Australian Prime Minister Scott Morrison has rejected the highly interventionist “Build Back Better” policies embraced by fellow developed countries in an election pitch to the business community.
The prime minister also called for a reconfiguration of supply chains from “just in time” to “just in case” models, while outlining seven critical areas needing attention.
“Our economy is now 3.4 percent larger than when the pandemic struck, and around 260,000 more Australians are in work compared with where we were before COVID-19,” he said.
The prime minister pointed to Canada’s 0.5 percent employment growth rate and 0.1 percent GDP growth in the December quarter compared to pre-pandemic levels.
“Prior to the pandemic, Australia had sustained a world record in, by some accounts, of over 28 years of uninterrupted economic growth,” he said. “Now this was unmatched by other advanced economies, both in terms of duration and the rate of growth.”
“That’s why, frankly, I’ve never really been in the, and caught up in the hoopla, of the ‘Build Back Better’ camp, that opportunistically sees the post-COVID recovery as some opportunity to replace our market-based, business-led growth economic system, with a government-centred reimagination of global capitalism,” he added.
Morrison emphasised that “capitalism didn’t break” and it was because the “world got hit by a global pandemic.”
“My concern is that the alternative to our government, a Labor government, with the Greens, if elected, would seek to snatch the reins back, following the lead of their political fellow travellers in countries overseas.”
Currently, the Biden administration in the United States, Prime Ministers Boris Johnson in the UK, and Justin Trudeau in Canada have all adopted the “Build Back Better” (BBB) motto for their policy platforms earmarking heavy government spending (and involvement) across major industries as a means to drive economic growth and investment.
The alternative approach to BBB, adopted notably by the former Reagan and Trump administrations, was to help businesses grow via cutting taxes, reducing regulation, and incentivising investment.
“A strong private sector continues to be our first line of defence,” Morrison said. “A good example was the looming shortage last Christmas of AdBlue.”
“China’s decision to suspend urea exports, from which we make AdBlue, had the potential to shut down our trucking network,” he said. “We took immediate action to intervene, reaching an agreement with Incitec Pivot to convert Gibson Island in Brisbane from the manufacture of agriculture grade urea to produce AdBlue and higher-grade refined urea.”
Morrison said targeted support highlighted the role government should play without overreaching its mandate.
The prime minister also outlined seven supply chain categories needing attention: semiconductors; agricultural chemicals; water treatment chemicals; telecommunications equipment; plastics; pharmaceuticals; and personal protective equipment (PPE).
Under the Supply Chain Resilience Initiative, the government engages in “fore sighting” by analysing supply chain vulnerabilities before they become a problem and then organising a response.
“We’ve already made significant progress. We’ve secured an agreement with Moderna to establish mRNA manufacturing in Australia in Victoria, with the Victorian Government—the first facility outside of Europe and North America to be able to do this,” Morrison said.
Supply chain vulnerabilities have come to the fore amid pandemic-induced lockdowns and geopolitical issues like trade coercion from Beijing. Fuel supplies and PPE were two areas where supply chains were heavily impacted.
“In this new era, we can’t just be thinking about ‘just in time' supply. We need to be thinking about a ‘just in case’ model, which supports greater diversification and larger inventories of key goods,” the prime minister said.
“Trusted partners, of course, critical. That is the world we are living in now—and we all know that supply chain disruptions are lower when we plan and we prepare for them.”
