Crises, governmental responses, and institutions

COVID-19 fits comfortably within the definition of a crisis. Crises shatter peace and/or social order (Boin et al., Reference Boin2016). They are extraordinary events or episodes, or a series of them, which cause societies to re-imagine their dominant assumptions and ‘ways of working’. There is ambiguity in conceptualising, naming and coming to terms with them politically (Boin et al., Reference Boin2018; McConnell, Reference McConnell2020). As well as lives, crises can threaten property, markets, political careers, public services, and policy agendas (McConnell, Reference McConnell2003: 363). Generic government responses to crises can include: strategic evasion or crisis non-recognition; laying blame partially or fully with non-government interests; actions to symbolise crisis control; the establishment of public inquiries; attempts to isolate the voices of interests critical to government; creating a new government agency specifically to deal with the problem; using or mis-using evidence, especially through government-controlled statistics; and attempting to either centralise or decentralise the handling of a crisis (McConnell, Reference McConnell2003). Decentralised responses pre-suppose the need for high levels of cooperation across the various affected institutions. As discussed in the penultimate section of the article, the Australian social policy response combined several of these measures.

Taken collectively, crisis responses tend to be political and administrative, rather than related directly to the substance of policies. The connection between crises and individual policy responses is thus indirect. It needs a conduit. The linkage-point is provided by institutions. The new-institutionalist literature is more commonly utilised to explain incremental change, through the ‘historical-institutionalist’ strand, which dates back as a distinctive research tradition at least to the early 1990s (Steinmo et al., Reference Steinmo, Thelen and Longstreth1992; see also, for example: Hall and Taylor, Reference Hall and Taylor1996; Streeck and Thelen, 2005; Capano and Howlett, Reference Capano and Howlett2009; Mahoney and Thelen, Reference Mahoney, Thelen, Mahoney and Thelen2010). The most common institutions of interest tend not to be at the macro level, such as entire nations or economies, and not at the level of the individual. Rather, historical institutionalism engages with change in ‘meso-level’ institutions, such as those of employment and the welfare state. And the change usually relates to longer-term evolutionary development (Mahoney and Thelen, Reference Mahoney, Thelen, Mahoney and Thelen2010; Ramia, Reference Ramia2020a), which is often necessary in order to demonstrate significant change patterns over time.

In the context of crises, however, including those that remain ongoing, timeframes for response can be too short for longer-term appraisal (Boin et al., Reference Boin2018). Crises represent what institutionalist scholars refer to as ‘critical junctures’ (Lipset and Rokkan, Reference Lipset, Rokkan, Lipset and Rokkan1967; Capoccia and Kelemen, Reference Capoccia and Kelemen2007), which open up ‘windows of opportunity’ for change in a policy agenda (Kingdon, Reference Kingdon1984). They are those moments when permissive conditions create the context for a new policy direction to be taken; and for major change to be politically palatable. Critical junctures constitute the intellectual territory between ‘path dependency’, which leads policy to stay largely within the bounds of historical continuum, and ‘exogenous shock’, which is created by unprecedented conditions (Stark, Reference Stark2017). This is the terrain that the current article treads, given its argument that social policy responses to COVID-19 in Australia are explicable by reference simultaneously to change and to path dependence. As discussed in the remainder of the analysis, the response has been facilitated by, and encased within, the traditional politics of federalism; which has shaped the welfare state since its earliest days (Castles and Uhr, Reference Castles and Uhr2005; Ramia, Reference Ramia2020a).

The COVID-19 crisis and the social policy response in Australia

Social distancing and enforced lockdowns were phased in gradually in Australia from mid-March 2020, with the public officially told on the 29^th of that month to stay at home, except for movement for essential tasks such as food shopping or being tested for the virus (Tetlow et al., Reference Tetlow, Pope and Dalton2020). While the outbreak was contained and the infection incidence curve was ‘flattened’ to allow hospitals the capacity to cope with new patients – and this was relatively successful from the health perspective – the social costs were profound. The immediate economic contraction and job–loss occurred at a speed and magnitude unprecedented in the country’s modern history (Biddle et al., Reference Biddle, Edwards, Gray and Sollis2020; Coates et al., Reference Coates, Cowgill, Chen and Mackey2020). Within weeks of the introduction of public health restrictions an estimated 594,300 Australians had lost their job. The number of underemployed increased by 603,300, to a record high of 1.8 million people, and 489,800 people exited the labour force. This represented the biggest drop in participation rates since the collection of national employment statistics began (ABS, 2020a; Hayne, Reference Hayne2020a).

To put the scale of the crisis into focus, at the low-point stage in the pandemic, an estimated one-third of the Australian labour force became reliant on government income support: 12 per cent (1.6 million people) were receiving unemployment benefits, up from 6 per cent prior to the pandemic; and 21 per cent (3.5 million people) were being supported by wage subsidies (Tetlow et al., Reference Tetlow, Pope and Dalton2020). A recession followed, with the nation’s Reserve Bank forecasting that the unemployment rate would reach close to 10 per cent, or 1.4 million unemployed by the end of the year (RBA, 2020), while some economists predicted a figure of anywhere between 14 and 26 per cent, which would lead to 1.9 to 3.4 million people out of work (Coates et al., Reference Coates, Cowgill, Chen and Mackey2020). The worst predictions did not materialise, and the high-point in official unemployment was reached in July, when it was 7.5 per cent (ABS, 2020b). It is worth repeating, however, that crises are more about perception than reality (McConnell, Reference McConnell2003); and the perception is revealed as much by the dire predictions as the reality that emerged in relation to the scale of unemployment.

Shaping the response

Australia’s social policy response to COVID-19 was shaped by two main factors. The first was the urgency of the crisis situation, which facilitated the institutional change pattern underpinning the major increase in welfare generosity. The second is the longstanding federal institutional framework governing the welfare state. In what follows we demonstrate that historical-institutionalist thinking explains and links both aspects: the change and the tradition. An understanding of the policy context is vital.

COVID-19 had an uncertain starting point, and its end-point is indefinite. Though it was declared a pandemic on the 10^th of March 2020 by the WHO (2020), its sources remain contested, and the sense of crisis did not have a widely agreed-upon start date; though it was fast-moving. It is highly uncertain when the crisis will end, whether in popular or individual perception, or in objective reality. It is ‘slow burning’ (‘t Hart and Boin, Reference ‘t Hart, Boin, Rosenthal, Boin and Comfort2001), especially in the sense that it introduced temporal uncertainty (Boin et al., Reference Boin2018: 30-31). In responding to crises, governments must consider the substance of the changes they introduce, and they need to assess carefully when to respond. In doing so, they may profit by taking swift, strong and decisive action to symbolise crisis control. One determining factor behind the surprise element in the handling of COVID-19 – the swift, strong and decisive response – lay in the Prime Minister’s handling of catastrophic nationwide bushfires, which caused a separate national crisis as recently as the previous Summer. That was fresh in the minds of the voting public. The fires peaked in December 2019 and January 2020 – during the Australian Summer – just as COVID-19 was taking hold in China. As the fires burned out of control, largely overwhelming State government resources, the Prime Minister refused to intervene because technically the responsibility for firefighting rested mainly with individual States (Albeck-Ripka et al., Reference Albeck-Ripka, Tarabay and Kwai2020). His perceived mishandling of that crisis sparked widespread public anger and backlash (Walter, Reference Walter2020), including a delay in coordinating a national response, a failure to listen to expert advice, communication breakdowns between the federal and State governments, and a preoccupation with partisan messaging.

In addition to what, before the crisis, would have been viewed as unforeseeable policy change, crises can also prompt special inquiries (McConnell, Reference McConnell2003). This is even where the government of the day may not benefit politically from them. Since the onset of the crisis the government has faced pressure to forgo its undertaking that the increase in JobSeeker be temporary, and instead make it permanent (Hayne, Reference Hayne2020b; Whiteford, Reference Whiteford2020). Advocacy for this coincided with the release of a Green-Labor-dominated Senate inquiry into the adequacy of JobSeeker and similar welfare payments (Commonwealth of Australia, 2020). The Committee’s report found that insufficient income support payments entrench disadvantage, and resulted in poverty, precarious living conditions, barriers to employment, housing stress, homelessness, food insecurity, and poor mental and physical health outcomes (Commonwealth of Australia, 2020). As has been clear even to parts of the federal public service – such as the Workplace Gender Equality Agency – these and other socio-economic ills have fallen disproportionately on women, and on workers in highly feminised industries such as hospitality and the health and social care sectors (WGEA, 2020). The Senate Committee provided twenty-seven recommendations, one of which advised that, ‘once the Coronavirus Supplement is phased out, the Australian Government [should] increase the JobSeeker Payment, Youth Allowance and Parenting Payment rates to ensure that all eligible recipients do not live in poverty’ (Commonwealth of Australia, 2020: xv). The government, on the other hand, consistently pointed out that social security increases were not permanent.

The severity of the crisis and the government’s strategy of atoning for the mishandling of the bushfires combined to provide a ‘critical juncture’ (Lipset and Rokkan, Reference Lipset, Rokkan, Lipset and Rokkan1967; Capoccia and Kelemen, Reference Capoccia and Kelemen2007) for policy makers. The timing and the political and economic conditions were conducive to policy reform. As Kingdon (Reference Kingdon1984) argued in a still-influential agenda-setting framework, a ‘window of opportunity’ was created for an unprecedented approach to policy-making. In addition to change in substantive policies, the government undertook change to the institutions which determine policy, including the welfare state. In line with crisis management theory (McConnell, Reference McConnell2003), it created two new agencies. The first and most important was the ‘National Cabinet’, which was established on the 13^th of March 2020 and remains in operation at the time of writing. Consisting mainly of the Prime Minister and the State Premiers, the new ‘Cabinet’ was not a Cabinet in the conventional sense of a collective of a government’s most important Ministers. It is not as direct in its effect on enacted policies. Rather, it is at its core an ‘executive-federalist’ body (Menzies, Reference Menzies2020) established to respond to the pandemic; a policy discussion forum, but a formal structure containing federal and State government representation. The second agency created in response to the crisis was the National COVID-19 Coordination Commission, which brings evidence and data to the National Cabinet to inform collaborative decision making (Menzies, Reference Menzies2020; Moloney and Moloney, Reference Moloney and Moloney2020).

The establishment of the agencies speaks to the third major characteristic of crisis management in: the tendency either to predominantly centralise or decentralise governmental control (McConnell, Reference McConnell2003). Conceptually it is here that the crisis response meets path dependency – an institutionalist concept – in the need for ‘crisis coordination’ (Boin et al., Reference Boin2018). This is a process represented by ‘vertical and horizontal cooperation’, typically engaging a ‘governance network’ formation (Ramia et al., Reference Ramia, Patulny, Marston and Cassells2018). Australia’s National Cabinet was partially derived from the concept of its predecessor body, the ‘Council of Australian Governments’ (COAG), which was significantly larger in its membership and more embedded in traditional federalist governance than is the National Cabinet. The functioning and composition of the National Cabinet, however, are tailored for crisis coordination purposes (Fenna, Reference Fenna2020), being advised and supported by the pre-existing Australian Health Protection Principal Committee (AHPPC), which included the State-based Chief Health Officers and the National COVID-19 Coordination Commission.

The importance of federalist institutions has never been absent from the formulation and implementation of Australia’s social policies. In general, federalist policy making systems tend to push policy makers toward decentralised, necessarily collaborative solutions to crises. To be sure, Australia’s federation has been ‘centralising’ through the course of history (Phillimore and Fenna, Reference Phillimore and Fenna2017), not least to facilitate wider provision of social protections nationwide; especially after World War II when the welfare state was being expanded (Castles and Uhr, Reference Castles and Uhr2005). Over time, as supported by High Court decisions, many responsibilities transitioned from the State to federal levels, and the power of the latter increased and expanded (Kewley, Reference Kewley1973; Watts, Reference Watts1987; Ramia, Reference Ramia2020a: 108–109). Yet federalism also means a share of responsibilities for sub-national governments. Outside of social policy, despite the generally ‘centralising’ tendency, it is Australia’s States and Territories that have primary responsibility for managing crises, including pandemics. Each has its own public health Act and emergency management Act (Fenna, Reference Fenna2020; Parliament of Victoria, 2020).

The States operate the public hospitals, government schools, and the police and emergency services. They also have primary jurisdiction over domestic borders and public health and safety – both of which have been central to the COVID-19 response – as well as criminal and civil law, and the licensing and regulation of businesses, facilities and services at risk of contagion (Duckett and Stobart, Reference Duckett and Stobart2020b; Fenna, Reference Fenna2020; Tulich et al., Reference Tulich, Rizzi and McGaughey2020). Australia’s management of COVID-19 has necessarily involved an intricate intergovernmental collaboration institutionally. This undergirds the social policy response, which has been substantially more federal than State. Limited food and accommodation assistance measures for temporary visa holders stand as exceptions. They have been offered by State governments in collaboration with local governments and NGOs (Coleman, Reference Coleman2020). In those areas, in contrast to the prominent examples of the JobSeeker and JobKeeper schemes, the federal sphere has provided little cooperation.

Conclusion, and implications for other countries

There are some overriding, somewhat predictable similarities in government responses to COVID-19 in many parts of the world (Moreira and Hick, Reference Moreira and Hick2021). The most common measures have involved: the declaration of states of emergency; external travel restrictions; the creation of new or specialist health facilities; quarantining and isolation; tracking and widespread testing; public awareness campaigns; curfews; restrictions on mass gatherings; the closure of workplaces, schools and universities; and internal travel restrictions (Capano et al., Reference Capano, Howlett, Jarvis, Ramesh and Goyal2020). In addition, global and regional policy ‘trackers’, of which there are now many (Oxford Supertracker, 2020), confirm that most ‘social and employment’ policies involve measures designed to boost and protect employment while compensating those who have lost jobs, and demand-stimulus measures designed to minimise the economic downturn. These are policy programs to respond directly to the crisis, and most are new and specific to COVID-19. In general they were not introduced in non-crisis times. What makes Australia’s response significant in the international context, however, is the scale of the policy turnaround in the direction of generosity, especially given that the government in power is a conservative coalition with an increasing anti-welfarist policy agenda (Wilson, Reference Wilson2020).

In combination with the surprise element that the crisis presented the government, it is equally important to recognise that, to a large extent, Australia’s existing institutions have been used to channel policy reform. The same set of institutions that served well those who are workers and those who for whatever reason are not employed also guided a national health response that has been lauded internationally as highly successful (O’Sullivan et al., Reference O’Sullivan, Rahamathulla and Pawar2020). That is, there was an imperfect match, but a connection, between the substantive policy changes introduced and the institutional framework which channels their introduction. This kind of relative policy-institution compatibility is likely to be of benefit in other countries. Equally, however, crises can expose the shortcomings of existing institutions, and matching policy with institutions may not meet with success in every nation. To be sure, researchers need to examine the particularities of national institutional arrangements, and the circumstances of the crisis, before over-assuming the wider cross-national applicability of reforms. Just as institutions reveal the need to consider path dependency, they also expose institutional weaknesses.

Though Australia’s federal structure served Australia well, such a structure does not guarantee effective national management of COVID-19. The specific characteristics of federal systems also shape response possibilities (Rocco et al., Reference Rocco, Béland and Waddan2020). Whereas Australia has been a centralising federation over time, the United States, for example, has a more devolved system (Kettl, Reference Kettl2016). In Australia, a parliamentary-federal system, there are well established laws and conventions that control and equalise revenue-sharing arrangements. The US, on the other hand, has a federal-presidential system, where the two main levels of government share revenues on a conditional and program-specific basis (Downey and Myers, Reference Downey and Myers2020). This encourages intergovernmental and partisan conflict over which States have their funding requests and requirements approved, and which have theirs declined. Vertical and horizontal collaboration are challenged. An Australian-style response – combining federalism in the health measures with federal government leading the way in social security payments and incentives to employers to continue to pay workers – was never on the cards for the US under the Trump Administration. It remains to be seen how much of an improvement the new Biden Administration is able to make, principally through its new policy package (Russonello, Reference Russonello2021; The Guardian, 2021); the centrepiece of which is a one-off injection of $1400 into low-income households and extends the applicability of a wide range of welfare payments, and offers tax credits and care subsidies.

Under President Trump the US saw an active federal level of government which introduced a raft of mainly, necessarily decentralised responses to COVID-19. The most significant relate to: business loans; the public, means-tested Medicaid scheme; the unemployment insurance system; and nutrition and various other emergency measures (Kettl, Reference Kettl2020). However, the US federal system has fostered major conflict between State and federal governments, which disallowed an Australian-style response. This pre-existing institutional factor has combined with political problems in and around the Whitehouse to produce a relative policy paralysis. The problems have included the need for, and the predominance of, intergovernmental lobbying and political favouritism based on which side of politics dominates each level of government and the Congress. This combined with the complex intergovernmental funding requirements and information-sharing challenges to cause delayed and sometimes ineffective policy implementation. More importantly, federalist problems have translated to a poor public health record in the management of COVID-19. As Rocco et al. (Reference Rocco, Béland and Waddan2020: 472) argue, ‘federalism as it exists in the United States has inhibited the country’s response to the economic crisis caused by COVID-19’. Importantly, however, as the same authors point out, ‘[t]his is not because of any generic characteristics of federalism’. Most of the identified problems are specific to the US, and most of them stem from long-established political structures. The simple lesson for policy makers – in social policy as in other areas – is that federal political systems vary in the number and severity of the policy challenges they present, and the overall effectiveness of the pandemic-preparedness they offer. Regardless, and most importantly for this analysis, a knowledge of traditional institutions is an important prerequisite to conceiving of a successful response.

Relative success of the kind that Australia has experienced, has also been seen in unitarist systems such as New Zealand. While the Australian case is an example of a federal system, which necessarily leans towards the coordination of responsibilities between and among States and the feral sphere of government, New Zealand provides an example of a highly centralised response regime. Its public health, economic and social policies share overriding similarities with those of Australia (Jamieson, Reference Jamieson2020; Robertson, Reference Robertson2020a), but the governance of the response was markedly different. New Zealand adopted an ‘all-of government’ approach – more often labelled ‘whole-of-government’ or ‘joined-up government’. It established a centralised National Crisis Management Centre (NCMC), which represents a more ‘horizontal’, rather than ‘vertical’ (or intergovernmental), coordination mechanism. The NCMC was to act within the framework of the New Zealand Coordinated Incident Management System, a national framework for coordinated emergency responses across responding agencies (Bromfield and McConnell, Reference Bromfield and McConnell2020: 13). While on the surface such initiatives may resemble Australian measures (Wilson, Reference Wilson2020), it is worth noting that in New Zealand there are no internal borders and no level of government legally or politically empowered to realistically challenge the prerogative of the national level. The New Zealand Prime Minister, Jacinda Ardern, has been able to act with a relatively unquestioned form of centralised authority. She and her Cabinet took action early and decisively to establish a COVID-19 ‘elimination’ strategy, which was pursued with relative success, like Australia’s, but channelled exclusively by and through a unitarist state.