Flat White

Small businesses languish while the government grows fat

31 January 2022

9:00 AM

31 January 2022

9:00 AM

One of the many negative corollaries of the various draconian governmental measures is the damage to small businesses.

One would have thought that in Victoria a Labor government would be especially attuned to the difficulties faced by working class business owners and employees, particularly as it enforced upon them the longest lockdown in the world. But the days when the Left’s focus was on the working class are long over.

The hospitality industry is perhaps the most deracinated by the governmental pandemic rules. For long periods of the pandemic, many cafes, restaurants, and pubs were unable to cater for patrons indoors. Now, in peak holiday season with 93 per cent of Victorians above the age of 16 fully vaccinated, businesses are hoping to finally recoup some of their lost revenue through Melbourne’s six lockdowns. This, however, is proving to be much harder than expected.

The staff shortages due to close-contact or suspected-illness quarantines during the Omicron wave, and the precipitous drop in patronage due to the fear instilled by relentless PR, has meant that many businesses are finding it harder than ever in 2022. Importantly, government financial assistance, which were largely based on lockdowns, no longer exists for most businesses.

Two reasons behind the intransigence of Victoria’s draconian Covid regulations might be that those who make the policies are not suffering from the consequences of their actions and are in fact doing rather well for themselves.

Victorian budget papers in May 2021 showed an almost 10 per cent increase in employee costs, worth $3.2 billion, towards a total of $36 billion for the next financial year. The wage bill before the Andrews government took office was $21 billion. In his two terms, Premier Daniel Andrews has increased the wage bill of public servants by more than 70 per cent. To put it in perspective, this increase for governmental employees is $1 billion dollars more than the financial support given to Victorian businesses by both the federal and state governments combined after the Delta outbreak.

Premier Andrews almost tripled the number of Victorian Public Service executives who can earn up to $479,900 since his time in office, increasing the number from 647 in 2014 to 1,742 by mid-2021. Victoria saw the biggest increase in public servants in the 2020-21 financial year, growing by 18,400 – far more than the second-placed New South Wales public service, which grew by 9,300. This was ostensibly to deal with the pandemic – yet there is little to show for this, as Victoria has had almost double the number of Covid-related deaths compared to New South Wales, despite having 1.5 million fewer people.

Just before implementing the 112-day lockdown in July 2020, Victorian politicians received an 11.8 per cent pay rise, adjudicated by an independent tribunal in 2019. Premier Andrews became the most well-paid premier in Australia, earning an additional $46,522 for an annual salary of $441,439.

One might overlook the pay rise, as it was decided upon pre-pandemic. However, in 2021, with the backdrop of economic hardship, Victorian MPs received another 2.5 per cent pay rise from July, while the Wage Price Index increased by merely 1.7 per cent across Australia for the entire financial year between June 2020 and June 2021. Premier Andrews’s salary grew to $450,000. The Auditor-General’s report in late 2021 suggested that the Victorian government debt will grow by 200 per cent of revenue within the next three years, over three times more than pre-pandemic levels.

The writer Upton Sinclair had a great insight into human nature. He wrote that: ‘It is very hard to get a man to understand something when his salary depends on him not understanding it.’ And for most politicians who are enjoying the lucrative status quo, funded by the tax dollars of many businesses that are drowning in the obdurate and increasingly nonsensical regulations that they implement, self-interest dictates that it might be unwise to rock the boat.

But the flip-side of this should be the realisation that it is an extraordinarily unwise arrangement where the people who make important decisions that affect entire societies are precisely the ones who pay no price for being wrong. As the eminent economist and Nobelist Frederich von Hayek wrote:

Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions. Liberty and responsibility are inseparable.’

The Victorian Labor government has shown throughout the pandemic that they are happy to do without either liberty or responsibility.

Got something to add? Join the discussion and comment below.

Show comments