“Attempting to reform labour and product markets in the middle of a depression [or a pandemic] is akin to repairing the roof when it’s on fire.” — Mark Blyth in his 2013 The History of a Dangerous Idea
Australia’s richest person, Gina Rinehart, worth $31 billion, is advocating just this in a new book titled Australia Tomorrow, reported the September 27 Daily Mirror. In a chapter in the book, Rinehart urges Australians to be “on guard” against the “ruining effects of socialism” to preserve the nation’s wealth, the Daily Mirror reported.
Specifically, she urges the federal government to restrain public spending during the pandemic.
This is her recycling of a discredited neoliberal model that has offered no credible solution to two of the biggest problems today: COVID-19 and the looming climate crisis.
It is interesting that this book, featuring prominent antipodean neoliberal thinkers, including Tony Abbott, Deputy Prime Minister Barnaby Joyce and broadcaster Alan Jones, was published during the country’s Delta outbreak in which two of the most populous states have been shut down for months.
Many neoliberals are opposed to any government intervention and want the economy to be opened regardless of the human cost.
What is Rinehart whingeing about?
The Coalition government, with impeccable Thatcherite credentials, has pump-primed the economy so that those who are locked down can pay their bills, feed themselves and their families, pay their rent and mortgages, and keep safe. Many were, and are, just keeping their heads above water. Others, such as refugees, foreign students, and those employed in casual and precarious jobs, such as delivery services, are barely staying afloat.
This largesse was taken away, reluctantly reintroduced in a piecemeal and parsimonious way during the outbreak of the Delta strain and will soon be taken away once again.
In tandem with this, to curb the outbreak the states have introduced a series of lockdowns to reduce the number of people catching the virus and dying. This has reduced the mortality rate and the number of people catching this deadly virus.
It is this that has created a ballooning deficit. This is what Rinehart and her allies are rallying against.
It is a fact that lockdowns save lives. In a country of 24 million people, around 1256 people have died from COVID-19. In Florida, where the population is a shade under 22 million, and where the state is run by an ardent opponent of state intervention and is hostile to vaccines, the death rate is unacceptably high, 54,000 and rising.
Why the difference? The Australian government intervened, but the state government in Florida did almost nothing and let the pandemic run amok.
Australia, like the United States, has its fissures of race, income inequality and climate catastrophes. The key difference is that state governments here intervened decisively to support people and we have a functioning national health system.
By contrast, the pandemic ripped through those US states run by anti-intervention governments, with the poorest bearing the brunt. Their underfunded, under-staffed public health service could not cope.
It seems ideology and self-interest triumph over good macro policy.
Like other billionaires, Rinehart has fared well during the pandemic: her wealth increased by $2.2 billion, which she prefers to remain silent about.
Her neoliberal views are not new. She inherited a large chunk of her wealth from her father, who in turn almost flew into a mountain of iron, the basis of his wealth.
In late 2012, Rinehart said in a speech to the Sydney Mining Club: “Africans want to work, and its workers were willing to work for less than $2 a day.” Meanwhile, she was “earning” $600 a second!
Rinehart warns that Australia is on the same track as Sri Lanka. Her ignorance of the economic history of that country is breathtaking.
Sri Lanka has the dubious honour of being one of the first countries to deregulate the economy, sell-off government assets and public companies, and offer tax-free havens to foreign businesses, among other controversial economic innovations.
At the same time, it has consolidated power into the hands of the executive presidency at the expense of parliament, the judiciary and the provinces. The other major party has either amplified or followed these reforms, thereby weakening even further the rule of law, transparency and accountability.
Ceylon had one of the best social indices in Asia, in terms of health and education. It was only surpassed by Japan. Now, Sri Lanka is the envy of no one.
The country’s pendulum moved from prosperity to poverty and peace to conflict due to the public purse being raided to enrich a few at the expense of the many. Once the pearl of Asia, the island is now a country that cannot grow enough food to feed its population and has to export many of the things we deem essential. The national debt is now epic.
In tandem with its neoliberal policies and programs, Sri Lanka’s political leadership has become increasingly authoritarian and democracy is becoming militarised.
Rinehart’s self-serving musings are impractical and dangerous. Using Sri Lanka as an example of where Australia is headed if it does not rein in public expenditure is not only deeply offensive, it reveals her ignorance about the country’s military-inspired neoliberal policies.
Her comments should be treated with the disdain they deserve.
[Michael Cooke and Dr Lionel Bopage are long-time community activists concerned about the socio-political and economic developments in Australia and Sri Lanka.]