% for the past three quarters and “will remain at or below 2% for at least the next year, which would be the longest period of low growth since the recession in the early 1990s,” said one of 24 economists from 15 universities.
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The government has repositioned itself to surplus during the bushfire crisis. Having previously confidently declared the budget would “return to surplus”, it now says its priority is bushfire relief and recovery, with Treasurer Josh Frydenberg making no predictions for that.
That is appropriate, but any bragging rights the government has seized prematurely will be lost if the budget is in the red by mid-year. Just as importantly, a worse-than-expected fiscal situation will result in less money for other areas in the May budget.
Meanwhile, before Parliament resumes, Morrison must resolve the issue of McKenzie’s future, deciding whether to remove her (should he do) or keep her.
If she is dumped, the Nationals will be busy in the first few days of this week getting their house in order – electing a new deputy (David Littleproud would be the obvious choice) and leader Michael McCormack reshuffling his front bench (the best way would be to promote Darren Chester back to cabinet and get a new female senator on the junior front bench).
Even if McKenzie steps down, the opposition will still have enough ammunition to keep the corruption issue going for some time.
Firing Ms McKenzie could spell trouble for the Coalition, with some Nationals blaming the Liberals for her downfall. But if she stays on, the government will suffer huge losses.
No wonder Coalition backbenchers are unhappy and anxious when they return to Canberra and hear complaints from their constituents.
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