Thanks Gough

Gough Whitlam, 1955 (National Archives of Australia)

Edward G. (Gough) Whitlam was prime ministor of Australia from 1972 to 1975.

I was only ten years old when he became PM, and a pimply young teen in high school when he made his exit, but during his time he made some tectonic changes to the fabric of Australian life.

Before I start, I should point out that politically I’m a bit of an economic conservative. I once ran as a federal candidtate for the Liberal Party in the 1990’s – a political party directly opposed to many of the philosophies of the Labor Party, of which Gough was a member, and luminary.

After watching an excellent two-part series on Gough Whitlam by the ABC : “Whitlam. The Power and the Passion“, I felt like I needed to express my gratitude to this amazing man for his legacy, of which I am a beneficiary – even though he was only Prime Minister for three years, and left office over 40 years ago.

So, Mr Whitlam, here are the things I’d like to thank you for, in no particular order:

1. Free University Education. What an amazing gift from a country to its youth. I came from a low-income family. I doubt I would have been able to go to uni if I or my parents had to pay full fees. But I got to study at one of the best Universities in Australia (University of Queensland) and didn’t have to pay a single cent. After three years I graduated with a Bachelor of Science degree and was able to work in my chosen field. My uni degree opened up wonderful opportunities for me, and today allows me to enjoy a much better lifestyle than I would have otherwise had.

2. Universal Health Care. Occasionally, when we have been ill, my family and I have free access to some of the best doctors in the country. Sometimes our health system is criticized, but I am grateful for our doctors and hospitals. In this family, they have saved our lives on several occasions. I can’t imagine ever living under a system where you could only get quality health care if you could afford it, or if an insurance company gave its imprimatur.

3. No-Fault Divorce. As anyone who has ever been through it will tell you, divorce is an unpleasant experience. Gough Whitlam introduced the “No fault” doctrine into Australian Family Law so that divorce proceedings were no longer a witch-hunt to find out whose “fault” it was that a marriage ended, but (more importantly) what outcome would be fairest for all, including the children of the marriage. While I don’t think you’ll ever come up with a system where divorcees come out of the proceedings happy with the process, I think today’s system is much more humane because of the reforms brought in by Whitlam.

4. Ending Conscription. As a primary school kid, I remember the anguish suffered by friends of my parents, whose sons had been “Called up” for military service in the Viet-Nam war. While I wasn’t of military age myself, I’m grateful that Whitlam ended conscription which had, till then, forced young men fight in wars, even though they weren’t old enoughn to vote.

5. The Trade Practices Act. Yep – it might sound like a crusty bit of legislation, but this act gave consumers a whole swag of new rights when dealing with corporations, which till then were almost impossible for average mums and dads to pursue. If you enjoy reasable guarantees and warranties on your purchases today, thank Whitlam for it.

6. Aboriginal Land Rights. What’s that got to do with a whitefella like me? When Gough poured a hand-full of dirt into the hands of Vincent Lingiari, and said “This is your land”, he helped white Australians realize that this continent was not a British outpost. It wasn’t a commodity that was bought and sold by corporations. It had a wonderful heritage that reached back to the dawn of time. Although Aborigines were the custodians of that heritage, all Australians were spiritual beneficiaries.

7. Equal pay for women. I was a kid growing up in a low income family where both parents worked full-time. This law recognized that the work my mum did was just as valuable as the work done by her male counterparts. Our family benefited directly from this recognition. Today, my daughters benefit from this same recognition. They won’t be treated as second-class workers

Yes – there were economic problems associated with the Whitlam government: Inflation, Debt, Unemployment, Scandals. But, for me, the important thing is that that Whitlam made some bold decisions, and those decisions still benefit all of us four decades later.

Mixed Bag

Some ticks and crosses for recent political events:

Julia Gillard visited India to reassure the Indian people that we want their students here, we’re serious about protecting them, and we’ll shut down any bogus educational organizations.  This is a smart move.  It’s a good example of Customer Service – how to turn a bad situation around by listening to concerns and doing something about it. The Indian government responded by inviting Australian universities to set up branches in India.

XNSW minister John Della Bosca resigned because he got caught having an affair.  John Della Bosca’s personal life is irrelevant.  The comments in the media about him missing planes because of his secret relationship are lame.  The bottom line is whether or not he’s doing his job effectively or not, whether the NSW tax payers are getting value from his efforts, and whether his actions and those of his government are taking his state in the right direction.  If you want to remove a government minister due to incompetence, that’s fine – it’s politics.  But resigning, or getting kicked out because you had an affair is stupid.  What sort of precedent does it set?  If we want to get rid of a government now, do we forget about policy debates and performance indicators, and just take the easy way out and dig through their dirty laundry.  This is grubby journalism, and stupid politics.  And NO I don’t support NSW Labor, or their politics.  But Della Bosca should still be a cabinet minister today.

Victorian minister Tim Holding was rescued from the Victorian Alps after two days being stranded on a mountain top.  This is great news, and a good example of emergency services getting the job done when needed.  Yes, he should have taken an EPIRB and probably should have taken a couple of mates with him, but despite that it’s good to see healthy active political leaders getting out and exploring the world, and surviving calamities.

XACMA refuses to ban junk food ads.  The Australian Communications and Media Authority is toothless, and without gonads.  They are incapable of doing anything courageous if it threatens the profitability of commercial broadcasters.  Australian Commercial Media requires more regulation, not less.  They intrude into every area of our lives.  Most of our chubby little kids are addicted to the junk they serve up.  Getting tougher with them won’t harm them at all.  All commercial media has to compete in the same environment.  Television advertisers still have to advertise.  I just think they should have a few more boundaries so they learn to behave properly.  The bottom line is that Australian Media can’t or won’t regulate itself.  The Government needs to bite the bullet on this.

√XA bet each way for the Gorgon Gas project.  It’s a good outcome which is a result of the efforts of both Labor and Liberal governments, past and current in WA and Federally.  It injects billions of dollars into the Australian economy.  BUT, environment minister Peter Garret was pretty much sidelined by the whole process.  The project was announced and feted BEFORE Garret had given his approval as environment minister.  Regardless of what the spin-doctors say, it shows that he’s considered irrelevant by the major players, and that the environment comes second when large amounts of money are involved.

XWayne Swan has left the spending tap on, money is splattering everywhere, and our current account deficit is blowing out.  Yes, our economy has benefited from economic stimulus, but Swan forgets that the stimulus doesn’t need to be a blunt instrument.  The Australian economy is growing, but Swan needs to be aware that the extra cash is boosting imports, and hurting exports.  If our current account deficit continues, we’ll be staring at Paul Keating’s “Banana Republic” in the not too distant future, with a $300 billion foreign debit too boot.

Kevin Rudd & Gough Whitlam. Doing the Deficit Two-Step.


http://www.abc.net.au/news/stories/2009/02/04/2481623.htm

It seems to happen with regular monotony – a Labor government gets elected, and we end up with Debt, Deficits, Unemployment and Big-Government.

No one disputes the need for governments to invest in infrastructure – especially in times of financial turmoil.

But Rudd and Swan are prooposing to put the country $100 billion in debt over 3 years. The sort of debt it took the Coalition a decade to pay off.

It’s a matter of spending what you actually have rather than charging up a huge burden of foreign debt on the national credit card.

The major lesson of the financial crisis is that debt can be toxic. If you borrow too much when times are tough, you’ll lose your shirt – and that is true for householders as much as governments.

Former Federal Treasurer Peter Costello slammed the competence of the Rudd Government on Lateline last night.

He pointed our the hypocricy of Julia Gillard praising the strength of Australia’s financial framework at the Economic Forum in Davos at the same time that Rudd was talking it down and saying that “Capitalism needed to be saved from itself”. As if there was one message that we needed to tell the world, but another message we needed to feed to the poor voters at home.

He underlined the poor quality of the $10 billion pre-christmas cash hand out, which did little more than boost the profits of Westfield, without creating any real jobs.

But most of all, he pointed out the stark contrast between the time when he was treasurer, and now, under our current incompetent, Wayne Swan. Under Costello we had budget surpluses in excess of 2% of GDP. Swan is giving us the opposite – budget deficits in excess of 2% of GDP.

As the old song goes… “Don’t it always seem to go that you don’t know what you’ve got till it’s gone”.

Ruddonomics

By Sinclair Davidson And Alex Robson

Wall Street Journal Asia – 23 October 2007

It looks like Australia may have lost its nerve for economic liberalism. In Sunday’s nationally televised debate, Prime Minister John Howard touted his vision: a “new society” based on entrepreneurialism and individualism. Opposition leader Kevin Rudd a self-proclaimed Christian socialist, backed bigger government and expanded social spending. Yet immediately following the debate, Mr Rudd. was declared the winner by most of the popular media.

Next month’s national election result could have significant implications for Australia, the world’s 15th-largest economy and a key U.S. ally in Asia. Over the past two decades, successive Labor and Liberal governments have ripped down trade barriers, privatized industries, floated the Australian dollar and opened the country to international capital flows. The economy is in its 16th year of uninterrupted economic growth, free of public debt, and enjoying low inflation and the lowest level of unemployment in 33 years.

Mr Rudd, a 50-year-old former bureaucrat, has cleverly mimicked the government’s record, even labeling himself an “economic conservative.” That tack has apparently won him support among Australia’s middle classes, who have benefited most strongly from the economic boom and don’t want to see a change in economic strategy. He’s now leading Mr. Howard by about 10 percentage points in most national polls. But a closer look at Mr Rudd’s. record reveals that he’s not a reformer, but rather an unreconstructed interventionist masquerading as a free market conservative. Call it “Ruddonomics.”

Take his parliamentary record, for a start. Since coming into the Parliament in 1998, Mr.Rudd has toed the party line and opposed most efforts to further reform the economy. The Australian Labor Party opposed the privatization of Australia’s government-owned telecommunications provider, Telstra; strongly protested industrial relations reform, including Mr. Howard’s recent efforts to reduce union power and abolish unfair dismissal laws; and, most importantly, opposed all significant tax reform over Mr. Howard’s tenure, including cuts in income taxes. Mr. Rudd’s economic philosophy isn’t a secret. In a speech to the free market Center for Independent Studies in Sydney last year, he openly attacked the free market ideas of Nobel Laureate Friedrich Hayek, branding him a “market fundamentalist.” In Mr Rudd’s. mind, it’s okay to accept “the economic logic of markets but . . . these must be properly regulated and that the social havoc they cause must be addressed by state intervention.” He also argued that public policy should deliver long-term market-friendly reform tempered by “social responsibility.”

In practice, a Labor government under Mr. Rudd would re-regulate economic life. Over the past year he has promised to set up no fewer than 68 new bureaucracies and establish 96 reviews if elected. He promises to ratify the Kyoto Protocol and commit Australia to a costly program of reducing its greenhouse gas emissions to 60% of 2000 levels by 2050. His proposed industry policy—constructed by Kim Carr, a declared socialist—would create an uberbureaucracy of 12 Industry Innovation Councils. The goal, it seems, is to promote manufacturing by “picking winners”—a policy with an appalling track record of failure both in Australia and elsewhere. To round things off, Mr. Rudd’s labor-market policy promises to abolish individual workplace agreements and to restore union power over policy making to its former glory.

Given the Howard government’s record of economic success, Mr Rudd’s dominant lead this far into the electoral cycle is a remarkable achievement. But it’s also not without precedent. Australia has been through this kind of economic soul-searching before, with an eerily similar Labor campaign pitch—and a disastrous outcome.

In 1972, Prime Minister Gough Whitlam led Labor out of a 23-year-long electoral hiatus by running the most comprehensive negative campaign in Australia’s history. His “It’s Time” platform emphasized the Liberal Party’s long stint in power without laying out a coherent alternate economic vision. He then embarked on a disastrous three-year premiership, during which time he socialized Australia’s health and education systems and unapologetically increased the size of government. Inflation soared, as did the levels of national debt. Today,
Australia is still living with many of Mr. Whitlam’s mistakes.

Mr Rudd’s 2007 campaign strikes a similar tone. His slogan—”New Leadership”—is aimed squarely at Mr. Howard’s political longevity, rather than any apparent policy differences. Indeed, an integral part of Mr.Rudd’s strategy is to mimic everything his opponent says on monetary and fiscal policy, including keeping a budget surplus and an independent central bank. Even Mr. Rudd’s Labor Party colleagues—many of whom are closely affiliated with left-wing labor unions—now cloak themselves in the jargon of economic conservatism, while touting big government platforms such as a federal government takeover of the nation’s hospital system.

At the same time, Mr. Rudd has judiciously employed the “It’s Time” strategy, carefully pointing out that his opponent has been around for an awfully long time, and is “old,” “stale” and “out of ideas.” To top it all off, he often cautions voters about the evils of negative campaigning, and reprimands Mr. Howard for directing any criticism at him, no matter how minor.

We’ll soon know if Australian voters will repeat their 1972 mistake, and go with a candidate who promises bigger government. When asked whom they want to run the economy, voters overwhelmingly favor Mr. Howard. Yet betting markets, which have a good track record of predicting voting outcomes, show that Mr. Howard only has a 40% chance of holding on to power. That most voters do not seem to know or care about any of this speaks volumes about Mr. Rudd’s campaign strategy and Mr. Howard’s inability to cut through the spin. For the most part, Australians do not seem to recognize that good economic policy does not require “new leadership” or “new ideas.” The current economic boom has lasted so long that most citizens— including Mr Rudd, it seems— have forgotten the three main ingredients of policy success: minimal intervention, transparent regulation and broad economic liberalization.

Mr Rudd has done well to convince voters he represents new leadership, as the results of Sunday’s debate show. Yet it isn’t clear which aspect of his election platform is new. If Ruddonomics wins the day, Australia could find itself back in a 1970s mindset, with bigger government and a less competitive economy. In a modern, rapidly globalizing world, that’s not a vision for the future— that’s a vision for the past.

Mr. Davidson is a professor in the School of Economics, Finance and Marketing at RMIT University in Melbourne. Mr. Robson is a lecturer in the department of economics at the Australian National University in Canberra.