The rights and wrongs of Howard, 1996-2007

I've railed against Australia's Coalition government enough on this blog for you to realise that I'm not exactly fond of them. Yet there are times when I have praised their work since 1996. What is going on?

For starters, I consider myself an independent leftist. I am not a member of any political party so, for me, supporting one party or another blindly has no merit. What I like is results.

The Howard government, now coming to an inevitable and hubristic close, has done much to harm our country. In response to Pauline Hanson's influence in the late 1990s, the Howard government abandoned much of the compassionate attitudes our country was trying to develop. Under Howard we had refugees being sent to Nauru and blamed for tossing their kids overboard. We had internment camps for illegal immigrants. Moreover, we had Australian troops participate in an unjust invasion of Iraq and make us complicit in the deaths of over 650,000 Iraqis since 2003. Lastly, despite eleven years to get things right, the Coalition's lack of concern for indigenous Australians has resulted in a continued level of suffering and deprivation, knee-jerk responses to this notwithstanding.

But what have they done right? The reforming of the tax laws and introduction of the GST was something I always supported - I never saw the GST as some impost on the poor but rather a sensible taxation measure. This new tax has rebalanced our economy and made it stronger - and a strong market economy is important when it comes to redistributing wealth to ensure equality.

The other thing that Howard and Costello did was to be fiscally prudent. Although I would have preferred tax increases rather than budget cuts (and the shrinking of the size of government along with it), the result has been a complete elimination of government debt. While countries like Japan, Italy and Belgium have government debt the size of their GDP (or greater), Australia has no net debt to speak of. And this is not (as some have suggested) the result of good luck, since if luck was equally apportioned out to other world governments then the government debt of selected countries would be paid off as well. The fact is that Australia is unique in the industrialised world in that its debt levels are non-existent. If Australia goes through a recession (and it probably will in the next two years), then any fiscal or monetary policy used to stimulate economic growth will be more effective simply because our government is not burdened down with debt.

The ALP will not, I believe, squander this good work. Under Hawke and Keating, the ALP's economic reform between 1982 and 1996 was just as important as anything Howard and Costello achieved. In fact, economists like Ross Gittins often point out that the economic gains of the Howard government would not be so great without the ALP's pre-1996 reforms. It is therefore likely that Kevin Rudd (Australia's next Prime Minister) will not turn into a free-spending, union-obeying, market-hating idiot (although he does have time to do that if he chooses).

I'm a "social-market economist" - not a Marxist or Communist. I believe that a balance needs to be sought between the natural actions of the marketplace and the importance of redistributing wealth to ensure equality and equity. There is no doubt that our nation has become richer under Howard and Costello, but there is also no doubt that there is a greater gap between rich and poor. WorkChoices, which has skewed the advantage against ordinary workers and favours bosses, has been an unmitigated social and political disaster.

I am hoping that the ALP will use the current good economic conditions to spread the wealth more evenly. More money needs to be directed towards public health and public education; towards helping indigenous Australians to become self-sufficient; towards encouraging new forms of energy and promoting public transport in the face of the dangers posed by Global Warming and Peak Oil. Yet I want them to do this intelligently and make few (if any) financial decisions based upon gaining votes and political power.


David Castor said...

Can't say I'm a fan of the GST, both because it is a regressive tax and because it has served to further centralise power at Federal level. For me, the highlight of Howard's prime ministerial career was his guy buy-back scheme following the Port Arthur massacre.

David Castor said...

Or rather, "gun buy-back" scheme.