March 27, 2015

George Megalogenis

Green Army: Persons of Interest

Bertrand Russell (1872-1970):
[The] plutocracy in a democratic country … can prevent governments composed of Socialists from introducing Socialism, and if they are obstinate it can bring about their downfall If these means were to fail, it could stir up a civil war to prevent the establishment of Socialism.
(Power: A New Social Analysis, 1938, p 86)

Gough Whitlam (1916–2014):
[The market] forces which man is unleashing in the world must be the subject of public and not exclusively private control and decision …
Democratic socialism is a philosophy about the value of man.
It is an attitude towards one's fellow man.
Today, it is not concerned merely with rationing scarcity and eliminating exploitation.
It means planning for abundance and creating opportunities.
(Labor and the Future, The Australian, 18 February 1967)

John Howard:
By the year 2000, I would like to see an Australian nation that feels comfortable and relaxed about three things:
  • I would like to see them comfortable and relaxed about their history;
  • I would like to see them comfortable and relaxed about the present; and
  • I'd also like to see them comfortable and relaxed about the future.
(Four Corners 55th Anniversary - 1990s, ABC Television, 2016)

1930s Political Slogan:
One People, One Empire, One Leader!
(Ein Volk, ein Reich, ein Führer!)

Pauline Hanson (1954)


Independent Member for Oxley (1996-8)

[I want] multiculturalism abolished.
Between 1984 and 1995, 40 per cent of all migrants coming into this country were of Asian origin.
I believe we are in danger of being swamped by Asians. …
They have their own culture and religion, form ghettos and do not assimilate. …
A truly multicultural country can never be strong or united. …
[To achieve national unity and strength,] we must have:
One People, One Nation, One Flag! …
[At] this stage that I do not consider those people from ethnic backgrounds currently living in Australia anything but first-class citizens, provided of course that they give this country their full, undivided loyalty. …

I am fed up to the back teeth with the inequalities that are being promoted by the government and paid for by the taxpayer under the assumption that Aboriginals are the most disadvantaged people in Australia. …

The Family Law Act … should be repealed. …

The government should cease all foreign aid immediately …

(Maiden Speech, Australian House of Representatives, 10 September 1996)


George Megalogenis


Pauline Hanson's timing was immaculately destructive.
(p 279)

[John] Howard couldn't bring himself to declare his outright opposition to Hanson because he felt he was being bullied by the media. …
[Indeed, he] shared the concerns of her supporters about the pace of cultural change.
He didn't see them as racists.
Yet by refusing to put Hanson in her place, Howard created a monster.
(p 280)

[Howard] was the last on his side to stand up to Pauline Hanson.
(p 300)
Paul Keating:
In a nation of immigrants, John Howard let the racism genie out of the bottle. …
[Events like] the Cronulla riot has in its antecedents the notion that somewhere in officialdom at the top of the country it's all right to think poorly of people who come from a different background to yourself.
This is, I think, a dreadful letdown for the country after it had succeeded so greatly in settling so many people from abroad, in perhaps the most successful multicultural experiment in the Western world.
(p 237)

For years [John Howard] had argued against Australia moving before anyone else in the region [to address climate change.]
[Suddenly, in the lead up to the 2007 election,] he wanted to go first …
John Howard:
Australia will … lead internationally on climate change … in a way that builds support for global action to tackle this enormous global challenge. …
[Our's] will be a world-class emissions trading system, more comprehensive, more rigorously grounded in economics and with better governance than anything in Europe.
Implementing an emissions trading scheme and setting a long-term goal for reducing emissions will be the most momentous economic decisions Australia will take in the next decade.
This emissions trading system … needs to last the whole of the twenty-first century if Australia is to meet our global responsibilities and further build our economic prosperity. …
Significantly reducing emissions will mean higher costs for businesses and households, there is no escaping that and anyone who pretends to do otherwise is not a serious participant in this hugely important public policy debate. …
[If] we get this wrong it will do enormous damage to our economy, to jobs and to the economic wellbeing of ordinary Australians, especially low-income households.
(3 June 2007)
(p 319)

[In December 2009, Tony] Abbott repudiated the Coalition's own 2007 election platform …
In a way this was more brazen than the Senate obstruction in the 1970s.
Back then there was an element of principle involved — the Coalition didn't agree with the Whitlam Program.
Abbott was opposing for the sake of it.
No previous opposition had overturned a policy that both sides had agreed to at the previous election. …
Tony Abbott:
[The argument for action on climate change] is absolute crap.
However, the politics of this are tough for us.
Eighty per cent of people believe climate change is a real and present danger.
(Pyrenees Advocate, October 2009)
(p 349)

Hawke and Howard are Australian triumphalists, who think there is nothing wrong with the nation as it is.
Keating and Fraser are Australian cosmopolitans, who see room for improvement.
(p 4)

The Australian Moment was thirty-five years in the making, starting with
  • the Whitlam government's tariff cut and the formal recognition of China in the early 70s;
  • the Fraser government's termination of the White Australia policy with the entry of the Vietnamese refugees in the second half of the 70s;
  • the Hawke-Keating government economic reforms between 1983 and 1996; and
  • the Howard government's consolidation of those reforms, and the super-charging of the immigration program after 2001.
(p 345)

(The Australian Moment, 2012)


Spreading the Pain


George Megalogenis:
The Liberals are never good at opposition because they do not have a reason for being — other than to govern.
They do not assume, once they are in power, that they are going to be out of power any time soon.
Now, this makes it very difficult for them to function in opposition because they are always looking for the Messiah to bring them back into power. …
John Howard taught Australians to measure their relationship with the government based on what they got back from the government, based on the handout.
Budgets were used to make sure voters were kept on side.

Ross Gittins [Economics Editor, Sydney Morning Herald]:
The cuts in funding were not just economic judgements.
They were also about John Howard's prejudices as to who was deserving and who wasn't.
Which of the groups, that if I offend them, it's not going to cost me much in terms of lost votes? …
We've had a government that's been obsessed by cutting government debt and not about … making sure we've got a very well educated nation.

John Howard [Prime Minister of Australia, 1996-2007]:
It was a very tough assignment.
We had tried very hard to spread the pain around.
And … I think we succeeded.
















(Nick Torrens, Liberal Rule, SBS, 2009)


Donald Horne (1921–2005)


The Bulletin's motto originally went:
Australia for the White Man and China for the Chows.
before [it was shortened to:]
Australia for the White Man
— a slogan that did not go until a change in editorship in 1961.
(p 112)

[A] comedy is being performed daily in that form of celebratory entertainment we call 'news'.
It is a drama in which the prime causes of Australia's predicament are presented as the
  • the power of the unions
  • the high rate of government spending and
  • excessive protection of Australian manufacturing …
[In] this drama, the principal basis for hope is seen as transferring money from the poor to the rich.
Yet the unions have nothing to do with the failure of [Australian business] to be innovative; there is not one example of the frustration of Australian technological ingenuity by a trade union.
{[As] to government spending [Australia's spectacular success in farming] would not have been achieved without wide government intervention — in developing
  • scientific research and extension schemes
  • huge infrastructure programs and
  • complex marketing organizations.}
[And as to free trade, the] fault lies not with not with protection, but with Australia's unique inability to produce industries worth protecting.
(p 6)

[In the 60s] talking about sport, money and motor cars took up so much of male conversation [in Australia] that sometimes to engage in conversation it was necessary to master these topics.
Not to have done so was not to be a man.
Interests ran so evenly throughout the community that not to share them was to be an outcast.
To be different was considered an affectation.
(p 30)

There was a lack of a general class of educated persons
  • who were familiar with the history of human thought (at least in outline) and saw their connexion with it,
  • who were familiar with analytical, categorizing and generalizing approaches,
  • who worked in many different fields in which the only common characteristic was a 'relatively high degree of abstraction or of ordering of some common experience',
  • who could apply knowledge and curiosity to the things they were interested in and
  • who, despite their occupational differences, could communicate with each other, as equals, in sustained and rigorous discourse on the affairs of the day.
It was a lack of this kind of class that could present a danger to the future of Australia.
(p 177)

Within his party [Menzies, as Prime Minister,] soon cut off from power or silenced all those who disagreed with him …
(p 120)

Party meetings were stage-managed so that opposition was not often expressed, and when it was expressed it was often made to look foolish. …
[In] a political party which contained many ex-officers he knew how to appeal to a sense of obedience and how to isolate the 'disloyal'. …
(Menzies himself was disloyal to Joe Lyons and Billy Hughes when they were his party leaders.)
(p 120)

He was a great actor. …
He lazy in his reading and … as little interested in matters of the intellect as most of his fellow citizens …
[Insofar] as he did have intellectual or artistic interests, they were extremely provincial.
He was essentially arrogant, although courageous, with a scorn for others.
He used his power to little purpose. …

[For] the most part ordinary Australians held him in little regard: … he was widely considered old-fashioned and had always been considered insincere. …

[The] Labor Party gave him election after election by being stupid — and in 1954 and 1961 by the bad luck of the electoral system. …
(p 122)

[Rather than using his talents to] exploit events in reacting to change … he seemed to prefer to frustrate talent and to surround himself with a firebreak of mediocrity.
In this he was [typical] of his generation. …
Throughout a period in which Australia was in need of orientation towards Asia and towards technology it was governed by a man who had deeply absorbed the provincial standards of Melbourne at the beginning of the century.
(p 123)

[It was during Menzies'] rule that Australia became a comparatively less prosperous country.
(p 124, emphasis added)

Menzies had obsolete and irrelevant values and ideologies.
His view of the world did not give him a real feel for the problems of the age and of Australia. …
[With his disinterest in Asia he] was a giant obstruction to a natural trend.
He held things up. …
His eyes were on London. …

[The] Age of Menzies was [characterised by:]
  • a running down of enthusiasm,
  • a deadening of approach to problems, [and]
  • a retreat.
(p 126)

Nothing befitted Menzies better than his going.
Perplexed by a changing world offering strange problems to which he could not be bothered finding a solution, he modestly slipped out of office …
(p 127)

It may be
  • that what really drives people into politics is the craving for excitement or status or money;
  • that the policies of such people are most often the product of faction rather than coherent belief;
  • that it is a necessary feature of political activity that, once power is achieved, its practice is essentially absurd, because it can usually not satisfy its public aspirations, except by accident;
  • that even 'believers', when exposed to this inner hollowness of power, necessarily become cynical and fraudulent, determined first to preserve their own power, with policy as an optional extra;
  • that the best one can hope for is that politicians will apply whatever values they have wherever they can, whenever the accidents let them.
Whether or not these are the inner secrets of politics, it was the belief of many Australians in the Age of Menzies that politics was essentially a fraudulent activity engaged in by self-seeking crooks.
(pp 155-6)

(The Lucky Country Revisited, Dent, 1987)


Australia is a lucky country run mainly by second-rate people who share its luck.
It lives on the other peoples ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise.
A nation more concerned with styles of life than with achievement has managed to achieve what may be the most evenly prosperous society in the world.
It has done this in a social climate largely inimical to originality and the desire for excellence (except in sport) and in which there is less and less acclamation of hard work.
According to the rules, Australia has not deserved its good fortune.

(The Lucky Country, 1964)


Robert Menzies (1894–1978)


Prime Minister of Australia: 1939-41, 1949-66

[The] kind of people I myself represent in Parliament:
  • salary-earners,
  • shopkeepers,
  • skilled artisans,
  • professional men and women,
  • farmers and so on.
These are, in the political and economic sense, the middle class. …
[They] are the backbone of the nation. …

Now, what is the value of this middle class, so defined and described?

First, it has a "stake in the country".
It has responsibility for homes —
  • homes material,
  • homes human, and
  • homes spiritual. …
My home is where my wife and children are.
The instinct to be with them is the great instinct of civilised man …
[The] instinct to give them a chance in life — to make them not leaners but lifters — is a noble instinct. …
If human homes are to fulfil their destiny, then we must have frugality and saving for education and progress. …
Human nature is at its greatest when it combines dependence upon God with independence of man. …

Second, the middle class, more than any other, provides the intelligent ambition which is the motive power of human progress. …

Third, the middle class provides more than any other other the intellectual life which marks us off from the beast; the life which finds room
  • for literature,
  • for the arts,
  • for science,
  • for medicine and
  • [for] the law. …

Fourth, this middle class maintains and fills the higher schools and universities, and so feeds the lamp of learning. …

That we are all, as human souls, of like value cannot be denied. …
But to say that the industrious and intelligent son of self-sacrificing and saving and forward-looking parents has the same social deserts and even material needs as the dull offspring of stupid and improvident parents is absurd. …

Are you looking forward to a breed of men after the war who will have become boneless wonders?
  • Leaners grow flabby;
  • lifters grow muscles.
Men without ambition readily become slaves. …
[Some say that when this war is over, the levellers will have won the day.]
My answer is that … men will come out of this war as gloriously unequal in many things as when they entered it. …

Individual enterprise must drive us forward.
That does not mean we are to return to the old and selfish notions of laissez-faire.
The functions of the State will be much more than merely keeping the ring within which the competitors will fight.
Our social and industrial laws will be increased.
There will be
  • more law, not less;
  • more control, not less.

(The Forgotten People, 22 May 1942)


Contents


A Political Wrecking Ball

Spreading The Pain

The Australian Moment

GEORGE MEGALOGENIS (1964)


Former senior writer, The Australian.

  • George Megalogenis and Professor Ian Lowe, Conversations, ABC Local Radio, 10 August 2012.
  • The Australian Moment, Conversations, ABC Local Radio.
  • The Australian Moment, Penguin, 2012.

    Born to Rule


    [Gough Whitlam's legislative program included:]
    • an education for all children and the scrapping of tertiary education fees;
    • an increase in the basic pension to 25% of average weekly earnings;
    • a universal health insurance scheme …
    • rebuilding infrastructure in the nation's cities and towns;
    • the immediate abolition of conscription; and
    • land rights for Aboriginal Australians.
    (p 24)
    Robert Drewe:
    [Labor has] restored some dignity to the conduct of our national affairs …
    Without precedent in the history of British-style governments, [the newly elected Whitlam government] set out to make up for lost time by immediately implementing its campaign promises.
    Australians blinked as within weeks we
    • recognised China,
    • ended conscription,
    • abolished race as a criterion of our immigration policy,
    • began reform of the health service,
    • supported equal pay for women,
    • abolished British honours,
    • increased arts subsidies,
    • put contraceptives on the medical benefits list,
    • took the tax off Australian wine,
    • moved to top the slaughter of kangaroos and crocodiles, and
    • searched for a new national anthem.
    (The Australian)
    (p 27)

    Whitlam's Program delivered the 1960s to Australia [in] a single three-year term.
    (p 90)
    Reg Withers [Liberal Leader in the Senate]:
    The Senate was deliberately set up by the founding fathers … to protect the interests of the smaller states from the excesses of the larger.
    Because of the temporary electoral insanity of the two most populous Australian states, the Senate may well be called upon to protect the national interest by exercising its undoubted constitutional rights and power [to block supply.]
    (8 March 1973)
    This betrayed a born-to-rule mentality on the part of the Liberals, and helps explain their subsequent attempts to topple Labor by any means [necessary. …]
    (p 46)
    Robert Menzies (1894–1978):
    The idiots who now run the Liberal Party will drive me around the bend …
    Their last move is to deny supply to the present government in the Senate.
    Now, this is something that shocks me.
    The House of Representatives is the House that is in charge of finances of the country.
    The Senate can quite properly reject individual bills, but for the Senate to deny supply to the government of the country is a matter without precedent.
    (8 April 1972)
    (p 49)

    A sense of lawlessness … overwhelmed global politics in the 1970s. …
    [This included] the dismissal of the Whitlam Labor government by the representative of the Queen of England in Australia, exercising powers on her behalf that the Elizabeth II did not have at home.
    (p 80)

    [John] Kerr worried that Whitlam might sack him first so he engaged in a bit of politics himself [— breaching] his duty to advise and warn his prime minister. …
    [Kerr further deceived Whitlam] by operating [on] a different timetable.
    Whitlam assumed that he had another week or two to go before supply ran out.
    Kerr, on the other hand, had set 11 November as the deadline because that was the last possible date for the calling of a general election before Christmas.
    An even-handed governor-general would have let Whitlam know what the real deadline was [and that dismissal was an option.]
    An even-handed chief justice of the High Court would have stayed out of the drama.
    But … Garfield Barwick relished the opportunity to become involved in what was a political matter, and when Kerr asked for advice he was happy to give it.
    (p 84)
    Garfield Barwick:
    [Whitlam would] have taken the rest of us down with him.
    You don't realise what the situation would have been if Gough had not been displaced.
    We'd have had chaos: public servants unpaid, bills unpaid, absolutely terrifying.
    (Paul Kelly, November 1975, Allen & Unwin, 1995)
    (p 377)

    [The economic torpor] that defined the period from 1972 to 1975, was [widespread in] the rich world.
    Australia's peak inflation rate of 17.6% was in the middle of the pack at the time, with the British going as high as 25.9% and the Japanese 24.8%, while the Americans reached 12.2%.
    Our unemployment rate hit 5.4% under Whitlam.
    It went to 9% under a Republican administration in the US, and 5.1 under British Labour.
    Only the Japanese and the Swedish were able to keep unemployment below 2% and slip the noose of 'stagflation'.
    (p 90)

    [No] Anglo government in power when stagflation set in won their next election …
    (p 87)


    The Age of the Rorter


    [Following Malcolm Fraser's victory in 1975, the] top end of town saw the restoration of conservative rule as a licence to recover their losses from the Whitlam years.
    (p 100)

    [So-called] 'bottom of the harbour' schemes [flourished,] in which companies were deliberately sunk into bankruptcy before their tax was due.
    The investor would strip the assets and on-sell the title of the worthless company to the scheme promoter, who would then claim the losses.
    The [Australian Tax Office] wanted tax cheats to face criminal sanction but the Coalition kept finding reasons to delay.
    The Country Party in Queensland and the Liberal Party in Western Australia led the backlash because some of their supporters were involved in the schemes. …

    The extent of the Coalition's weakness can be seen in the boom in tax avoidance schemes generally that occurred on its watch.
    The value of dubious deductions escalated ten-fold from [between 1976 and 1978. …]
    As many as 10,000 taxpayers a year were involved in 'identified' tax avoidance schemes. …
    [So, while] the trade unions [were being] lectured about wage restraint … the Coalition couldn't stop its own supporters from ripping off the budget.
    (p 101)


    Transitions: From Olive to Yellow
    Michael Mackellar [Labor Immigration Minister]:
    As a large, underpopulated, "white" country Australia would be especially vulnerable to international criticism if we failed to respond in a humane manner to the arrival of boat refugees from Asia on Australian territory. …
    The future numbers of [Vietnamese] refugees involved could be 750,000 at a conservative estimate [—] less a mortality rate [at sea] of 50 per cent. …
    (May 1979)
    The Coalition [opposition] supported the South Vietnamese because Australia had fought with them in that wretched war.
    (p 118-9, emphasis added)

    Australia's Vietnamese-born … reached 167,000 (0.9 per cent [of the population]) by 1996 …
    For the first seventy years of federation, Australia assumed that Asians were incompatible with our first-world bloodline.
    Before the Vietnamese came, we assumed our neighbours wanted to share our living standards but would cling to their culture, form ghettoes and create general mayhem. …
    [And, even though] the bar was set that much higher for the Vietnamese than for the Greeks and Italians [they] cleared it by the turn of the century as their children repeated the success of the Southern Europeans.
    By 2002, one of their early critics, John Howard, was ready to pay the Vietnamese, and the Chinese who followed them, the ultimate compliment.
    He said they had become 'the new Greeks and Italians'.
    (p 120)


    The Cult of Prosperity


    [At the 1987 election, Coalition Opposition Leader John Howard promised:]
    • tax cuts, which Labor did not match,
    • a rollback of the new taxes on capital gains and fringe benefits,
    • the removal of the asset tests on the age pension, and
    • the dismantling of Medicare.
    (p 184) [In 1985 Keating removed negative gearing] as part of his opening round of tax reforms. …
    No other comparable country allows landlords to deduct the interest rate and other expenses they incur to run a rental property against any source of income, even wages.
    The norm elsewhere is for the deduction to be allowed against the rental income only. …
    Paul Keating [Treasurer]:
    [Negative gearing] is one of the most blatantly abused tax shelters in the system. …
    In a capital-scarce country … capital must go to the most productive areas of the economy rather than into over-investment in real estate, or any other non-productive area of the economy. …
    [Housing is] an unproductive investment that had the power to destroy an economy. …

    [However, in 1987 it was reintroduced following] an incessant campaign from the housing lobby, which argued that there had been a landlord strike without the concession. …
    Australians felt too strongly about this particular tax break for Keating to be able to maintain the Treasury line. …

    [The budget announcement was an invitation to] existing home owners to buy second and third properties.
    [The resulting] landlord rush squeezed out new entrants to the market.
    [Over the next two years there] was a 30% reduction in … first home-owner grant recipients … as prices jumped by 60% …
    (p 190-1)

    [Each] generation needs reminding that house prices can fall.
    [In] the first decade of the twenty-first century, our property market is overvalued.
    Keating spread the fuel in the late '80s, then John Howard applied the flame-thrower in the next cycle [by halving the capital gains tax and doubling the first home owners grant.]
    (p 193)

    [By the time Alan] Bond eventually went to jail, the total losses of his various ventures were put at $5 billion.
    [Christopher] Skase lost $1.2 billion and then fled to Spain to avoid prosecution. …
    The four largest banks wrote off … more than $17 billion in bad loans between 1989 and 1993.
    [ANZ and Westpac] came close to insolvency. …
    [Two] state banks went out business with a further $6 billion in losses, [which] had to be underwritten by taxpayers.
    [The West Australian premier,] Brian Burke, went the same way as Bond — to prison.
    (p 197)

    [But] nothing the Labor premiers got up to in the '80s matched the corruption of Joh Bjelke-Petersen's government in Queensland.
    [Bjelke-Petersen] accepted money in brown paper bags from business associates … and only avoided a criminal conviction because a National Party supported happened to be on the jury in his perjury trial. …

    Deregulation taught the [regulatory authorities] that while the market should be encouraged, it [should] never be trusted. …
    Australians had invested too much faith in the entrepreneur in the 1980s.
    (p 198)

    The grasping for capital gain was accompanied by an outbreak of xenophobia that the [major] parties found impossible to resist.
    The post-war bipartisanship on immigration was shattered on 1 August 1988 when John Howard called for a slowing in Asian intake.
    (p 199)


    The Last Serious Election


    [Prime Minister Keating's proposed superannuation guarantee] was in the same category as Medicare: the Coalition hated it …
    John Howard [Opposition Industrial Relations Spokesman]:
    The obligation [of the Coalition is] to ameliorate the desperate situation that Australia faces.
    • Stopping a national wage increase would help,
    • cutting immigration dramatically would help,
    • adopting our youth wage proposal would help, [and]
    • putting off this stupid superannuation guarantee levy that costs tens of thousands [of jobs] will help. …
    (10 July 1992)
    [The super guarantee] ranks as Keating's most publicly popular reform, and it served as an important backstop for the Australian economy during the global financial crisis in 2008-09. …
    [One] of the aims of compulsory super was to reduce Australia's reliance on foreign savings, and the GFC demonstrated the foresight of that reform.
    (p 242-3)

    [Jeff Kennett's Coalition government came to power] in Victoria on 3 October [1992. …]
    Victorians were ready for change, but they didn't expect their new government to clobber them with a secret agenda for cut-throat deregulation. …

    Barely three weeks after he was sworn in, Kennett pulled out the razor …
    On 28 October,
    • Victorian's electricity, gas and water charges were increased by 10 per cent;
    • motor vehicle registration fees were doubled; and
    • a $100-per-household 'deficit reduction levy' was imposed.
    The following day,
    • one in twenty of the state's public servants were sacked, and those who survived the cull had their 17.5 per cent holiday-pay loading taken away.
    • Private sector workers were told they would lose their weekend penalty rates.
    On the third day of the revolution … Kennett rushed through legislation awarding generous pay rises to senior government members, including a $160-a-week bonus for the industrial relations minister, Phil Gude. …

    None of these changes had been mentioned in the state election campaign, and the public responded with the biggest street protests since the Vietnam War moratorium.
    [The nation feared] that the Kennett program [was] a full dress rehearsal for [Opposition Leader John Hewson's] Fightback and Jobs-back [policies at the federal level.]
    (p 245)

    Rarely does a democratically elected government show such a different face after it wins. …

    Keating secretly admired Kennett's method [but] he couldn't abide Kennett's assault on the trade unions.
    In quick succession, Keating offered Victorian workers protection under the federal system, while Kennett backed down on the pay rises for himself and his ministers.
    So economists didn't get to test the proposition that cutting living standards for workers while increasing the remuneration of their boss — in this case, the government — leads to a more productive society.
    (p 246)

    [Hewson passed] judgement on entire sections of the community.
    His most unusual critique was aimed at the one-third of the population that didn't own their own home.
    John Hewson:
    In any street, of course, it's always easy to tell the rented houses [—] they are the ones where
    • the lawn isn't mowed,
    • the plants aren't watered and
    • the fences aren't fixed.
    Hewson's approach anticipated by more than a decade the partisanship of the United States, where the voters of the other side are deemed to be unAustralian.
    (p 247)

    New South Wales and Victoria are the two most cosmopolitan states in the nation, and Keating's more compassionate pitch rang true with the tertiary degree holders and the non-English-speaking immigrants alike.
    In the mining states, which boasted fewer university-educated and fewer olive- and yellow-skinned immigrants than the national average, Keating's world view was never popular. …

    The rise of the suburban middle class in Sydney and Melbourne had ended the conservative hegemony in '72.
    It was Whitlam's agenda to improve services, from sewerage to higher education, that defined Labor's modern calling.
    Keating updated the message for recession by presenting Labor as the party of the social safety net.
    (p 248)

    [The] issue that swung the most important votes Labor's way for conservative women was Medicare.
    [At the 1993 election] Keating's was the first sitting government since Harold Holt's in 1966 to record a swing to it.
    (p 249)
    John Howard:
    You should never underestimate the ongoing sensitivity of the electorate towards health policy …
    That's the reason why when I became leader in '95 I resolved that we had to reverse our de facto commitment to getting rid of Medicare, because I was convinced the Australian public wanted to keep it.
    And I think the health policy we produced in '93 made a bigger contribution to our defeat than many people [realised. …]

    Keating was the first prime minister since Robert Menzies to leave the nation in better shape than he found it. …
    In fact, the 1990s would be the only decade of the post-war era in which Australia's productivity grew by more than the rich world average.
    (p 261)


    Passing The Tests


    [The Port Arthur massacre took place on the 28 April 1996.]
    The gun lobby assumed that Howard would back down, but it underestimated his resolve and the role that public opinion played in reinforcing it.
    (p 274)

    Treasury had greeted Howard and Costello on the day after the election with the news [of a $7.6 billion budget deficit. …]
    (p 275)

    Keating had said the budget would be balanced in underlying terms in 1996-97, and he was correct based on the numbers his government had been given in May 1995.
    But there'd been yet another slippage of revenue in the New Year [and Keating had not had the foresight] to demand an update from Treasury for the election …
    (p 276)

    On 20 August 1996, [Treasurer Peter] Costello announced [spending cuts] valued at $5.2 billion …
    The single largest cut was to tertiary education funding.
    (p 277)

    The budget was balanced a year ahead of schedule, and then it whirred back to surplus as Keating had said it would [reaching $13 billion by 2000.]
    Costello subsequently reversed many of the spending cuts [— but] not those to the universities or to the public broadcaster, the ABC.
    These choices were ideological. …
    The savings from universities … were not banked, but used to promote private sector schools. …

    Labor had reduced the size of the national government from 27.3 per … to 22.7 per cent [of GDP in the 5 years to 1989-90.] …
    The Coalition returned the benchmark to 23.1 per cent of GDP by 1999-2000. …

    The insistence on surplus budgeting is an enduring electoral trait that has served Australia well over the past generation. …
    The true value of our thrift would be apparent during the global financial crisis, when Australia avoided not just recession, but the large public debts that came with it.
    (p 278, emphasis added)

    [Howard built] a middle-class welfare system that would become more generous than anything Gough Whitlam had advocated.
    (p 279)


    He Of The Never Ever


    The policy John Howard relied on to reconnect with middle Australia was the goods and services tax.
    [The only problem was that] he had ruled out a GST for all time at the previous federal election. …
    John Howard:
    There's no way that a GST will ever be part of our policy. …
    Never ever.
    It's dead. …
    (2 May 1995)
    (p 288)

    [In 1997, he] began to redefine his 'never ever' promise to mean that he wouldn't be introducing a GST in his first term.
    He would seek an explicit mandate for tax reform in a second term.
    What could be more democratic?
    It was a brave move, but nonetheless disingenuous.
    The Coalition wouldn't have won by as many seats in '96 if voters thought the GST was an option for a second term. …

    The GST had two things going for it as a reform.
    It replaced less efficient taxes, and the revenue it generated would increase more or less in line with economic growth, thus relieving future governments of the burden of inventing new levies to balance the budget each year.
    The old system taxed some goods at the federal level, while the states taxed some services, such as hotel beds.
    The GST became official government policy in August 1997 after the High Court ruled that $5 billion in state indirect taxes on tobacco, alcohol and petrol had been collected in breach of the constitution.
    (p 289)

    [In 1998 voters were given] an insight into the values of the main political parties.
    Howard was giving more money to families where the father worked and the mother stayed at home …
    Beazley favoured dual-income families.
    Howard promised the largest tax cuts to those on more than $50 000 a year …
    Beazley offered more to lower- and middle-income earners. …

    The public didn't share Howard's GST obsession.
    There were surely more important things to argue about than tax reform — most notably, future-proofing the economy against further Asian-style financial crises, and using the proceeds of growth to settle Australia's longstanding environmental problems, from water supply to climate change, which was being treated as a serious issue at that time. …
    {[However, the tax cuts that came with the GST] would help Sydneysiders meet their mortgage repayments.}
    The Coalition lost [the popular vote] by 51 per cent to 49, but still held on to government.
    (p 290)

    The great economic reform era that began [with Whitlam's tariff cuts in 1973] ended in [2001 with an] avalanche of post-GST bribes …
    While Howard searched for the next payment to make to his target audience, Costello tried to reinforce a sense of purity by cutting income taxes as well.
    The upshot was [that] taxes were no longer being collected to provide public services, or to build buffers in good times to deploy in bad times, but to churn back to the electorate.
    The budget became a frequent-voter program, with rewards based on loyalty, not need.

    A carefully targeted tax and handout system should reduce welfare dependency as affluence spreads.
    The Coalition sacrificed this principle by increasing the number of households that received more in benefits than they paid back to the government in income tax.
    The ranks of the income tax-free club had been steady for most of the '90s.
    The Keating government had left the figure at 38 per cent of all households in 1996, when the unemployment rate was around 8 per cent.
    This included pensioners and the poor, but not those with full-time jobs.
    The Howard government lifted this benchmark by 4 percentage points to 42 per cent by 2004, when unemployment had fallen below 6 per cent. …
    (p 301-2)

    [Tellingly, it was those families with at least one parent in work] who moved from paying some tax in 1996 to getting more than they put in by 2004 …

    The reform decades of the 1980s and 1990s had promised a more productive nation that could compete with the rest of the world. …
    Subsidies that the Hawke and Keating governments had taught us to live without were being revived by Howard in an act of electoral appeasement.
    The defining symbols were the first home-owner grant and the baby bonus.
    The latter handout was promised at the 2001 election and supersized three years later.
    [While] the baby bonus as a vote winner [it was also] bad policy, because it reverted to the mentality of the 1970s, when every family was told it deserved to gorge on the magic pudding of government protection.
    (p 303)


    Tuning In To Globalisation


    [Several weeks before 9/11, a] boat carrying 460 mainly-Afghani asylum seekers got into difficulty in the Indian Ocean and was rescued, at Australia's request, by the Norwegian vessel MV Tampa.
    The people were meant to be taken back to Indonesia, but they insisted that the Tampa continue to their intended destination, Australia.
    Howard told them to stop, and SAS troops boarded the vessel to make sure the message was understood.
    After a frantic ring-around to find a neighbouring country that would take them for processing, Nauru agreed to become our detention centre. …

    Malcolm Fraser had accepted the Vietnamese boatpeople in the late '70s and the public didn't punish him for it.
    But the Tampa boatpeople were met with a diametrically opposed set of values.
    The truth here is that leadership dictated the national response, not the other way around.
    Howard set the tone and the electorate followed him. …
    (p 306)

    Howard indulged the electorate by breaking a longstanding convention of Australian politics that a handout to voters had to be matched by an offset elsewhere in the budget.
    The surplus, which began building again in 2002, was returned to voters as tax cuts and cash payments that created their own bubble logic: to impress the public, every subsequent handout had to be more generous than the last. …

    Bill Clinton had completed his eight years as president with the largest surplus in US history — $236.2 billion, or 2.4 per cent of GDP in 2000.
    Bush rammed unfunded tax cuts through Congress, and few of his Republican colleagues seemed to mind the deficit that came with them.
    Unlike Howard, who was prepared to spread the benefits across the income ladder, Bush aimed his tax cuts almost exclusively at the top.
    When Bush stood successfully for re-election in 2004, the deficit was $412.7 billion, or 3.5 per cent of GDP.

    LBJ's pursuit of the Vietnam War and the Great Society helped inject the poison of stagflation into the global economy in the second half of the '60s.
    The Bush wars in Afghanistan and Iraq, combined with a borrowing binge at home, spread the cancer of large, unsustainable government debts across the Western world in the noughties.
    (p 311, emphasis added)

    [In 2005 WorkChoices] was sprung on the public with no warning and no debate.
    Howard had, in fact, explicitly ruled out another wave of reform. …

    [Based on the Jobsback policy of 1992, employer] and employee would be trusted to bargain in good faith, without the bureaucracy dictating what was on and off the table.
    WorkChoices removed the 'no disadvantage test' from the government's previous legislation, which prohibited any deal that involved a reduction in pay or conditions.
    It also allowed firms with up to a hundred employees to sack whomever they wanted, without having to follow the process for a so-called 'fair dismissal'. …

    WorkChoices was rushed through the parliament with an almost obscene haste.
    (p 313)

    [The Australian Council of Trade Unions] spent $8 million of its members' money on its radio and TV campaign. …
    The Coalition government's taxpayer-funded campaign to defend WorkChoices was worth $121 million, while business groups kicked in with their own campaign.
    The stench of American big-money lobbying wafted through this argument.

    The unstated but dominant reason for WorkChoices was … to break what [little] remained of trade union power. …
    [Nevertheless, the] public sensed that Howard was taking the side of the boss for [purely] ideological reasons …
    (p 314)

    [However,] the biggest problem was that WorkChoices sought to solve a weakness in the Australian economy that no longer existed.
    The last wages breakout had occurred in the early '80s.
    Howard should have been thinking beyond his [neoliberal] ideological comfort zone … to consider the new reform challenges that flowed from China.

    {[Despite the subsequent electoral defeat, Howard still believes] the policy was sound and wants the Coalition to revisit it in the future. …}
    (p 314)

    The Reserve Bank became increasingly wary in 2006 and into 2007 about the government's willingness to throw another billion at the electorate. …
    Every time Howard spent, the Reserve Bank slammed the monetary policy brake.
    What WorkChoices took with one aspect of government policy, Howard tried to give back with tax cuts, which in turn the Reserve Bank took away again with higher interest rates.
    (p 316)
    Ken Henry [Treasury Secretary]:
    [In an election year] there is a greater than usual risk of the development of policy proposals that are, frankly, bad …
    Expansionary fiscal policy tends to crowd out private activity …
    It puts upward pressure on prices, which, all things being equal, puts upwards pressure on interest rates. …
    (April 2007)
    The leaking of his private speech echoed the Treasury wars with the Whitlam government in the 70s.
    Henry was annoyed that someone in Treasury made the speech public.
    The prime minister was angrier still and drew on the spirit of the WorkChoices to reduce Henry's pay by cancelling his performance bonus.
    (p 317)

    Although he didn't see the connection between the two, Howard was adding to the interest rate burden without a coherent plan for dealing with the mining boom.
    (p 319)

    John Howard was responsible only for the tail end of the reform project, but he managed to claim full credit for the electoral benefits that flowed from the long recovery.
    (p 321)

    [Labor's Kevin] Rudd was an opportunist with a foul temper.
    He bullied staff and badmouthed his own colleagues.
    Press gallery journalists swapped examples of Rudd's self-regard. …

    [In October 2007, Howard] promised the largest election tax cut in [Australian] history …
    (p 323)

    Australians had never seen election promises on this scale before [— including] a $2 billion a year handout to parents who sent their children to private schools …
    (p 325)

    Over the course of the campaign, Howard had out-spent Rudd by just $2 billion a year — $15 billion versus $13 billion, with each man's tax cuts accounting for the lion's share of the total.
    (p 326)

    [For Howard,] America was a friend, right or wrong, so we went to Iraq to topple a regime that posed no threat to us … looking for weapons of mass destruction [that didn't exist].
    (p 329)


    The Last Rich Nation Standing


    [In September 2008, Lehman Brothers collapsed with debts totalling] US$613 billion — around half the size of Australia's annual GDP.
    [Panic] spread across the globe [as bank after bank] realised they were entangled in a web of bad loans that could bring them all down together.
    (p 331)
    Kevin Rudd:
    Forget about what is going to win us the news [cycle] or lose us the news [cycle!]
    What is the most responsible thing to do?
    The comment … confirmed that the government took a short-sighted view of every other issue.
    Rudd had run the government the way he had run for office, on the principle of continuous campaigning.
    Each day was devoted to winning more favourable mentions in the media than his opponent.
    (p 333)

    [By offsetting the fall in private investment, public stimulus spending sealed Australia's] Great Escape from the GFC. …
    So mild was the Australian downturn that the unemployment rate didn't even cross 6 per cent. …
    By the end of 2010, our unemployment rate was back at 4.9 per cent — in the US it was still 9.4.

    One of the myths that has developed since … is that China saved us.
    (p 343)

    But China had a bigger slowdown than the United States in the first half of 2009.
    The quarry wasn't as important as people thought. …

    The Rudd government deserves credit, primarily because it took the advice given to it to deploy the fiscal buffer it had inherited from the Howard government.
    A re-elected Coalition government might not have been so willing to listen.
    Howard, in particular, would have been carrying potential grudges against
    • Ken Henry [— the Treasury secretary who had criticised the Coalition in 2007] and
    • Glenn Stevens — [the Reserve Bank governor who] had increased interest rates in the election campaign. …

    The institutional heroes of the GFC were undoubtedly the Reserve Bank and the Treasury.
    Monetary and fiscal policy moved in tandem for the first time.
    (p 344)

    One million new Australians were added to the population between 2001 and 2008, with almost 300,000 of those coming from China and India. …
    (p 345)

    Total net government debt was forecast to peak at $132.6 billion, or 8.9 per cent of GDP, by 2011-12.
    Compared to the rest of the developed world, where government debts of up to 100 per cent of GDP were commonplace, Australia should have been pleased.
    But at home, the opposition was able to blame Labor — even though these were Howard's structural deficits …
    (p 348)

    [In 2010, when] Rudd walked away from his conviction on climate change, he unnerved the nation and placed a time bomb under his own leadership.
    (p 350)

    In May 2010, he announced a new federal tax on mining profits to replace the state-based royalties which were levied on production.
    The policy was soundly based, because it offered a mechanism to catch a greater share of the revenue windfall for the budget, without hurting the viability of miners.
    The tax couldn't be passed on to consumers here because the Chinese were doing the buying.
    The money collected could be either set aside or spent on behalf of industries that were being squeezed by the boom.
    It was an intrinsically popular idea [that failed in the execution].
    (p 351)

    To those who practised or covered politics, the leadership change [in June 2010] seemed a perfectly logical outcome.
    Rudd had lost his confidence and had stopped making decisions.
    The polite explanation was he had suffered burnout. …
    But to the public his demise was a shock — even though it was their opinion of Rudd, relayed through focus groups, that had convinced Labor to change prime ministers.
    (p 352)

    [Following Julia Gillard's the victory in 2010, Abbott] opposed everything Labor did, even its modest levy to help pay for the clean-up of Queensland after the devastating floods in the summer of 2010-11.
    (p 360)

    [In the 1970s, stagflation discredited:]
    • [the] government,
    • [the] bureaucracy,
    • the judiciary and
    • the financial sector.
    Arguably, only the media played a constructive role in debating the problems of the rich world.
    Today, the media is an intrinsic part of the problem. …

    On 11 December 2005, a mob tried to purge [Cronulla beach in southern Sydney] of Australians of Middle Eastern background.
    They swarmed at anyone with brown skin.
    The following night, Lebanese-Australian youth returned to the suburb in convoys, firing guns into the air, and smashing cars.
    (p 361)

    More than 270,000 text messages were sent to mobiles phones across Sydney, calling for a show of strength at the beach.
    [Three days before the riots, radio host Alan Jones was reading out inflammatory SMS text messages on broadcast radio:]
    Alan Jones:
    Now, it's got pretty nasty when you start talking like this. …
    Anonymous:
    This Sunday, every Aussie in the Shire get down to North Cronulla to support Leb- and Wog-bashing day.
    (8 December 2005)

    John Howard:
    I do not accept that there is underlying racism in this country …
    (p 362)

    [While] Jones didn't endorse that sentiment, [broadcasting incitements to racial violence is prejudicial to public order and safety:]
    Australian Media and Communications Authority:
    [On the 7th of December 2005, 2GB] broadcast a program that was likely to encourage violence or brutality …
    [On the 7th and 8th of December 2005, 2GB] broadcast a program which was likely to vilify people of Middle-Eastern background on the basis of ethnicity …
    (Report 1485)
    The logic of foul-mouth tribalism leads, inevitably, to a coarsening in the political debate.
    By 2011, Jones was [further poisoning the civil discourse by] quoting colourful listener feedback [that demeaned] Julia Gillard. …
    Anonymous:
    Please, please don't have that lying bitch on your program again, I had to move the dial to another station.
    I guess it was worth the once to show us all what a [beep] lying, [beep] backstabbing, [beep] treacherous, [beep beep] she is.
    This is where the media is most certainly to blame in the digital age.
    Newspapers and radio and television stations have surrendered their online sites to [an avalanche of anonymous abuse.]
    (p 363)


    Conclusion


    Rudd shone during the GFC because he took advice.
    (p 366)

    The Howard government left the nation exposed by spending the first round of the resources windfall. …

    The ordeal of the 'recession we had to have' taught us that financial markets have to answer to independently minded regulators. …

    Gough Whitlam's push for the poor to study at university and for women to re-enter work after having children combined with Malcolm Fraser's active termination of the White Australia policy to bless us with a population with the right mix of skill and temperament to survive the trials of globalisation.
    [And, after setting aside his misgivings about Asian migration,] Howard saw this social reform to completion …

    [Growth] in this decade will not come as easily as it did in the last.
    Money needs to be put aside to invest on behalf of our children [— demanding] a level of restraint [to which we are unaccustomed]. …

    Sitting back and allowing the mining sector to dictate [our relationship Asia] will deny the other 90 per cent of the economy a productive engagement with the region, and condemn Australia to a new form of insularity.
    The alternative to national greatness is to become the rich white trash of Asia.
    (p 367-8)

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