Of all the things we know to be true we know that we are going to die.

What we do not know for certain is when. We also do not know precisely how human genius will counter the damage done by COVID-19—although that Australian governments, of all stripes, have been guided by experts should give us confidence.

And we are in the dark as to what shape we will be in as a society and community of nations when we finally emerge into the light. The Australian Treasurer, Josh Frydenberg, in his speech to the Parliament, was cautious, almost silent, when talking about longer term prospects.

The precedents, however, are not good. In April, the Secretary of the Australian Treasury, Dr Stephen Kennedy told senators that ‘We have never seen an economic shock of this speed, magnitude and shape.’

During the Great Depression, from 1929 to 1931, the unemployment rate increased to 16.4 per cent and was 16 per cent in 1934. Real GDP fell by 18.5 per cent and took six years to recover.
Exports crashed and imports collapsed. Real wages flat lined.

In the middle of a pandemic, the challenge is to imagine and counter what lurks ahead. Alive is one thing, but unhealthy, miserable and isolated is no good future at all.
Following Abraham Maslow, we need to survive and to be secure, which turns on physical and economic good health. In doing so, our thinking is framed by the science of contagion and the consequent imperative to lock down society to a greater or lesser degree.

For Australia, economic and international uncertainty is a given. Looking offshore, we see economic pyres burning over the horizon and the smoke trails in the sky signal communities and economies in desperate circumstances.

So governments should be thinking about how we best generate the wealth to sustain a people and a recovery. The first point to make is that Australia has done well because expertise and knowledge has guided action and for this the Prime Minister and premiers—unlike their counterparts in the 1930s—deserve credit.

Second, a call for lower tax and less regulation is not a plan for growth; rather, it’s a partisan marching song, yelled out loud by ideologues and unconnected to evidence.
For example, in the year to 2018, President Trump reduced federal taxes as a percentage of GDP by almost 19 percentage points. And US federal public debt has increased—and will further increase. According to the Congressional Budget Office, the economic effect of increased debt is negative. High and rising debt reduces national savings and income, increases the government’s interest payments, limits the ability of policy makers to respond to unforeseen events and increases the likelihood of a fiscal crisis.

Happily, Australia is not the United States. Our debt is manageable. Scott Morrison is not Donald Trump. Governments are not households. Australian governments should borrow to support those who are thrown out of work and the business of government. But debt has to be paid for and it is fantastical thinking that lower taxes always result in economic gains.

So, we need a plan for growth and productivity because as we borrow to fund a COVID-19 response, we load national debt onto the shoulders of the young. This is a group who are increasingly locked out of the property market, loaded with educational debt and subjected to an insecure and casual labour market.

It follows that our system of taxes and transfers must change. Of the baby boomers, for the baby boomers and by the baby boomers, the current system is inefficient and unfair. It transfers wealth from Australians to foreigners, from the young to the old. It inefficiently and inadequately taxes mineral and energy resources. And because it’s riddled with concessions and loopholes, it’s a burden on growth.

Third, we must counter the reflexive crazies who run the argument that because COVID 19 came from overseas, trade from overseas is also bad and Australia should become a neo-protectionist island unto itself.

COVID-19 has demonstrated that the prevailing low-cost model of industrial production—meticulous control over stocks, real time information, and just-in-time delivery—is susceptible to disruption and shocks. Australia is right to examine whether supply chains are robust or fragile, and if as a nation we have reserves that enable us to respond and adapt to shocks. But this is different from harbouring the delusion that Australia should reorganise itself as a self-sufficient manufacturing nation, weaving bags, making shoes and T-shirts, and building V8 cars in the tens and hundreds.

Fourth, the United States and China are involved in a struggle for power and influence. Both have undermined the long term interests of Australia, which are free trade; international cooperation; an effective set of international agreements and a system of law that enable the peaceful resolution of disputes; and security in our region.
The challenge for Australia is to engage with and influence China as an increasingly dominant regional power, and re-enlist the United States as a force for positive and diplomatic change. This demands careful thinking, deft hands and nimble feet.

Fifth, if the manufacturing of the Holden Monaro is no solution, then we turn to our universities as sources and centres of innovation, adaptation and prosperity. A government that wants to throw our economic future under the bus, first hurls our universities and their staff there in a time of crisis.

Future export income will, in part, depend on Australia being thought of as a haven by foreign students. Whatever Australia does therefore we must protect students who are here and who are vulnerable. The current policy of leaving foreign students to their own devices is not only mean-spirited but counterproductive, because it trashes our good reputation.

Sixth, we must create an environment that is safe. It is likely that COVID-19 will be a constant in our lives—and our neighbours a threat to our lives. COVID-19 and the need for social distancing undermines calculations made about the desirability and sustainability of high density living, public transport and regular commuting. If we are not thinking about how we make our physical environment safer, then we need to start.

Finally, we come to the imperative for a clean, safe and unpolluted environment. Australia knows that a climate change reckoning is coming our way. The science is clear; the evidence is in; the consequences for humanity are catastrophic. If governments thought that COVID-19 was bad, then perhaps they will also realise that we haven’t seen anything yet.