The new Howard doctrine

As I’ve argued a couple of times already, Howard’s massive spending in this election campaign amounts to more than simple political expediency (of course, there’s plenty of that). He has come to a fundamental change of view about what the Australian public wants from governments, one in which more and better services rank ahead of tax cuts. If he continues along the lines of the past few weeks (and, with respect to Medicare[1], the last year or so), I think we might see the emergence of a coherent position, going beyond simply spraying money at every interest group that moves.

Until recently, the best description of Howard’s position on public spending was ‘creeping residualism’. He wanted to kill off big systems of universal provision such as Medicare and public schools, and replace them with a “safety net” for the poor while everyone else got subsidies for private provision. The new position, most evident with Medicare, but also indicated in his education policy, might be called “Universalism + Choice”. In relation to health, this means ensuring universal access to bulk billing and public hospitals while also encouraging private health insurance. Similarly, for schools it means “easing the squeeze” (Sorry!) on the public system, while still providing support for private schools across the board.

Universalism + Choice has some appeal. But, done properly, it’s going to be expensive. Unless Howard stages a full-scale “promises overboard”, it’s unlikely we’ll see significant tax cuts any time soon under a re-elected Liberal government.

fn1. It’s notable that the shift in policy on Medicare coincided with Abbott’s move to health. His well-earned reputation as a headkicker and unionbasher obscures the fact that he’s given no particular evidence of attachment to economic rationalism/neoliberalism during his career. His admiration for Santamaria is worth noting in this context.

17 thoughts on “The new Howard doctrine

  1. And Howard is busy accusing Labors medicare Gold of a first 2 billion and now 5 billion discrepancy. The hospital system must be pretty pathetic in this country for it to cost that much.

    Read Alphacoward Blog and agree or disagree with me.

  2. John,
    I pretty much agree with your description of the the shift by the Howard Government.

    However, what still sits in the background is the marked failure by the Howard Governemnt to shift to a more ecologically sustainable use of energy to power a growing economy.

    Climate change (caused in part by electricity produced by coal-fired power stations) will have a significant impact on Australia: in terms of the loss of our coal reefs and wetlands;an increasing water crisis in Perth and other major cities); ravaged agricultural production; and loss of biodiversity.

    Under a future Howard Government itlooks as if the increasing demand for more and more energy to fuel the machinery of a growing economy will be met by more polluting coal-fired power stations.

    The solution in the Howard Govt’s Energy White paper, to depend on geosequestration and to avoid actively fostering the growth of renewables (wind and solar).That means the environmental bads are only going to get worse.

  3. John

    I’m also inclined to agree with your ‘universalism + choice’ description, but the continuing batttleground will be about financing and equity of government funding. Some argue that equity requires govt to subsidise all education (for eg) to the same level for each family/child – hence the argument for public funding for private schools regardless of parents income. On the other hand, others (like me) will argue that funding be on the basis of need and/or capacity to pay – I think the ALP has the right balance with regard to school funding.

    Its hard to see universalism extending to some other policies areas though – housing is a good example of a tightly targetted public program ($1b for public housing and about $2b for rent assistance) co-existing with far higher tax subsidises benefitting mostly the well-off (negative gearing, exemption of family home from capital gains tax, first home owners grants, non-taxation of imputed rent all worth around $20b pa). Same goes for dental health (federal subsidy of around $350m pa through the private health insurance rebate). The thing that stands out with these is that govt funding for the rich is hidden through tax expenditure whereas funding for the poor is subject to great scrutiny through the budget.

  4. The Greens are running hard in Melbourne. Latest is a pamphlet announcing they’re within striking distance of taking the seat from Lindsay Tanner.

    On the back, a bunch of objections to voting Green are addressed. On the economic policy question it says: “In July this year, respected economist Professor John Quiggin wrote in the Australian Financial Review: ‘The Greens economic policy is, quite simply, the most coherent and intellectually-defensible…'”

    …I think you know the rest.

  5. John,

    Now I’m confused. Where’s the conflict between political expediency and changing your mind about what voters want from government?

    I can understand there being a conflict between a sincerely held position grounded in philosophical principle and promising to do whatever will get you elected, but this isn’t what your saying.

    What you seem to want to say is that that the public want more services not more tax cuts, and that somehow this view has recently acquired political clout.

    I’m curious about the somehow.

  6. Don,

    It’s valid to distinguish between a genuine if reluctant acceptance of the majority preference, and a cynical attempt to bribe voters. Since John calls the latter simple expediency, I guess the former must be complex expediency or difficult expediencey or both. In any case it falls well short of enlightenment.

  7. I’ve been told that we could double the health bugdet with no discernable imporovement!
    What did pj o’rourke say about how much free health care costs?
    It seems to me that there are far too many people going to doctors and being prescribed legal drugs that cost the taxpayer shitloads!
    We have become hostages to the multi national drug companies,to the tune of I think 4.5 billion dollars last year for the PBS.

  8. James’ response to Don is about what I had in mind.

    I’m trying to make a distinction between temporary concessions to expediency and an acceptance that a particular set of ideas is no longer a sustainable basis for involvement in politics. One might say that, in the latter case, a principled believer in those ideas should simply withdraw from public life, but that’s setting the bar too high for JWH or most other politicians.

  9. Maybe the “fundamental change of view” is just another attempt by Howard to address the contradiction between free-market economics and the Australian preference for government action to provide a lot of social infrastructure. Paul Kelly (“Age of Uncertainty”, ch. 22) noted that he had a go at this in 1988, in his “Future Directions” statement. The emphasis then was on families and nostalgia together with an attempt to cry up “rugged individualism”. It wasn’t very successful, but it might indicate that Howard’s giant mind has been involved in Promethean struggles with these sorts of issues for a while.

  10. “I’m curious about the somehow.”

    Interesting question Don.

    Tentatively, the notion of World War IV (against terrorism) translates in the popular mind as a set of circumstancees undermining globalisation. It might be argued that this happens in at least two ways:

    1. Conceptually, the borderless world has suffered partial eclipse. In that your swing-vote punter now feels less safe basking on third-world tropical beaches.

    2. If there is no place like home, then we owe it to ourselves to make home as presentable as possible, (always on the understanding that, in the welter of cross-subisidisation that’s generated by that conclusion, sufficient voters can convince themselves that they end up ever-so-slightly ahead in this exercise of parcel swapping.)

    So the “somehow” it might be argued, is an inextricable mix of the calculating and the reflex.

  11. Maybe all that small government rhetoric was the temporary expediency – something to inspire the drys and win the leadership.

    Now that he’s king of the castle he’s free to emulate his hero Sir Robert.

    Or maybe it’s been expediency all the way. Maybe there never was any ideological principle.

  12. Who knows what lies in the heart of men, Don?

    It would be more accurate of me to say that this appears to be a significant shift in Howard’s political strategy, and not merely a tactical manoeuvre aimed at winning votes for this election.

    It’s my observation that most politicians seem to genuinely believe in their “strategic” views while being fairly cynical about tactical adjustments – this might be explained in terms of cognitive dissonance. But I can’t tell for sure with Howard on economic policy – his real faith is in the white picket fence stuff.

  13. Ah… I see now.

    He’s no longer a sailor who has the occasional drunken binge but is now a fully fledged alcoholic.

  14. Quiggin’s oxymoron
    John Quiggin hypothesises that John Howard’s new-found enthusiasm for tax-and-spend policies may be based on “a fundamental change of view about what the Australian public wants from governments, one in which more and better services rank ahead of tax …

  15. Beyond wet and dry
    By Don Arthur In a series of posts John Quiggin argues that the era of dry, small government politics is over (see here, here, and here). Andrew Norton almost agrees. He argues that market oriented reform is here to stay,…

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