Our government’s handling of the three major crises (GFC, Covid, fuel supplies) over the past two decades has been abysmal, showing a high level of incompetence.
Despite having the most public servants per 10,000 people in the western world, our government has shown that it is ill-prepared for major risk events. Business executives spend considerable time thinking of what could go wrong, then if it is something within their control, they take steps to ensure it doesn’t go wrong, and if it is outside their control, they take steps to mitigate the adverse impact on the business if the risk event occurs. Our government should be doing the same, but has it?
Government, possibly working in collaboration with the financial industry, should have anticipated a global financial crisis, but appears not to have done. It should have had a plan for dealing with such an event but appears not to have had one. If it had one, that plan appears to have been ignored. Our (Labour) government at the time copied major powers by significantly stimulating our economy and guaranteeing bank deposits, notwithstanding that our banks had very little exposure to the US sub-prime mortgage-backed securities. This stimulus required a significant increase in government debt and was inflationary. It was also unnecessary.
Similarly, government should have anticipated a pandemic and planned for it. It may have done so, but when the Covid pandemic hit, that plan was ignored. Our State and Federal governments appear to have just followed the lead of major powers. Our (Liberal) government at the time, significantly stimulated our economy, significantly increasing government debt to do so. This stimulus was entirely unnecessary, and together with the GFC stimulus is resulting in government debt fast approaching one trillion dollars. That’s a trillion dollars more than the no government debt position under the Howard / Costello government only a couple of years before the GFC. If that debt were refinanced today (May 2026) the interest bill would be about $50 billion a year. To put that into perspective, a 500-bed hospital handling costs about $1.5 billion.
Anyone considering national security would have recognised our exposure to petrol, diesel and fuel-based fertiliser imports. Government should have recognised this risk and planned for it. Given the geo-political tensions regarding the South -China Sea, through which most of our fuel and other imports travel, this supply risk should have been given high priority. It clearly was not and nor have our successive (Labour and Liberal) governments mitigated that risk. That’s not the least of it, they have recklessly allowed our national fuel reserves to drop to about 30-days of fuel, a level that is about a third of that internationally recommended.
Have our federal government and two major political parties learned their lesson? It appears not. We are on the cusp of another major risk event, one that is likely to cause more social and economic turmoil than any other event since the industrial age and our government appears to be bumbling along without a plan. That is quite frankly reckless.
The problem is that when government functions are broad, government loses focus on its core responsibility to protect us, allowing itself to get distracted by much of far less relevance and significance. As a result, it misses and inadequately prepares for big risk events.
CLA’s policy in this regard, includes the following;
One. Its policy of significantly shrinking the ambit of government functions and getting government to focus on its core responsibility, will go a long way to fixing this problem.
Two. Limiting the capacity of future governments to stimulate the economy by constraining their capacity to undertake further borrowings and money-printing.
Three. Implementing the risk management mindsets common within large businesses.