Operation Rebound: policy prestidigitation in action

So quick bright things come to confusion

Midsummer Nights Dream, Act 1, scene 1.

The Northern Territory Government today (22 May 2020) released a Green Paper on its economic plan to ‘rebound’ from the economic and health impacts of the Covid19 pandemic (link here) and announced the membership of its Territory Economic Reconstruction Commission (link here).

The key elements of the plan include a set of  policy objectives, summarised most succinctly in the Chief Minister’s Foreword to the Green Paper:

Our third priority is to rebound the Territory economy so there is more growth and more jobs for all Territorians. This is about the future, but this work starts right now. This includes prioritising investment in job-creating projects, upskilling workers, working with industry to grow private enterprise, and securing future private investment.

This is what Operation Rebound is all about: doing whatever it takes to recover, rebuild and rebound so the Territory economy is stronger in the future.

Put simply, we are here to help.

And that means:

• Making it easier for businesses to recover, grow and create more jobs.

• Getting new investment into the Territory as quickly as possible.

• Kick-starting plans for economic diversification, building on our comparative advantages and exploiting our strategic location.

• Improving the Territory’s investment readiness and competitiveness, and strengthening key trading relationships.

• Identifying opportunities to work with the Australian Government on recovery efforts.

The Green Paper is full of high-blown rhetoric and marketing spin:

‘ Jobs First. Recover. Rebuild. Rebound.’ … ‘$40 billion by 2030 – the path to reconstruction’…‘Operation Rebound sets out our immediate response based on what we know or expect now, but we continue to be agile and respond as necessary as new challenges and opportunities arise.’

It lists 27 ‘immediate rebound initiatives’ none of which involve additional government investment. I recommend readers look carefully at the complete list. A small number of these address Indigenous policy issues directly, and I include them below to give a flavour of the overall level of (in)action:

(xv) supporting Traditional Owners and Land Councils to progress the development of projects in their communities and on their land…

(xviii) building economic opportunities in the delivery of human services to achieve better outcomes in Aboriginal communities…

Others are pure rhetoric:

(i) change the way government does business to build on the agility demonstrated through the COVID-19 response…

(iii) consolidating Darwin as a National Resilience Centre to support emergency response and resilience activities both in Australia and the region

The Government describes its strategy as follows:

Positioning the Territory to rebound strongly from the current crisis requires a comprehensive strategy addressing five focus areas:

1. securing investment to create long term jobs;

2. sustaining our population and the liveability of the Territory;

3. supporting Territory businesses to keep existing jobs and create new jobs;

4. driving industry growth and resilience in our supply chains;

5. mobilising the full resources of government.

In short, the Government has outlined a detailed plan, without allocating any resources to implement it. There is no indication that even one extra dollar has been allocated.

Instead, the Government has set up a Territory Economic Reconstruction Commission, with terms of reference (link here) to advise and report (but not make decisions) to the Government with a further body, Team Territory to provide specialist advice to the Reconstruction Commission.

Team Territory will comprise two of the three members of Team NT, an existing business development body comprised of Clare Martin (a former Chief Minister), Dick Guit (a former businessman) and Paul Tyrrell a former CEO of the Chief Minister’s Department.

The terms of reference for Team Territory (link here) mention the existence of a further entity, Team Rebound, described as follows:

Team Rebound will comprise a small number of high performing public servants who will provide project management and secretariat support to the Reconstruction Commission and Team Territory. Team Rebound will report directly to the Chief Minister, and be overseen by the Jobs Standing Committee of CEO’s, chaired by the CEO of the Department of Trade, Business and Innovation.

So to reverse the chain of command, the Chief Minister oversights the Jobs Standing Committee of Departmental CEOs, which in turn oversights Team Rebound which supports Team Territory and the Reconstruction Commission, and Team Territory provides specialist advice on feasibility of proposals to the Reconstruction Commission which advises the Chief Minister and the Government.

To my mind, this convoluted structure will likely achieve little; its major purpose appears to be to give the appearance of policy commitment and action while waiting for private investment to return to the NT economy. The technical term for this type of circular administrative architecture is ‘policy prestidigitation’.

Admittedly, the NT economy is small, and its future is tied to forces largely beyond the control of the NT Government, and the Government is carrying high levels of longstanding debt.  Nevertheless, the Territory is also home to a large cohort of extremely disadvantaged Indigenous citizens, who are in desperate need of tangible investments in public infrastructure and services.

The pandemic has led to massive market failure in a very short time. All the economic advice is that the ‘rebound’ will extend over a much longer period, and the Territory is coming off a particularly low base. It will be a huge mistake to rely on markets to rebound of their own accord. The solution to massive market failure is public intervention in the form of fiscal stimulus.

With global interest rates low, the NT Government could do worse than borrowing $10 billion and asking its Treasury public servants to devise a medium term investment strategy focussed on improving services and infrastructure designed to strengthen the economic opportunities for the poorest half of the NT population. This might be linked to a public request to the Commonwealth to fund (as part of its own medium term stimulus) the interest payments on this debt for the next decade.

Instead of political flim flam, Australia is desperately in need of visionary leadership from its governments. Governments have succeeded in managing the immediate impact of the pandemic by taking unprecedented action and following the advice of the medical profession. The next phase demands similar levels of vision and political courage. Unfortunately, all I see here is a slide back to spin and marketing. Australia will suffer, and the Territory will suffer proportionately more from this lack of political and economic leadership. And it goes without saying that Indigenous Territorians will bear the brunt of this ineptitude.