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, 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.