Neoliberalism's pandemic
Neoliberalism's pandemic

Pandemics will always be bad, even in the best of all possible societies. Containing a contagious disease requires an enormous social effort and considerable inconvenience – deaths are inevitable, no matter how exemplary the response.

But capitalism, especially a capitalism hardened through more than four decades of user-pays, market-driven neoliberal “reforms”, is far from the best of all possible societies. In fact, it’s hard to think of anything worse.

Those running many of the world’s most powerful countries have dismissed, denied or made light of the virus, and have encouraged those shunning containment measures. As tens of thousands have been killed by the disease, their “leaders” have watched and shrugged. 

Even in Australia, where the political class has been more willing to listen to and act on the advice of medical experts and health officials, the legacy of neoliberalism has still made itself felt.

The devastating Victorian outbreak, which has claimed dozens of lives, would not have happened, for example, had the state’s quarantine program not been contracted out to cut-price security companies with no public health expertise. Properly paid and trained health professionals, supervised by those actually responsible for managing the crisis, should be at the front line of vital public health efforts like quarantine centres. But it has become such second nature for politicians and bureaucrats to engage money-grubbing private operators to carry out essential government functions on the cheap, that no one in the government can even say for sure who made the decision.

The tragedy unfolding in aged care is likewise a legacy of decades of neoliberalism. There has been a total of 15 federal government reviews or inquiries into the sector since 2017, with the Royal Commission into Aged Care Quality and Safety being just the latest. Each one has similar findings: aged care is failing the elderly. As the royal commission interim report released last October notes: “The aged care system fails to meet the needs of its older, vulnerable, citizens. It does not deliver uniformly safe and quality care, is unkind and uncaring towards older people and, in too many instances, it neglects them”. A more damning critique of the sector responsible for caring for “older, vulnerable” people would be hard to imagine.

Of this and all the other reports to government, only a handful have even been responded to, let alone acted on. The neoliberal orthodoxy that dominates decision making, to which there is supposedly no alternative, simply does not allow it. This parlous situation is no accident or failure of planning. It has been consciously created by successive Liberal and Labor governments.

Back in 1997, early in Liberal prime minister John Howard’s first term of office, the Aged Care Act was passed to address the derelict state of facilities across the country. Two options were available to address the crisis: provide public money to upgrade the facilities or give providers the ability to charge residents for the cost of building work and maintenance.

Predictably, the government opted for the latter, and the age of exorbitant fees and bonds began. The act also ended the requirement that a certain proportion of residents’ fees must be used exclusively for care, including paying the wages of qualified nurses, rather than being put towards capital works or profits. This change opened the way for providers’ income to be funnelled away from meeting residents’ health needs, contributing to a decline in quality of care and to the deskilling and casualisation of the workforce.

The situation has been no better under Labor governments. Julia Gillard’s 2013 “Living Longer Living Better” reforms tripled the number of residents required to pay a bond by abolishing the distinction between low and high care residents and making fees and bonds means tested. This created an incentive for providers to maximise the number of wealthy bond paying residents at the expense of concessional places (where fees are capped at 85 percent of the pension).

Prior to 2014, centres typically provided more than the legal minimum number of concessional places, which was set at 40 percent of the total residents. But as the campaign group Aged Care Crisis explains, “Now that nursing homes have three times the number of people who will potentially pay a bond, they are likely to want as many bond paying residents as they can get.  This means that they ... want to stick to the minimum 40 percent of concessional residents and charge the other 60 percent as much as they can”.

The Gillard government did nothing to ensure that fees and the interest from the bonds were put towards care, rather than going to profits. The result has been the grotesque enrichment of providers, like the owners and directors of Heritage Group, which owns nine aged care centres in Sydney and Melbourne, at least one of which is currently locked down because of a COVID-19 outbreak. The Age provided an insight into the lifestyle of co-owner Peter Arvanitis:

“In May his wife, the Maserati-driving Areti Arvanitis, sold the family’s Toorak mansion for an undisclosed sum. Equipped with both indoor and outdoor swimming pools the house had a price guide of $12.95 million. After they bought and redecorated a new ‘palatial’ Toorak mansion, with its own chef, the couple was described by their interior designer as ‘two bons vivants in beautiful dress’.”

This is the privately run, market-based service provision model that has been spruiked to us for decades. The competition that year nine economic students are instructed will lead to the best of all possible outcomes turns out to be a tawdry competition for the fastest Maserati and most swimming pools per square metre of real estate, while those in need of care are left to rot.

This situation was already disgraceful, but the pandemic has made it a matter of life or death. Aged care facilities should be safe places, where staff are well trained and infection control is effective. But because of the cumulative effect of measures carried out by those for whom the market represents the closest thing to God, elderly people – beloved parents, grandparents and friends who have spent their life contributing to society – are left to die alone.

Those responsible don’t even have the humility to admit their profit-before-life, market-driven ideology has created this shameful situation. Instead, they view the pandemic as a bothersome interruption to the glorious business of making money. Clive Palmer is a caricature of it: using his extraordinary wealth to fund court battles to overturn effective public health measures like border controls. A similarly bloody-minded attitude pervades the New South Wales government, which has been at pains to emphasise its loyalty to the economy over public health.

There have been some important glimmers of resistance to this disastrous state of affairs, but they have so far been on a small scale: meat workers refusing to start work in Melbourne without management implementing health measures, Spotless cleaning workers refusing to work after an outbreak, and call centre workers organising for safer working conditions. Union membership has reportedly increased overall during this pandemic, evidence that unions are still the organisations to which workers turn when their economic wellbeing is under threat.

But among those in a position to wage a serious campaign – for properly implemented public health measures, for economic resources to keep workers out of poverty rather than corporations afloat, and to fight for decent social services including for the elderly – there has been a massive failure of leadership. The ACTU heads have spent most of the pandemic cosying up to industrial relations minister Christian Porter, and now are bogged down in negotiations the end goal of which is to give union and business blessing to a new wave of neoliberal industrial relations “reforms”.

The other side, of course, is not letting a good crisis go to waste. Under the cover of the pandemic, prime minister Scott Morrison has boosted the power of the highly secretive national COVID-19 commission, a body loaded with powerful business people whose only qualifications are making money but who have nevertheless been appointed to give advice on the biggest public health challenge in 100 years.

Morrison recently announced that this commission will no longer be an “external agency” but will “work within government and ... form part of the cabinet deliberative processes”. Never mind that these businesspeople have not been elected by anyone, and that their “deliberations” will be secret. In classic neoliberal style, this assault on democratic process – not to mention good sense – was labelled an “important innovation” by Morrison.

We need an alternative to this madness. Neoliberal capitalist logic was objectionable enough when it was making life more expensive, services shoddier and working conditions worse. Now it is killing people who should be protected. The system needs to go.

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