Australia Goes Hard and Goes Early on Covid-19

When the 2008 global financial crisis caught the world unaware, then-Australian treasury secretary Ken Henry advised his Prime Minister Kevin Rudd to “go early, go hard, go households.” By this, Henry meant to stimulate the economy on a massive scale and to take the economic and domestic political pain up front and in full. It worked. So too on the foreign policy front, Australia sought to follow a core group of foreign policy priorities; it deepened alliance cooperation with the United States by making the Darwin announcement, bolstered regional multilateral frameworks (the G20, ASEAN and APEC) and actively pursued broader bilateral cooperation and partnerships with key states like China, Japan, Indonesia, and India.   

Australia weathered that storm through a comprehensive full-steam-ahead strategy. Through taking a hard and fast approach, Rudd was able to limit the negative impacts of economic, social, and foreign policy dilemmas that afflicted many of Australia’s like-minded counterparts and the subsequent disruption to the international system still playing out today.     

Like Rudd in 2008, Prime Minister Scott Morrison has acted with similar boldness in this larger and more complex crisis that we face today. And like Rudd’s 2008 response, Australia’s full bore three-pronged strategy of enforced social-distancing, a massive economic stimulus (around USD 200 billion) and resisting the urge to turn inward at the expense of its relations with regional and global partners. Morrison’s policies show initial signs of paying dividends at this stage and appear to be working as much as being practicable, as the world remains in lockdown.

Australian officials, much like their counterparts in the rest of the world, have been scrambling this past month to deal with the Covid-19 pandemic. Initially, through a series of disjointed messages and regulations between the state and the federal government, Australia has now stabilized its public messaging and coordination—including forming the first national unity cabinet since 1945. Morrison himself has said, “This is a once-in-100-year event, we haven’t seen this sort of [crisis] in Australia since the end of the First World War.”

Due to its faith in its relative geographic isolation, strict border and quarantine laws, and a culturally ingrained aversion to overreaction (a prized national trait), Australia was relatively late in accepting the gravity and complexity of the Covid-19 crisis. Overlaying this hesitancy to respond too early, Australia is only now just emerging from once-in-a-lifetime extreme wildfire season, which hit hard the heavily populated south-east corner of the country over the latter part of 2019 and lasted until March 2020.

By early March, the fire had destroyed 27 million acres of land (an area about the size of the state of Virginia), thousands of homes, claimed more than 30 lives and decimated wildlife populations. The wildfire crisis stretched national response (including the military) and emergency funding resources to its absolute limit.

Still reeling from the wildfire crisis, by the time the first wave of Covid-19 cases began breaking outside of Wuhan in January, Australians were suffering in many ways from crisis fatigue syndrome with many convincing themselves the pandemic was a far-away problem and Australia would somehow remain immune.

Morrison smartly bought time by taking a “be alert but not alarmed” approach and began initiating firstly modest fiscal stimulus and graduated social-distancing and teleworking measures across the nation in mid-March.

Once the scale of the crisis became clear, Morrison went hard working with his state counterparts, creating a national unity style approach. Morrison put the nation on a war footing, implemented swift stay at home measures (backed up a strong enforcement approach), shut Australia’s borders (including between Australian states), and directed the largest stimulus package in Australian history.

Morrison has also delayed Australia’s annual federal budget by five months (ordinarily due to be delivered in early May) to October, explaining that the coronavirus pandemic has made it impossible to make “sensible” economic forecasts.

Unlike the political rancor between Washington and the states, which is hampering both the messaging to the American people and managing the pandemic, Morrison and the state premiers (governors) have taken a national bipartisan approach—putting politics last and the nation first. Australia’s low infection and death rates are in no small part a testament to that style of leadership and management. As of this writing, Australia has a total of 6,447 coronavirus cases and 63 deaths. The Australian government maintains that few of these deaths are due to community transmission and that most infections can be traced to overseas travel.

Morrison and Joshua Frydenberg, the treasurer (finance minister) will seek to walk a fine line in managing the worst economic crisis to hit Australia since the Great Depression, while balancing a fragile and worsening regional security dynamic. The government will keep its eye on both China and the unfolding crisis currently enveloping Indonesia as it struggles to manage the pandemic and the ensuing economic and political fallout. 

On the foreign policy front, stability should and will be Australia’s core driving principle.  Despite Covid-19 and the widespread disruption it is having on the global system, Australia’s core strategic and foreign policy settings remain locked in. Australia will seek to maintain both its maritime and air dominance in its near region, further enmesh the United States in the Indo-Pacific, deepen cooperation with Japan (once the immediate health crisis has passed), and not waver from its 2018 Pacific Step-up strategy.  

In the Pacific Islands, concerned that China may seek to capitalize on a distracted Australia, Morrison has acted swiftly in the past month to ensure Australia remains the partner of choice in the region. Under its nearly USD 1 billion annual aid and development package, Australia has reallocated funds to its Pacific neighbors to better fight and mitigate the spread of Covid-19, and it is also understood that Canberra is closely considering upping its donor commitment with additional money to help fight the pandemic there.       

Indonesia has Australian officials rightly anxious about current events there. Expect to see Australian policymakers highly focused on the impacts that Covid-19 has on Indonesia and the potential for widespread disruption to Indonesian society and politics. Long-held Australian strategic policy assumptions about the trajectory and integrity of Indonesia (since the fall of the Suharto regime in the late 1990s) are now being re-examined as the pandemic spreads rapidly and may quickly overwhelm Indonesia’s under-resourced health care system.          

Given the fractious nature of the regional security dynamic, Morrison and his government will seek to “ring-fence” to the greatest extent possible the nearly USD 25 billion defense budget from significant cuts—especially to existing acquisition commitments, current operations, and budgeted capability development programs. But, the Department of Defence will not be immune from the significant budget cuts the government will have to make across the board and will likely see modest cuts in discretionary areas of the defense budget.   

Australia will seek to keep China out of Australia’s near region through both demonstrable traditional hard-edged deterrence (as evidenced by recent upgrades to RAAF base Tindall in Australia’s north) and soft power options through its hefty Pacific Step-up program and associated regional donor budget.  

The Covid-19 black swan has presented Australia and the rest of the world enormous challenges on the domestic policy, economic, and foreign policy fronts. Despite this, Morrison and his government are driving the domestic agenda hard and using all tools in the state toolkit to get the nation back to work as soon as and as safely as possible while maintaining a regional status quo favorable to Australia.       

Patrick G. Buchan is director of the U.S. Alliances Project and fellow of Indo-Pacific Security at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Patrick Gerard Buchan