Economic policy under Howard
Jack Strocchi attacks what he takes to be the standard leftwing view of Howard as a free-market radical, quoting among others, Alan Kohler, Stephen Kirchner and Max Walsh to support his view of Howard as a crypto-socialist. This gives me the chance to have a test run for my own, more nuanced, assessment of Howard, which will be a book chapter in due course. Comments much appreciated. Here goes
Economic policy under Howard presents a contradictory picture. Sometimes the Howard government appears as a continuation of those of Hawke and Keating, implementing the reforms those governments were unwilling or unable to introduce. At other times, as in its ‘nation-building’ infrastructure exercises, it seems like a throwback to the developmentalist ideas of the 1950s and 1960s. Still more of the time, it appears content to drift, happily taking the credit for a long period of relative economic prosperity and putting forward economic reforms on a purely opportunistic basis, as and when the political climate demands an appearance of action rather than stability.
Although he had not taken a particularly strong ideological stance during his period as Treasurer in the Fraser government, John Howard emerged in the 1980s as the strongest and most consistent advocate of free-market reform in Australian public life. His self-description “most conservative leader the Liberal Party has ever had” was accurate, at least in the interpretation of conservatism which encompasses radical market-oriented reform as well as conservative views on issues such as family structure and immigration.
Howard was strongly identified with a program of market reform that presented its task as dismantling the institutions built up in Australia from Federation to the 1970s, and designed to insulate Australian workers and families from the vagaries of national and global markets. In place of these policies the reformers aimed to ‘open up’ Australia to market forces, scrapping tariff protection and the arbitration system, abandoning Keynesian policies of macroeconomic stabilisation and reversing the growth in the welfare state since World War II.
Howard’s election defeat in 1987, and the failure of John Hewson’s radical Fightback! program in 1993 led him to the conclusion that the Australian electorate was inherently averse to programmatic reform. This conclusion was reinforced by the failure of Paul Keating to excite the electorate with ?Big Picture? issues such as reconciliation and republicanism, issues where Howard ran successful negative campaigns.
As a result, when he was unexpectedly returned to the Liberal Party leadership in 1995, Howard presented himself as a changed, not to say reinvented, man. He hoped, he said, for a ‘relaxed and comfortable’ Australia, words that were intended, and taken, as code for the end of the ‘storm and stress’ of the microeconomic reform policies adopted under the Hawke and Keating governments. The GST, which had assumed iconic status for both supporters and opponents of microeconomic reform was ‘dead’ and would ‘never ever’ be revived. In the leadup to the 1996 election, Howard promised not to cut public expenditure in a range of areas even if, as was generally expected, the budget deficit turned out to be worse than Labor had claimed.
Instead, immediately following the election, Howard announced that the deficit, now dubbed ?Beazley’s Black Hole? was so large that only ‘core’ promises could be implemented. The 1996 Budget introduced a wide range of cuts in expenditure, most of which violated promises now reclassified as ‘non-core’.
An obvious interpretation of these events is that Howard’s reinvention before the 1996 election was purely tactical and that, in reality, his commitment to radical economic reform was undiminished. The reality is more complex. Although Howard still adheres to the economic policy ideas of the 1980s, the belief that Australia urgently needs more market-oriented reform has ceased to drive him or his government.