A new era of big government is here, and government isn’t ready

The world has changed dramatically, if not overnight, then in the space of a month, and our governments appear to lack the institutional capacity to operate in that new world.

It’s hard to avoid that conclusion given the inability of Centrelink to cope with a predictable surge in joblessness and the astonishing failure of the MyGov website yesterday, falsely blamed on a denial of service attack by the relevant — if that’s the word — minister Stuart Robert.

The denial of service was to citizens trying to use a site that the government has tried to shunt us all onto for years in order to access basic services.

The government has known for weeks it faced a big rise in unemployment. The scale has only become clear in recent days as major sectors like hospitality have simply been shut down. But governments are supposed to engage in contingency planning, and lockdown and massive economic dislocation was always a real possibility.

You don’t design infrastructure — whether roads or welfare delivery mechanisms — for peak capacity, but when you know a peak is coming, you prepare.

Robert was boasting this morning that Services Australia had “surged capacity” into MyGov overnight, which prompts the question of why it hadn’t already been done and why Robert was left apparently convinced his site was under attack when any sensible planning would have identified a coming surge in usage.

In the days and weeks ahead, a failed website will end up being a footnote to the unfolding crisis, but it’s a telling example of how governments — not this government, the Morrison government, particularly, but all governments — have stripped themselves of the ability to serve communities, driven by the broad agenda of contestability, outsourcing, corporatisation and privatisation over the last thirty years.

Once that was limited to service delivery and infrastructure; now, increasingly, it applies even to policy advice, with major consulting firms reaping billions from taxpayers to serve up advice previously provided by public servants.

There have been undoubted benefits from that agenda, in the form of far more efficient service and infrastructure provision, an end to union featherbedding, revenue from asset sales and restrictive work practices and lower taxes.

But like much of the agenda of neoliberalism, its negatives have kept growing as the benefits have receded in the economic rear view mirror. In key areas governments lack any sort of institutional capacity to deliver what people need, or to protect them.

Indeed, welfare provision has focused in recent years not on serving or protecting Australians, but on punishing, surveiling and generally deterring them from trying to claim the benefits to which they’re entitled.

Elsewhere, the history of the NBN is of government having to rebuild its capacity to roll out telecommunications infrastructure, having flogged off the expertise it once had in the sale of Telstra.

The once taxpayer-owned Commonwealth Bank has been one of the primary perpetrators of the worst scandals of the era of banking deregulation. Corporatised government energy companies and privatised power firms alike have been ruthless in gaming the byzantine rules of the energy market to gouge customers.

It’s taken dramatic turnarounds in government policy to fix those problems in energy and financial markets since 2016.

Now that turnaround in policy has to be undertaken on an economy-wide scale. The government is going to be much of the economy for the rest of 2020 and, very possibly, for quite some time afterwards.

Forget deregulation — we’ve entered a world where there is nothing but draconian regulation, to the point of shuttering businesses and confining people to their homes. We’ve already entered a world where government loans will be propping up large slabs of the private sector.

Soon — hopefully — governments will be simply paying the wages of large portions of the population, and directing manufacturing and logistics to ensure supply chains providing crucial goods continue to operate.

The few remaining neoliberals hiding in the offices of the Financial Review and The Australian can hope that this will be a temporary aberration, but chances are a new era of big government has commenced, at least until an effective vaccine is available for coronavirus.

Except, it’s likely that henceforth there’ll be a permanently enhanced pandemic readiness system and critical infrastructure to go along with it. Governments need to expand their skillsets, because they’re going to be doing more in the future, and not just until this crisis ends.