RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

The past week has revolutionised the way politics works in Australia, with a right-wing government introducing the most radical economic measures in more than a generation.

Today, columnist for The Saturday Paper Paul Bongiorno on the massive spend many recommended but no-one saw coming.

RUBY:

Paul, at this point, what has surprised you the most about the government's economic response to coronavirus?

PAUL:

Well, to be honest, Ruby, the sheer size of it and what it does to some very basic assumptions about what the Liberal Party believes and what it stands for.

On Monday, you could just about hear the earth move as the Coronavirus pandemic opened up a wide chasm between the coalition and its political substructure.

Archival tape -- Scott Morrison:

Good afternoon, everyone. Now is the time to dig deep.

PAUL:

You know, the prime minister basically said we are living in unprecedented times.

Archival tape -- Scott Morrison:

With the twin battles that we face and that we fight. Against a virus and against the economic ruin that it can threaten. This calls for unprecedented action.

PAUL:

In one fell swoop, the commitment to small government and privatisation, to the eradication of debt and deficit as the measure of fiscal rectitude and efficiency fell into the abyss.

Archival tape -- Scott Morrison:

To date, we have announced two packages of support. Economic packages worth almost 70 billion dollars. You may have thought that was a lot. And it certainly seems so at the time.

PAUL:

A sombre Morrison told reporters his government had made a decision that no government has made before.

Archival tape -- Scott Morrison:

And I hope and pray they never have to again. In the past, on so many occasions, they couldn't. But today we can. Today we must. And today we will.

PAUL:

He said they were working to a whole new set of rules.

RUBY:

So, Paul, tell me about the decision that Morrison's referring to.

PAUL:

Well, specifically, he's referring to a wage subsidy. He had just spent at least three weeks ruling out. This is a payment of 15 hundred dollars a fortnight to each employee made to businesses to ensure they keep on workers.

Archival tape -- Scott Morrison:

We will pay employers to pay their employees and make sure they do. To keep them in the businesses that employ them. And to ensure they can get ready together to bounce back on the other side.

PAUL:

It's an unprecedented and gigantic package. Economists are forecasting the budget deficit when it's handed down. Finally in October, some time will be in the order of 100 billion dollars. That's a long way from the much touted $5 billion surplus of just two months ago.

Gross national debt is forecast to go beyond a trillion dollars. I mean, Ruby, this week we really saw a dramatic and unprecedented paradigm shift in the government's response.

RUBY:

And this spending necessary spending, everyone seems to agree, obviously comes after the coalition spent more than a decade saying that a surplus was the mark of good governance.

PAUL:

Yeah, well, that's right. And that's the revolutionary shift I'm talking about.

Labor's Tony Burke says it'll be a long time before it goes to an election making debt and deficit a defining issue.

Writing in The Australian, the conservative commentator Greg Sheridan went further. Now, you gotta remember, this is Tony Abbott's old mate, and he's a great backer of the Liberal Party. Sheridan said the centre right will need a new narrative in light of the $212 billion and rising. The government is throwing at the crisis.

He spelled it out pretty clearly. He wrote, and I'm quoting, You can't make the need for small government, free markets and less state intervention, your chief political narrative. If you have just used government on a scale never before imagined to rescue the nation from a desperate health emergency.

And look, this is true. This is epoch changing. And I reckon it goes a long way to explaining why Morrison's hair has gone from grey to white in a matter of weeks.

Archival tape -- Scott Morrison:

What I say, is we must work together to make this work, and to make it go as far as possible. We still do not know the many other challenges we will face in the months ahead.

RUBY:

We'll be back in a moment.

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RUBY:

Paul, we're talking about the huge economic package the government announced this week. Can you tell me a little bit about how it was received within the coalition?

PAUL:

Well, Ruby was received very positively. There is a recognition certainly amongst his own troops, but even more widely that the Prime Minister is showing bold, indeed courageous leadership here.

Morrison has been holding these town hall teleconferences with his MPs since the crisis deepened their virtual party room meetings, and he's heard scarcely a whimper of protest, if anything, in the latest one.

This week, the pushback was coming from conservatives who were demanding more. They want nationalisation of key assets rather than bailing them out with billions of dollars of taxpayers money.

Airlines are an example of that. One MP told me that if Virgin wants $1.4 billion to stay viable while the government should demand equity in return and this would see taxpayers own about 80 per cent of the hitherto majority foreign owned business. There's so much happening that we really have to pause to remember how extraordinary it is that a neo liberal, economically conservative government is even considering this sort of thing.

And by the way, it won't just be airlines. According to economists like Chris Richardson, we'll be having this nationalisation conversation. That is, instead of propping up essential assets, just buying them out. Right. And we're thinking here of businesses like childcare centres and even regional bus lines and plenty of others.

RUBY:

Mm it's pretty extraordinary. Can we just go back for a moment to the wage subsidy package? How did that come together?

PAUL:

Well, as we've been saying, Morrison has been ruling this out for almost a month. But midweek, the government began briefing out that Morrison and his senior ministers had been quietly working on one for a while. There's no doubt the Treasury was analysing the British model along with what was happening elsewhere, like Canada, New Zealand, Denmark. That's its job, after all. But the spin claimed it was all Morrison's idea.

The briefing spelled out Morrison had tic-tacs with business leaders, and his ministers certainly had reached out to the unions as well.

Labor, unions and business, you should remember, had been urging such a subsidy package as soon as the crisis began shutting down the economy.

Archival tape -- Sally McManus:

I’d like to thank all the union members who campaigned so hard over the last couple of weeks to win the wage subsidy that Scott Morrison announced yesterday.

PAUL:

That's why after the announcement, ACTU secretary Sally McManus said the government had heard the Australian Union Movement's call to ensure that all workers are covered by a wage subsidy program.

Archival tape -- Sally McManus:

We're still going to have to fight hard to make it as best we possibly can. Needs to apply to everyone, casuals and visa workers included.

PAUL:

If you're someone on closer examination, though, it's clear. Not all casuals would be covered. Not all foreigners on certain visas. And the ACTU is concerned the fifteen hundred dollars a fortnight subsidy may not be enough. It's calling for this to be increased to the median wage.

Archival tape -- Sally McManus:

No less than the median wage which is $1375 per week…

PAUL:

As it stands, the package is worth about $130 billion. The ACTU’s additional call if it was reached, would push it well beyond that.

RUBY:

And so when will this come into effect?

PAUL:

Well, the parliament needs to sit for this one. It's a complicated piece of legislation. Morrison, by the way, has backdated it to March, but it's taking a lot of work. Late Wednesday night, the government announced a scaled down or what you could call a miniaturised version of parliament will sit next Wednesday.

Morrison has teleconferencing with Labor leader Anthony Albanese to iron out key details of the emergency sitting. He's undertaken now to have a call with Albanese and his key people every week.

And Morrison continues to appeal to the public and to the country's unique spirit to get through this emergency, as he said this week.

Archival tape -- Scott Morrison:

It's our principles and values as Australians. That will guide us through this uncharted territory. And will get us to the other side.

PAUL:

To the other side together.

Archival tape -- Scott Morrison:

Together.

RUBY:

Paul, where does this leave Australian politics in the long term? It seems like this is such a significant realignment. So is there much of a political battle left in terms of how governments should respond to this pandemic, but also the role of government more broadly?

PAUL:

Well, Ruby, it's obvious that this crisis is still unfolding. It's a huge circuit breaking event. There'll be no sudden return to business as usual. The experience of the GFC and the recessions of the 80s and 90s shows we get into these messes much faster than we recover from them.

But we should expect those in the Liberal Party, especially who are philosophically committed to small government, to push hard to get back to that way of operating. While on the Labor side, those who see a much bigger role for government will claim vindication and push to argue big government is better and should remain well.

Hopefully, though, the constructive political dialog we're now seeing sets a break with the rancorous, mindless tribalism that has characterised so much of Australian politics for the past 10 years especially. You know, Ruby, the nation desperately needs nothing less.

RUBY:

Paul, great talking to you today.

PAUL:

Thanks, Ruby. See you.

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RUBY:

And the latest in the response to Covid-19:

Prime Minister Scott Morrison has announced that child care will be free for the next six months. Priority will be given to parents who have an essential job and are still working.

The Federal Government will also provide financial support to 13,000 centres around the country. Sharp falls in childcare attendance rates in recent weeks had put many centres on the brink of closure and threatened thousands of jobs.

The government said they’ll be moving to the new childcare system from this weekend.

The federal health minister Greg Hunt has said over 3000 retired nurses have already volunteered to help in the coronavirus response, after the government asked former health practitioners to temporarily re-enter the workforce.

And a letter signed by over 1200 healthcare professionals called on the government to immediately release all people who are held in Australian immigration detention centres.

The letter says that immigration detention facilities and hotels which are holding asylum seekers and refugees “constitute a very high-risk environment” for their mental and physical health".

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7am is a daily show from The Monthly and The Saturday Paper.

It’s produced by Ruby Schwartz, Atticus Bastow, and Michelle Macklem.

Elle Marsh is our features and field producer, in a position supported by the Judith Neilson Institute for Journalism and Ideas.

Brian Campeau mixes the show. Our editor is Osman Faruqi. Erik Jensen is our editor-in-chief.

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

You can find us on instagram and twitter - just look for 7ampodcast. `

I’m Ruby Jones, see you next week.