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COVID-19: Comparing jurisdictions - opportunities for policy borrowing?
Policy ‘borrowing’ among the states
Adam Hannah highlights the opportunities and risks of policy borrowing across different Australian jurisdictions in tackling the COVID-19 crisis, drawing on the example of rental assistance packages offered in different states.
Australia’s federal system provides both challenges and opportunities for responding to crises like the COVID-19 pandemic.
On the one hand, there is the challenge of coordination. Power over many relevant policy areas are either held with the states, or with varying degrees of contestation and overlap between the states and the national government. This is particularly the case for key areas such as health care, housing, education and policing. As such, there is a need to ensure that decisions taken show concern for both national and local interests.
Still, the capacity for variation between the states may also bring opportunities to enhance policy making. For the states, one benefit is the ability to adapt policy to the local context – the ability for Western Australia to effectively close its own border being an obvious example.
In addition, advocates of federalism often make the claim that states can act as hubs of policy experimentation, the lessons of which can then be drawn on by others. One recent example of such learning can be seen in relation to the handing of the arrivals of cruise ships. While the issue was clearly mishandled in New South Wales, Western Australia appears to have been far more careful as a result. More broadly, the states, particularly the larger ones, have significant policy capacity and expertise of their own. While this has historically led to complaints about doubling up of resources across the country, in the current moment, states may be able to build on good policy work already done elsewhere.
At the same time, there are several reasons to be cautious about the role of policy borrowing or transfer in the current pandemic response. Academic work on policy transfer highlights the importance of factors such as differences of context, and the need for a detailed understanding of what it was that made the original policy successful.
In the current crisis, differences of context are unlikely to be a major barrier to policy transfer, given the general similarities in health, education and housing policy across the states. However, it is also the case that the policy responses are being developed with extreme haste. There is little time for consideration of alternatives, analysis and economic modelling or wide consultation that is usually understood to characterise an ‘ideal’ policy process. Where policy is made on the fly, the groups that are best connected, resourced or electorally influential are at an advantage. Moreover, the capacity for news media to take a critical eye to policy announcements, already much weakened even prior to the crisis, is reduced by the sheer pace of recent events.
As such, any policy borrowing should be done with as much care as possible. It will be tempting for governments to jump at any policy that appears to give immediate relief to key constituencies. However, given the short-term focus of the crisis, concern also needs to be given to the possibility of longer-term or unintended negative consequences.
Rental assistance packages
A good example of this dynamic can be found in the various rental assistance packages being announced by the states. At the time of writing, such announcements have been made by New South Wales, Queensland, Victoria and Western Australia. This follows the decision by the national cabinet to introduce a six-month moratorium on rental evictions.
As housing is largely a state responsibility, it falls to the states to decide exactly how to construct a rent assistance package. The more difficult element of this is not the moratorium itself, but how to ensure that neither tenants nor landlords are unfairly burdened where tenants are not able to continue paying the full rental amount. While several states have made announcements to this end, at the time of writing, none have been legislated. In Western Australia, for example, Premier Mark McGowan has announced that a moratorium will be legislated, but provided few details on how exactly the government may help mitigate the financial burden and ensure equity. As such, there is a chance to examine the approach of other states and adapt.
From a quick analysis of the packages announced thus far, it appears the states are making decisions in four main areas:
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