With taxes, health care and climate change emerging as key issues in the upcoming federal election, we’re running a series this week looking at the main issues that swung elections in the past, from agricultural workers’ wages to the Vietnam War. Read other stories in the series here.
The 1993 election is known as the “unlosable election” for the Liberal Party. It highlights how the course of a campaign can shift voter opinion to produce a result few would have predicted a month out from polling day.
As the current election campaign unfolds, a foreboding message may resonate from the 1993 campaign. Namely, that being the clear frontrunner tends to foster complacency, and touting a “big target” invites more intense scrutiny.
Labor in 1993 was a triumph, comparable to Whitlam’s 1972 win. After a year languishing in the polls, Labor won a fifth term and increased its majority by two seats.
In his victory speech, Prime Minister Paul Keating declared it “the sweetest victory of all”, and “a victory for the true believers – the people who in difficult times have kept the faith”.
For some, these words reflected one of the great Labor speeches; for others, they reflected the hubris that would eventually envelop the Keating government.
To win a fifth term having recently presided over a severe economic recession and a bitter leadership challenge was unprecedented. The combination of these factors should have sunk the Keating government.
Why Labor should have lost
The early 1990s recession was far worse than the 1974 or 1982-3 recessions that contributed to the Whitlam and Fraser governments’ defeat. And Keating appeared heartless when, as treasurer in November 1990, he remarked:
This is a recession that Australia had to have.
A year later, he challenged Prime Minister Bob Hawke in a leadership spill and defeated him by 56 votes to 51.
For the nation, mired in recession, Labor seemed indulgent and power-hungry. It was no surprise that the Liberals led comfortably in the polls.
Hewson’s policy platform was a ‘large target’
Keen to move beyond the bitter rivalry between Andrew Peacock and John Howard during the 1980s, the Liberal party turned to John Hewson after the 1990 election.
Hewson was inexperienced in politics, having only entered Parliament in 1987, but skilled in his working life as a merchant banker, former advisor to John Howard and professor of economics at UNSW.
Hewson was a visionary who managed to unite both the Liberal and National Parties around one of the most significant policy platforms ever enunciated in Australian politics: a 650-page document titled “Fightback!”.
Fightback’s enduring virtue lies in its coherent articulation of reform, accompanied by detail. Its problem was that it pushed too far into the realms of a neo-liberal economic reform. With such a “large target” as Fightback, Keating was able to make the opposition the issue during the campaign.
Fightback’s centrepiece was a 15% GST, set alongside big personal income tax cuts. Fightback also detailed the introduction of enterprise bargaining, cuts to Medicare bulk billing, the sale of government owned assets, and other commitments aimed at limiting the size of government expenditure.
Over the course of 1992, voters observed a colossal political struggle as Hewson worked at selling Fightback to voters, and Keating warmed to the task of dismantling its vision. This would reach a crescendo in February-March 1993, with one of Australia’s most memorable election campaigns.
The Australia Election Study surveys show this election stood out because voters recognised that there was “a good deal of difference” between the parties.
Different styles of leadership
Arguably, this was not just about policy, it was also about the fact that Hewson and Keating had different leadership styles.
Hewson was committed to “policy as an end in itself” and he tended to shun the hard sell, preferring a more earnest type of advocacy delivered through public rallies.
Hewson’s problem was with Fightback’s complexity. According to the political journalist Laurie Oakes, he often appeared “mean and shifty” when he tried to explain the details. This was most evident when he tried to explain on television how the GST would apply to a birthday cake.
Keating fundamentally believed that the strength of political leadership would prevail. Lampooning Fightback, Keating said:
If you don’t understand it, don’t vote for it; if you do understand it, you’d never vote for it!
With his superior command of rhetoric, Keating framed the campaign as one about core Australian values. Keating shied away from defending Labor’s achievements, instead making his opponent the focus. He championed Australian egalitarianism while painting Hewson as a radical. Keating once referred to Hewson as “the feral abacus”, a theorist hopelessly out of touch with average voter.
By the eve of the election, the parties were evenly balanced, but pundits were still predicting a Liberal win.
In the speech, Hewson reflected on the purpose of Fightback. He said it was to convince voters “in the midst of the worst recession in 60 years” that significant change was required, that the Liberal Party was once again credible because it “stood for something”, and that it was prepared to “challenge vested interests”.
He also said that entering government required a mandate based on detailed policy if there was to be any hope of getting legislation through the Senate. It is worth noting how pertinent this last point is today.
Since Fightback, no opposition has put forward such detailed policy. Putting aside one’s own ideological preferences, Hewson’s Fightback should be viewed as positive because voters deserve to be presented with detailed policy choices rather than just political spin.
With taxes, health care and climate change emerging as key issues in the upcoming federal election, we’re running a series this week looking at the main issues that swung elections in the past, from agricultural workers’ wages to the Vietnam War. Read other stories in the series here.
In 1961, the Australian Labor Party came within a whisker of an unlikely victory.
At the time, the ALP was still recovering from a split with the Democratic Labor Party and was not viewed as a serious threat to the Liberal-Country Party Coalition. The DLP was a conservative, Catholic-based, anti-communist party that consistently gave its preferences to the Coalition over the ALP.
In the 1958 federal election, aided by DLP preferences, the government of Robert Menzies was returned to power in a major swing against the ALP. The Coalition gained 54% of the two-party preferred vote, with 77 seats in the House of Representatives to the ALP’s 45.
What nearly cost the Coalition the next election, though, was the Menzies government’s “credit squeeze”.
The end of import restrictions and the credit squeeze
Despite its huge electoral advantages, the Menzies government began to encounter political problems in the early 1960s. From 1952 to 1960, the Menzies government had been forced to license imports because Australia’s rural exports did not earn enough to pay for its imports. An opportunity to abolish import licensing came at the end of the 1950s, when inflation started to rise.
Harold Holt, the then-treasurer, urged the government to end import licensing to boost imports and thereby dampen inflationary pressure. Sir John Crawford, the secretary of trade, disagreed. He feared a blow-out in the balance of payments, and urged caution and a gradual easing of import controls.
Despite Crawford’s objections, the Cabinet preferred Holt’s plan and abolished import restrictions in February 1960. The result, as Crawford predicted, was a balance of payments crisis. In November 1960, Menzies took drastic action, sharply increasing sales taxes and imposing restrictions on credit to bring the economy back into balance.
The consequence of the “credit squeeze” was a minor recession. Unemployment, rose to 53,000 people at the end of 1960, and 115,000 at the end of 1961. The Menzies government’s longevity after 1949 had partly been due to its achievement of high levels of employment. Even moderate levels of unemployment posed a significant danger for a government that would have to face re-election in 1961.
I do not think we will be beaten. There are no circumstances which would suggest even a remote possibility of the opposition winning 17 seats.
The 1961 election
The ALP, led by Arthur Calwell and Gough Whitlam, seized the opportunity given them by the Menzies government’s apparent mismanagement of the economy. Calwell, despite being a far less impressive television performer than Menzies, campaigned doggedly on the economy. Calwell also received support from the Sydney Morning Herald, whose owner, Sir Warwick Fairfax, had become disenchanted with Menzies.
Calwell promised that, if elected, the ALP would reduce unemployment through a series of selective import controls and expanded social services. Menzies lampooned Calwell’s ideas as pie-in-the-sky rhetoric, and broadened his attack to include the ALP’s alleged closeness to the Communist Party.
Queensland was the key state. The Coalition held 15 of the 18 Queensland seats in the House of Representatives, and the ALP needed to win a swag of them to have any chance of victory. But election observers predicted that the ALP would not pick up more than two or three in Queensland, and that the ALP’s overall gains would be limited to seven or nine seats.
Following a frantic whistle-stop tour by Whitlam to north Queensland, the results of the December 9 election surprised everyone. For days, the election hung in the balance.
In the end, the ALP won a total of 15 seats, eight in Queensland. But the vote count finally tipped in Menzies’ favour when Billy Snedden was returned in Bruce and James Killen in Moreton, both supported by DLP preferences.
Menzies was so shell-shocked by the results that he did not congratulate Killen on his victory, forcing Killen to concoct a story that the prime minister had famously greeted him with the words:
Killen, you were magnificent.
Consequences of the election
In the long-term, Menzies and his colleagues were able to turn the near-defeat in 1961 into another decade of Coalition rule, aided by further electoral victories in 1963, 1966 and 1969.
When Labor was finally able to win office in 1972, it faced three years of unremitting hostility from the Senate, non-Labor states and an opposition that regarded an ALP government as so exceptional as to be illegitimate.
If Labor had won in 1961 and lasted until 1964, or perhaps longer, could this have had a longer-term impact on the country? Would Australia have entered the Vietnam War? Would conscription have been introduced? Would Australia have officially recognised the People’s Republic of China a decade earlier?
Menzies’ legacy also would have been cut short by what would undoubtedly have been considered one of the biggest election upsets in Australian history.
With taxes, health care and climate change emerging as key issues in the upcoming federal election, we’re running a series this week looking at the main issues that swung elections in the past, from agricultural workers’ wages to the Vietnam War. Read other stories in the series here.
In the 1949 federal election, a Liberal-Country Party Coalition led by Robert Menzies defeated the Australian Labor Party, ending Ben Chifley’s four years as prime minister. Menzies also dashed expectations that Labor had established itself as the “natural party of government” following decisive victories in 1943 and 1946.
Prior to the 1949 election, Labor had led Australia successfully through the second world war. The popular mood was solidly behind its agenda of full employment and social welfare.
The Chifley government only began to encounter troubled waters in 1947. Its bid to nationalise the private trading banks swung popular opinion behind the Liberal Party. But after the High Court’s invalidation of bank nationalisation, the fortunes of the Labor Party revived. A Gallup poll in April 1949 showed a narrow lead for Labor and presaged a tight contest at the end of the year.
Historians have tended to attribute Menzies’ eventual victory to issues like bank nationalisation and the differences between the major parties over how to handle the Australian Communist Party. While these were undoubtedly factors in the election, the decisive issue was something else: petrol rationing.
After the war, Australia continued to import most of its goods from Britain, with the exception of essential items such as petrol and news print. Petroleum, sourced overwhelmingly from US producers, could only be purchased with dollars. But Australians could not secure enough dollars to meet all their petrol needs. This meant that Canberra had to go to the British Treasury every year to ask for extra dollars – a situation that soon became unsustainable.
Britain was virtually bankrupted by the second world war. In an effort to avert a financial crisis, British leaders convened a meeting of Commonwealth finance ministers in July 1949 and asked the group to impose restrictions on dollar imports for the common good.
To meet the British government’s request, Chifley had to overcome a major hurdle: the High Court’s invalidation of federal petrol rationing regulations. Menzies himself had introduced the rations as a wartime measure in 1940. But in June 1949, the High Court ruled that the rationing of petrol could no longer be justified in peacetime. To work around the court ruling, Chifley had to secure the agreement of the states. Once he did, petrol rationing was again in force across the country.
But by that time, Australians were hooked on petrol. In 1949, about one in every 10 Australians had a car in the garage. When rationing came back into effect, it sparked a national crisis. Motorists suddenly found it harder to fuel up than at any time during the war.
The 1949 election and its consequences
Following an electoral redistribution in 1948, the size of the House of Representatives had increased from 74 to 121 seats. A September 1949 Gallup poll estimated the Chifley government still had enough electoral fat to withstand a 3% swing against it in the enlarged House.
It was not enough. In the campaign speeches in November 1949, the Chifley government stood on its record. Menzies, meanwhile, pledged to do away with petrol rationing, in part by drawing on defence oil reserves held in Australia.
This bold, some might say reckless, move by Menzies was precipitated by Arthur Fadden, leader of the Country Party, who had earlier promised in his own campaign speech to eliminate petrol rationing. Fadden would later write:
I am inclined to think that petrol rationing was the rock on which the government finally foundered.
Opinion polls taken after the election confirmed Fadden’s assessment. The Coalition swung 6.61% of the popular vote to its side. Of the voters who switched allegiances, 60% said they considered petrol rationing when casting their votes. At the election on December 10, Menzies’ Coalition won 74 seats to the ALP’s 47 – a sizeable majority.
After the Coalition victory, Menzies followed through on his campaign promise and brought an end to petrol rationing. And the economy began to look up. The Korean War ushered in a boom in the early 1950s. A massive increase in Australian wool exports, as well as other raw materials from British Commonwealth countries, helped bring about a revival in the fortunes of the sterling area.
So, the gamble by Menzies and Fadden on petrol rationing proved lucky. Far from confirming the ALP as the “natural party of government”, as would be the case in New South Wales from 1941 to 1965, the 1949 election actually began a period of more than two decades of Liberal-Country Party rule.
With taxes and health care emerging as key issues in the upcoming federal election, we’re running a series this week looking at the main issues that swung elections in the past, from agricultural workers’ wages to the Vietnam War.
It also happened back in 1929 when Australians went to the polls, focused almost solely on arbitration.
In its early days, Australia pioneered a system of compulsory arbitration — basically a new kind of court to settle disputes between unions and employers and set wages. From the late-1800s, arbitration courts were set up in most of the Australian states, and after Federation, a federal court was established in Canberra. At first, this federal layer was designed only to deal with the most serious, nationwide industrial disputes, but it soon became a full-fledged second layer of arbitration governing all facets of industrial relations.
Most unions and employers rather begrudgingly came to accept arbitration as a kind of compromise – an institution that could make industrial disputes a little more civil and, hopefully, a little less violent.
But not all accepted the compromise. In the 1920s, the Coalition government (it was the Nationalist-Country Party Coalition back then, but they are roughly comparable to today’s Liberals and Nationals), led by Prime Minister Stanley Melbourne Bruce, made several attempts to water down the arbitration system, or at least remove one of the layers.
While unions saw the dual-layered system as an important check preventing a pro-business state or federal government from watering down hard-won protections and wages, the government believed it allowed unions to “venue-shop” until they got the result they wanted.
The Coalition also believed that high wages were putting off foreign investors and risked Australia’s economic development. Something had to be done.
The Coalition’s unpopular assault on arbitration
Initially, Bruce tried to solve the problem by asking the states to give up their courts in favour of one centralised system in Canberra. The states, then mostly governed by Labor, refused to hand over their powers to the feds.
Next, Bruce sought to change the Constitution to beef up the Commonwealth’s power to regulate industrial relations. The referendum, brought in 1926, failed to gain a majority of votes or states, with only Queensland and New South Wales voting “yes”.
Frustrated, and alarmed by a growing economic crisis and a slew of bitter strikes, the Coalition government changed direction, attempting to abolish the federal layer of arbitration. In 1929, Bruce introduced the Maritime Industries Bill, a law taking the Commonwealth out of arbitration for most industries, leaving just the state courts.
The bill did not pass. Six MPs, led by former Prime Minister Billy Hughes, dramatically crossed the floor to add an amendment requiring a popular mandate for the law, either through a referendum or a general election. Bruce told the house he considered the bill a matter of confidence and called an early election.
(This “hair trigger” approach to confidence has since fallen out of vogue. Losing on any old bill – or indeed, even a very important one – is no longer treated as a proxy confidence vote. See, for instance, the case of the Medevac Bill passed against the wishes of the Coalition government last year. The government continued in office.)
What happened on election day and why it still resonates today
In the 1929 election, bothsides of politics insisted that arbitration was the question being answered by the electorate. Labor, under James Scullin, clearly tapped into the public mood with his argument that arbitration, though imperfect, was the best hope for progress in Australia. The Coalition lost 18 seats and with them, their majority. Scullin took Labor into government for the first time since 1917.
To add insult to injury, Bruce lost his own blue-ribbon seat of Flinders – the first time a sitting Australian prime minister lost his seat.
It would prove a rare event, not occurring again until 2007, when John Howard lost Bennelong. Funnily enough, that election, like 1929, was also largely focused on a conservative government’s fundamental reforms to the industrial relations system.
Only twice in the past century have Australians seen fit to throw a prime minister out of parliament, and both times, it was over proposed reforms to industrial relations. It’s a striking fact — one that might tempt us to question whether there is some deep continuity here. It could speak to the legacy of trade unions, which have made industrial relations a fraught area for governments, even well after the heyday of union power and organisation.
For my money, I’d say this speaks more to the basic attitude to government in Australia — what Laura Tingle, borrowing from linguist Afferbeck Lauder, dubbed “aorta politics” (as in, “they oughta fix x”; “they” being the authorities).
Very much unlike our more libertarian cousins in the US and UK, Australians have historically wanted the state to solve many of their problems. Whether or not it is a good idea, we’ve had the state irrigate farmland, deliver the mail, provide electricity, pay for our health insurance and help us buy our first home. Nowadays, Australians seem to expect it to tackle things like domestic violence and climate change.
And even today, as in 1929, we expect the state to keep the industrial peace – to prevent bosses or unions from going too far in their quest for economic power, to keep things civil.
The point here is not that arbitration or even industrial relations shall forever be a sacred cow in Australian politics. What we learn from 1929 is simply that the Australian voter does not take kindly to our governments trying to drop an issue because it is too hard. We are, it seems, a demanding lot.
Many commentators have compared Labor’s support for the Medevac legislation with the Tampa incident in late August 2001. The implication is that Labor lost the 2001 election due to Tampa, and could lose this year’s election due to Medevac.
Political commentator Katharine Murphy has said she was certain at the time Labor leader Kim Beazley “had just lost the election” after announcing Labor would vote against retrospective legislation giving the Coalition government the power to forcibly remove the Tampa from Australian territorial waters.
But are the claims that Labor lost the 2001 election due to the Tampa true? The Poll Bludger, William Bowe, kindly sent me the polling data for the 1998-2001 term, on which the historical BludgerTrack is based. BludgerTrack is a bias-adjusted poll aggregate.
I have used this data to create the graph below of the Coalition vs Labor two party preferred vote during 2001. The election was on November 10.
The graph shows that Labor had a massive lead in March 2001 of about 57-43, but it gradually narrowed to about 52-48 by the time Australian government involvement in the Tampa incident began on August 26. The Tampa was denied permission to dock at Christmas Island and deliver asylum seekers who had been rescued.
The Coalition received about a two-point boost from the Tampa affair to draw level with Labor. However, it had a much bigger lift from the September 11, 2001 terrorist attacks, which lifted the Coalition’s vote five points to about a 55-45 lead. As the shock of the attacks wore off, the Coalition’s vote fell back to a 51.0-49.0 victory on election day (November 10).
If the Tampa had occurred in 2001, but not September 11, other issues, such as the economy, health and education, would probably have appealed to people in the lead-up to the election more than boats. Labor could have recovered to an election-winning position. September 11 made national security a huge asset for the Coalition government at the 2001 election.
If not for September 11, Labor may have won the 2001 election. The Tampa put the Coalition into a tie with Labor, not a lead.
Analyst Peter Brent in Inside Story thinks that, given economic factors, the Coalition would probably have won the election by 51-49 without either the Tampa or September 11. You can achieve this result by drawing a line from the Coalition’s nadir in March to the election, with the assumption that the slow improvement in the polls had continued.
However, the graph shows the Coalition’s recovery had stalled for over a month before the Tampa. Even though the September 11 shock had faded by the election, the boost it gave to the importance of the Coalition strength of national security assisted the Coalition at the election.
Labor did not lose the 2001 election because of the Tampa, and they are unlikely to lose the 2019 election because of their support for the Medevac bill. I believe the shock factor of terrorist incidents has been reduced by their frequency. There were two terrorist atrocities shortly before the 2017 UK general election, yet UK Labour performed much better than expected at that election.
Eight UK Labour and three Conservatives MPs form new Independent Group
While other causes, such as alleged antisemitism within Labour, have been cited, the reason these defections have happened now is Brexit. The defecting MPs are strongly opposed to their former party’s handling of Brexit, and all want a second referendum on Brexit – currently opposed by both major parties.
The Independent Group MPs have consistently voted in favour of proposals to avoid a “no deal” Brexit when the UK leaves the European Union on March 29. However, these MPs votes will not change. To avoid a no deal, either other MPs votes must change, or the major parties need to reach a compromise. The next important Brexit votes will be on February 27. The article I wrote on my personal website in January about why a no deal Brexit is a plausible scenario is still relevant.
On the morning of Monday, March 4 1996, the young treasurer in the Howard government, Peter Costello, and his press secretary, Tony Smith – now the speaker of the House of Representatives – took an Ansett flight from Melbourne to Sydney for their first departmental briefing. The treasury secretary, Ted Evans, who had initially asked to see Costello privately, offered his resignation in light of the change of government. Costello assured Evans he wanted him to stay on.
Once the meeting began, Evans had some startling news for his new boss. The budget had an underlying deficit of about A$9 billion. “Costello appeared genuinely shocked”, his biographer, Shaun Carney, has reported. The size of the deficit probably did take him by surprise, even if the existence of a deficit of some kind did not. John Howard recalls that he had wind of it before his March 2 election victory.
A submission released today by the National Archives of Australia in its 1996-1997 cabinet records sets out the nature and scale of the problem that the new government saw as its most serious during its first term. But problem would become opportunity. In his autobiography, Lazarus Rising, Howard would call the 1996 budget “the most important of all budgets” delivered during his almost 12 years in government, as well as “the best and bravest in 25 years”.
Howard is hardly a disinterested party. Nonetheless, there is a persuasive strand of opinion among commentators that the fiscal decisions taken in 1996, while creating political pain for the government and economic pain for voters, were foundational for Howard and Costello.
The cabinet submission of March 18 1996 predicted economic growth of 3.75% for 1995-96 and 1996-97, on the back of improved performance from the farm sector as the drought ended. Weak demand was likely cyclical, a “temporary slowdown of the type which often occurs at this stage of the business cycle and that growth should strengthen in subsequent quarters”, as business investment again took off.
Howard’s quip from opposition in 1995 – that the recovering economy was “five minutes of economic sunlight” – was effective politics. But it was not supported by the new government’s own records, which referred to a “generally favourable outlook”.
Compared with the skyrocketing interest rates and then the recession the Hawke and Keating governments faced in the early 1990s (or the recession the Hawke government inherited in 1983), these were happy days.
However, unemployment remained high at well over 8% and was projected to stay there in the following year.
The government was also concerned about the drag on economic performance of continuing budget deficits and rising government debt. This was running down national savings, undermining investment and worsening Australia’s current account deficit – the difference between the value of imports and exports of goods, services and capital.
Costello committed the government to reducing the underlying deficit of 3.5% of gross domestic product to 0.5% over three years, thereby reducing public sector lending, relieving pressure on the current account deficit, and returning the budget to a structural surplus. The government rejected the idea of a single massive cut of A$8 billion in the 1996 budget as running the risk “of knocking the economy off course”. It therefore committed to cuts of A$4 billion in each of the budgets of 1996 and 1997, with an eye to less pain in the 1998 budget leading up to an election.
With defence spending quarantined from the cuts, the August 1996 budget was indeed a tough one. The usual suspects – health, welfare, the public service and tertiary education – bore much of the load. Nonetheless, the government’s own polling suggested most voters thought its measures “tough but fair”, dispensing necessary if bitter medicine.
Howard remarked at the December launch of the latest cabinet records release that the government applied to the budget a “fair go” test, although he would ultimately bear pain for his too-clever distinction between “core” and “non-core” election promises.
Tony Abbott was a young parliamentary secretary in 1996, on his way up but still some way from the real levers of power. By 2013, however, he had his own government and with his treasurer, Joe Hockey, faced the problem of framing his first budget.
The 1996 effort would have been a powerful precedent for a new Coalition government in 2013 and, at a superficial level, the Abbott government did many similar things. As Howard and Costello had done, it established a National Commission of Audit.
Costello had complained of the “Beazley black hole” – the deficit bequeathed by Labor’s finance minister, Kim Beazley. Conveniently for the government, he was also the new opposition leader. The phrase lived on as a way of reminding electors of the Labor Party’s weaknesses in economic management and the Coalition’s achievements and strengths.
In 2014, Abbott and Hockey spoke of a “budget emergency”. But whereas the public seems to have bought the “black hole” image – although described recently by economist Warwick McKibbin as more like a temporary “pothole” – voters appear to have regarded the Abbott government’s “budget emergency” as invented.
One reason for this failure ironically lies in legislative changes that Costello announced at the very time he drew public attention to the black hole. This was the Charter of Budget Honesty, which mandated more rigorous reporting on the national finances, including the alphabet soup of MYEFO (Mid-Year Economic and Fiscal Outlook) and PEEFO (Pre-Election Economic and Fiscal Outlook), as well as five-yearly intergenerational reports.
These initiatives, which a Costello cabinet submission of August 2 1996 said were intended to promote “responsible fiscal management”, made it well nigh impossible to spring the surprise of a large deficit on an unsuspecting public and successor.
Unlike Hawke and Keating in 1983, and Howard and Costello in 1996, Abbott and Hockey could not stoke panic to implement unpopular measures and back out of difficult election commitments. The Charter of Budget Honesty meant they could not claim to have been blind-sided by an unanticipated budget deficit.
Howard and Costello also faced a much more helpful set of parliamentary numbers than their Coalition successor. With a massive 94 seats in a House of 148, they had political capital to burn. While few imagined the government would last almost 12 years, equally few considered it could be defeated after one term.
But it is in the Senate that the differences between 1996 and 2014 become clearer. There, the Howard government held 37 seats in a chamber of 76. After the defection of disgruntled Labor senator Mal Colston in August 1996, the government could get its legislation passed without the support of the Australian Democrats if it had Colston and the other independent senator, Brian Harradine, on side.
By way of contrast, the Abbott government faced a Senate cross bench of considerable complexity and diversity. And, as Howard has remarked, dealing with the Australian Democrats was notably easier for a Coalition government than getting Greens support.
In 1996, Howard and Costello got the politics right. They still paid a political price, but it did not prove fatal. McKibbin argues that the introduction of a GST in 2000 was made easier by the reduction of government outlays and the elimination of the budget deficit in the government’s first term.
By dealing with spending in 1996, the government was able to turn its attention to revenue and taxation in a more favourable fiscal environment for politically difficult reform.
The image remains: as they contemplated their own horror budget, Joe Hockey and Mathias Cormann relaxed with cigars. Trivial in itself, this clumsiness epitomised the Abbott government’s muddled budget politics.
In 2014, after decades of strong economic performance, few believed that the drastic measures the Abbott government proposed in 2014 were either necessary or fair. Hockey declared the “age of entitlement” over, but voters suspected this did not extend to politicians or their friends.
The contentious measures in the 2014 budget – such as the Medicare co-payment and the winding back of unemployment benefits – did not pass Howard’s “fair go” test.
But the tough spending cuts Costello announced in 1996, while hardly provoking an outbreak of national joy, were an early taste of the professionalism and toughness that he and Howard brought to their long years at the helm.
The rise of Bob Hawke to the prime ministership now seems to have been so unstoppable, so inevitable, that it is hard to imagine Australian political history might have unfolded differently.
But what if, instead of entering the House of Representatives at the 1980 election, Hawke had retired from his leadership of the union movement into, say, a business career? What if he’d not had willpower to give up the booze? What if he’d lacked the inclination to tone down his image as a larrikin union leader?
In that event, we might perhaps recall Hawke as a gifted union leader – probably a bit of a “character” – but one who had lacked the personal discipline to fulfil his potential. Perhaps we would remember him as epitomising those olden days when mighty trade unions imagined they were a kind of fifth estate, and when their big bosses were giants whose power rivalled, and sometimes eclipsed, that of leading politicians and capitalists. Hawke might have justly been recalled as a symbol of the pride before the fall.
Instead, Hawke is recalled as one of our greatest prime ministers and certainly among the most influential. It is a strength of the ABC’s upcoming two-part documentary, Hawke: The Larrikin and the Leader, narrated by Richard Roxburgh, that it evokes the industrial world that gave Hawke both a long and rich apprenticeship in public life and a remarkable celebrity status. Some of the 1960s and 1970s footage is marvellous. You can almost smell the beer and Brylcreem.
But we are also reminded of the personal transformation that was needed before Hawke could be seriously considered for national political leadership. As the pollster Rod Cameron comments in the program, the public might have been willing to tolerate, while frowning on, a womanising prime minister, but they would not take a drunkard.
The larrikin side of the Hawke personality is now a popular favourite at events, where the octogenarian acquiesces to the urgings of an adoring public by sculling a beer – a reprise of his record-breaking student effort at Oxford. But the beer-swilling larrikin, who would still be there at closing time in the bar of Melbourne’s John Curtin Hotel, had to be placed in the shade in the 1980s.
The reformed larrikin, of course, is a familiar type in Australian culture, most famously embodied in Bill, the protagonist of C.J. Dennis’s The Songs of a Sentimental Bloke. Bill gives up stoushing to become a properly domesticated husband and father, “Livin’ an’ lovin”. Hawke did a lot of both. The program’s discussion of his philandering is more coy than its handling of his drinking, but the expression on Hawke government minister Susan Ryan’s face when discussing Hawke’s relationship with women paints a thousand words.
The treatment of Hawke in this series is rather generous. Hawke was himself interviewed and all the talking heads clearly admire him to a greater or lesser extent – mainly greater. There are occasional hints of a darker side. Graham Richardson says he did some pretty appalling things under the influence of drink, but will not tell us what; only that Hawke would not have made it to the prime ministership in the age of the internet and the mobile phone.
Hawke’s 1971 Victorian Father of the Year award is treated ironically. The news footage has Hawke looking decidedly sheepish; the long-suffering Hazel privately wondered whether the judges had been on opium. Neal Blewett, a minister in Hawke’s government but a Bill Hayden supporter, thought Hawke and the party’s brutal treatment of Hayden on the eve of the 1983 election did long-term damage to the Labor Party’s morality.
The documentary does bring together many of the threads that help explain Hawke’s success as a politician. There was the sense of destiny, instilled in this Congregational minister’s son from childhood. His mother claimed that her Bible was forever marvellously opening at Isaiah 9:6: “For unto us a child is born, unto us a son is given: and the government shall be upon his shoulder”.
We are reminded of Hawke’s love affair with the Australian people, the “almost mystical bond” with voters. During that golden period of about 18 months after the 1983 election – as the drought broke, the recession ended and Australia II triumphed in the America’s Cup – Hawke was lucky, but he also knew how to exploit the brightening national mood to the full. Hawke did not just ride the wave of national pride and optimism during what Jim Davidson has aptly called the “Age of the Winged Keel”. He embodied it.
For a time at least. The 1984 election, in which Labor lost ground, took off much of the shine. Then there was the “banana republic” crisis of 1986, but the documentary does not pause long over economic policy. It does recognise that Hawke was immensely lucky in the depth and breadth of talent in his ministries, but that he was also skilled in bringing out the best in those he worked with. His ego was colossal, but he had the wisdom to share power.
There would be more election victories – in 1987 and 1990 – but things were never the same once his relationship with his younger treasurer and natural successor, Paul Keating, degenerated into acrimony. Yet, to the very end, as his approval rating plunged during “the recession we had to have”, Hawke clung to the idea that his relationship with voters was special. Like so many others, he failed to grasp the opportunity to leave office on his own terms.
Hawke: The Larrikin and the Leader moves along rather breezily. The episodes in Hawke’s career that reveal his attachment to high moral principle, such as his hostility to racism, or those achievements that rhyme with the present preoccupations of progressive politics – environmental protection and Medicare – receive loving attention. Hawke’s failures are not ignored, but get more superficial treatment. An exception is the abandonment of national Aboriginal land rights legislation and the proposal for a treaty, which figures in a melancholy few minutes towards the end of the second episode. But Hawke always has good intentions.
This is a nostalgic program that begins by noting that Australians today “have never been so distrusting of politicians. But there was a time when things were different”. So, how did we get from there to here? On this question, Hawke: The Larrikin and the Leader is silent.
But it may be that for all of Hawke’s achievements, the era’s narrowing of political possibilities – the equation of economic efficiency with good government, and of national productivity and competitiveness with national achievement – planted the seeds of both later economic success and political decay.
This piece is republished with permission from Commonwealth Now, the 59th edition of Griffith Review. Articles are a little longer than most published on The Conversation, presenting an in-depth analysis on the relevance of the Commonwealth of Nations in today’s geopolitical landscape.
We will make better decisions on all the great issues of the day and for the century to come, if we better understand the past. – Gough Whitlam
The celebration of the “Queen’s birthday” in Australia is a perfect reflection of a fading, remnant, relationship. Commemorated in the Australian states as a public holiday on three different days – none of which is her birthday – and honouring an event of dubious significance, the “Queen’s birthday” reminds us that, despite our national independence, the symbolic ties of colonial deference remain.
The “Queen’s birthday” may seem a fitting if absurd genuflection to a powerless relic of a former time, and in itself confirmation that the Queen no longer has a role in post-dominion matters. But things are not always as they seem.
Neither sovereignty nor national independence flowed neatly from federation. The Commonwealth of Australia Constitution Act created Australia as a federation of the former colonies and a constitutional monarchy, with all the tension inherent in that term – between a democratic government chosen by the people and a monarchical head of state whose ultimate constitutional power stemmed solely from inherited aristocratic assumption and unchallenged legal privilege.
The gradual devolution of Australian autonomy appeared assured at the Imperial Conference of 1926. This affirmed the relationship between Great Britain and its dominions as being that of:
… autonomous communities within the British Empire, equal in status, in no way subordinate one to another in any aspect of their domestic or external affairs, though united by a common allegiance to the Crown.
The critical qualifier in this proclamation of an imperial gift of national autonomy, equality and independence is this: “though united by a common allegiance to the Crown”.
The imperial assertion of continued dominion allegiance to the Crown was a stark counterpoint to the proclaimed national autonomy. Indeed, it undermined the very autonomy and equality of nations the conference so proudly affirmed.
Five years after the Imperial Conference, the Statute of Westminster gave statutory expression to the principles of equality established at the Imperial Conference and vested full legislative authority and independence in the “dominions”.
Nevertheless, it remained the case that some bills would continue to require the Queen’s assent to be passed into law. The Statute of Westminster also granted dominion ministers the right of direct access to the sovereign. This access had previously been available only indirectly through UK ministers and reflected their then incomplete post-colonial status.
A fight for independence
Yet, in reality, neither of these critical junctures in the evolving British–Australian relationship created the clear-cut path to national independence that these paternalistic statements of ceded imperial power might suggest.
Although the dominions were entitled to separate representation at the League of Nations and subsequently the United Nations, as made clear at the Imperial Conference, the cultural expectation of continued British primacy and Australian dominion subservience remained.
It can be seen in the British attitude toward the efforts of Australia’s minister for external affairs, H.V. Evatt, to champion the role of the smaller nations against the Great Powers at the San Francisco conference in 1945 that established the ground rules for the UN.
Evatt’s insistence that Australia would take its own independent position as an autonomous nation in these high-level international negotiations infuriated the British representatives at the fledgling discussions over the UN.
At a preliminary meeting of Commonwealth nations in London, British Prime Minister Winston Churchill had bemoaned Evatt’s defiant independent stance.
Describing the Commonwealth as “the third of the Great Powers”, Churchill argued that the Commonwealth could only maintain its influence by ensuring unity among members and speaking with one voice – and that one voice of course would be Britain’s, not Australia’s.
These expectations of British administrative, legal and political authority, based more in the established imperial mindset, behaviours and networks than an exercise of formal political control, remained powerful resistors to change throughout the 20th century.
The undercurrent of lasting imperial privilege and hierarchy proved to be a major obstacle in ending the complex web of residual colonial ties across legal, constitutional and political domains.
In particular, continued allegiance to the British Crown as the imperial condition of dominion nationhood was a political oxymoron. It cast an impossible constraint on the form of national autonomy, while Australian allegiance to the British Crown was superimposed on the representative model of parliamentary democracy.
The fundamental contradiction this established at the heart of the Australian polity remained largely dormant during the long years under the avowed Anglophile prime minister Sir Robert Menzies, until inevitably rupturing along the faultlines of divided allegiance – to the British Crown on the one hand and to Australian democratic governance on the other – with the 1972 election of the Whitlam Labor government.
Whitlam tries to loosen the ties
Gough Whitlam came to office with a core policy agenda of ending the residual colonial ties between Australia and Britain.
Although largely seen as ceremonial and symbolic, these colonial links were to be immensely significant in the trajectory of the Whitlam government and its dismissal threeyears later.
Whitlam moved rapidly on some of these. He ended the British honours system and introduced Australian honours, introduced an Australian national anthem to replace God Save the Queen, changed the Queen’s title by removing arcane references to God and Empire, and, in 1974, removed the words “God save the Queen” from the official proclamation dissolving parliament.
Eighteen months after his second election victory in the double dissolution of May 1974, Whitlam was peremptorily removed from office by the Queen’s representative in Australia, Governor-General Sir John Kerr, without warning and despite Whitlam maintaining a clear majority in the House of Representatives at all times.
Concerns were immediately raised over the possible role of Buckingham Palace and British authorities in this unprecedented vice-regal action. The suspicion that the Queen knew more about Kerr’s intentions than has ever been publicly acknowledged has grown in recent years with the Queen’s embargo of her correspondence with Kerr at the time of Whitlam’s dismissal.
Of all the residual colonial ties, the one that Whitlam found particularly abhorrent, and was determined to sever, was the right of appeal from some state supreme courts to the Privy Council. In his view:
No people with an ounce of self-respect would allow decisions made by their own judges … to be overruled by judges sitting in another country.
Whitlam described this as an “absurd” and “ludicrous” situation. Yet his efforts to end remaining state Privy Council appeals were stymied at every point.
Whitlam’s attorney-general, Lionel Murphy, reported he had struck nothing but intransigence, non-co-operation and obstruction from the British authorities in the government’s moves to implement this core policy.
Returning from his first visit to England as prime minister in 1973, Whitlam was clearly frustrated by the UK’s reluctance to end colonial ties when he told reporters, more in hope than confidence:
We are a separate country from Britain. We are an entirely independent country.
A tense meeting with Edward Heath, the British Conservative prime minister, the following year saw little change. An exasperated Whitlam again declared that:
All these colonial relics are incompatible with the position of Australia as a separate, sovereign country.
When the Whitlam government was removed from office by Kerr, three years later, these state-based appeals to the Privy Council remained, unchanged.
What we know about the Palace’s role
The archival records of the British Foreign and Commonwealth Office (FCO) covering these official visits are at once illuminating and disturbing. They show a troubling lack of respect for such a significant engagement with a senior member of a new Australian government.
Murphy’s visit was, after all, the first official visit by any of Whitlam’s cabinet to England. And yet, even before his arrival, the FCO files show that British authorities viewed Murphy, and indeed the Whitlam government itself, as a troublesome interloper whose presence they barely tolerated and whose policy concerns they did not share.
More than mere intransigence, or even simply a refusal to accept the legitimacy of the Whitlam government, these archival records disclose profound breaches of confidence, secrecy and even deception of Whitlam by the FCO, the British High Commission in Canberra, and the Queen’s private secretary Sir Martin Charteris. They show a partisan pattern of disrespect for and undermining of the new Labor government.
Most significantly, far from any equality of national status, “in no way subordinate one to another” professed at the Imperial Conference, these files reveal the FCO’s brazen presumption – “our right as the colonial power” – to deceive the prime minister, to liaise in secret with the conservative states and, ultimately, to intervene in Australian politics to prevent the government holding a half-Senate election to resolve a stalemate in the Senate over the passage of supply bills.
From October 16, 1975, opposition senators refused to vote on the government’s supply bills, which provided the annual funds for government expenditure. In the new political vernacular, supply was “blocked”.
Calling the half-Senate election, which was then due, had been Whitlam’s resolution to this unprecedented situation since the day supply was first blocked. The Labor caucus had voted unanimously in support of Whitlam calling the half-Senate election “at a time of his choosing”.
The FCO files document a rapid breakdown and reversion to imperial imbalance in the British-Australian administrative relationship that began with the election of the Whitlam government and ended with its dismissal. They reveal a deep suspicion of the new government that quickly led to secrecy, deception and to routine breaches of the highest levels of confidentiality by both the British prime minister’s office and the Palace throughout the terms of the Whitlam government.
Most alarming is that the FCO files also reveal overt British involvement in Australian politics in the weeks before the dismissal – specifically with the half-Senate election due at that time and which Whitlam was to call on November 11, 1975, to end the blocking of supply in the Senate.
Kerr’s papers in the National Archives of Australia provided the first glimpse of the Palace’s role in the dismissal.
Although there are some who continue to claim that the Palace was not involved, this has increasingly become more a matter of faith than fact. Revelations from Kerr’s papers, the Palace letters, and the FCO’s files have rendered that position untenable.
We now know that Charteris wrote to Kerr in October 1975 to discuss action the Palace would take if Whitlam became aware of Kerr’s plans to remove him from office and sought to recall him as governor-general. Charteris told Kerr that the Palace would, in that instance, “try to delay things”.
This communication between the Queen’s private secretary and the governor-general over the position of the governor-general himself is politically and constitutionally shocking. It reveals the Palace to be in deep intrigue with Kerr, to protect his tenure as governor-general, in the weeks before the dismissal – unknown to Whitlam.
It was also a breathtaking rupture of the vice-regal relationship. At the heart of this relationship in a constitutional monarchy is that the appointment of the governor-general is made by the Queen on the advice of the Australian prime minister alone. This has certainly been the case since 1930, when King George V accepted Labor prime minister James Scullin’s advice to appoint Sir Isaac Isaacs as governor-general.
Despite being vehemently opposed to Isaacs’ appointment, the King told Scullin:
… being a constitutional monarch I must, Mr Scullin, accept your advice.
For the Queen’s private secretary to intervene with Kerr himself on the question of the governor-general’s tenure was a staggering breach of that relationship.
From this point on, knowing that Kerr was considering dismissing Whitlam and concerned that Whitlam might then recall him, and having agreed to a course of action in order to protect Kerr’s position should Whitlam do so, the Palace was already involved in the dismissal.
The fight over the Palace letters
The letters between Charteris and Kerr are part of the so-called “Palace letters”. This is the secret correspondence between the governor-general and the Queen, her private secretary, and Prince Charles, in the weeks before the dismissal.
Although these letters are among Kerr’s papers and held by the National Archives in Canberra, they are closed to us. This is because the Palace letters are considered “personal” and not official “Commonwealth” records. This is despite Kerr’s own description of them as his “duty” as governor-general, and despite their obvious significance to our history.
The Palace letters are embargoed until 2027, “at her Majesty the Queen’s instructions”, with the Queen’s private secretary retaining an indefinite veto over their release even after this date. It is quite possible, then, that they will never be released.
The Palace letters are extraordinarily significant historical documents. They are contemporaneous real-time communications between the Queen and her representative in Australia, written at a time of great political drama, and are a vital part of our national historical record.
At the heart of this still-secret vice-regal correspondence was the prospect of the dismissal of the Whitlam government, which Kerr had already raised in September 1975 with Prince Charles and Charteris.
The designation of the Queen’s correspondence with her representative in Australia as “personal” means they do not come under Australia’s Archives Act, which relates only to official “Commonwealth records”.
And so, in a rather neat catch-22, the decision by the National Archives to deny access to the correspondence cannot be appealed to the Administrative Appeals Tribunal.
There is only one way to challenge this decision: through a Federal Court action, which is a complex, expensive and onerous proposition. This is clearly an area in need of legislative reform to ensure a viable appeal process is in place for records described as “personal” in this way.
In an effort to secure the release of the Palace letters, I launched an action against the National Archives in the Federal Court last year, with a legal team working on a pro-bono basis and supported by a crowdfunding campaign. This concluded in September 2017; the decision is anticipated within months.
At the heart of the case is this central question of just what constitutes “personal” as opposed to “Commonwealth” records. Lead barrister Antony Whitlam (Gough Whitlam’s eldest son) argued to the court that “personal records” would be records covering matters “unrelated to the performance of Sir John’s official duties”, and that this could not extend to correspondence between the Queen and her representative in Australia prior to the dismissal. He said:
It cannot seriously be suggested that there was a personal relationship between the Queen and Sir John Kerr.
It is difficult to see, from common sense alone, that the correspondence between the Queen and her representative in Australia could in any way be seen as “personal”. The precise legal points on which the question of Palace letters’ status will turn – whether as personal or Commonwealth records – will be a different matter.
The case itself has brought to light a significant amount of new historical and contemporary material on the relationship between the Queen and the governor-general and its implications for Australian national sovereignty.
One thing that can be said is that from the moment this case came before the court, the question of the release of the Palace letters changed irrevocably. Their status and their release will now be determined by an Australian court, according to Australian law – and not as a quasi-imperial grant of release by the Queen.
This alone is an historic and important outcome that ends one of the few remaining “colonial relics” that continue to deny us access to historical documents relating to the Queen about a historical episode also relating to the Queen.
The continued embargo by the Queen of the Palace letters and the revelations from the British archives of the FCO all point to the lingering imperial power that comes from an incomplete severance of colonial ties. They show above all that the residues of colonialism, the “imperial aftermath” in Whitlam’s words, can never be fully extinguished until Australia becomes a fully independent republic.
It is surely absurd that in the 21st century we can still see the Australian prime minister giving an Australian knighthood to the Queen’s consort, Prince Philip, and that the governor-general, the Queen’s representative in Australia, can still dismiss an elected government on the basis of claimed “reserve powers” derived from, and in the name of, the Queen.
As an independent autonomous nation, Australia has a right to know its own history, including and in particular the records pointing to British involvement in that history, if we are to ensure such a profound rupture in our political structures and denial of our national sovereignty cannot happen again.
This troubling time in our history and in the Australian–British relationship is also critical to our decisions as we recommence the debate over the inevitable move toward a republic.
The fundamental issues to be confronted in that debate will relate absolutely to the events surrounding the dismissal of the Whitlam government: how to protect the institutions of democratic parliamentary governance, how to secure the formation of government in the House of Representatives, and what the powers of the new, Australian, head of state should be.
You can read other essays from Griffith Review’s latest edition here.
The White Paper called Working Nation became the Labor government’s major economic statement in Paul Keating’s second term. However, the policy was principally an after-the-fact attempt to clean up a mess in the labour market and be seen to be doing something even if a little belatedly.
Cabinet papers released today by the National Archives of Australia show the white paper began as a rational exercise but was soon overtaken by pressing contingencies and the desire to make the policy everything to everyone. While concerned ministers were anxious to reposition the government in the midst of an ongoing recession, the process of preparing the new White Paper became an exercise in opportunism and bureaucratic capture.
On 15th December 1993 the Keating government released a significant draft policy entitled Restoring Full Employment – a nostalgic resonance to the original war-time Full Employment paper of 1945. Australia’s unemployment rate at the time was a staggering 10% and while younger school leavers found it hard to find work or were actively discouraged, many older workers (especially males) were being thrown out of jobs, many never to work again.
Paradoxically, unemployment had not featured significantly in the 1993 election (which was fought on the GST), but Labor was now worried that if nothing was done about the deterioration in the labour market (and specifically job creation) then the government would not hold onto office in 1996.
In early February 1994, the Keating cabinet began work on a follow up government policy statement provisionally entitled: a White Paper on Employment and Industry.
The resulting Working Nation paper was one of five “Nation” statements favoured by the two Keatings (Paul the PM and Mike his head of department, not related). The cabinet papers show it began life with the worthy goal of “achieving sustainable high economic growth,” but soon became a “jobs and training compact” to reduce long-term unemployment.
What Working Nation was designed to do
Working Nation was meant to provide an employment strategy, stimulate regional development, introduce a new industry policy, and assist Australia “going global” in expanded trade opportunities. Ministers hoped the policy would lead the economic transformation of Australia.
It began life under ministers Kim Beazley (then head of the Department for Employment, Education and Training) and Peter Baldwin (Department of Social Security). The focus was on the job seekers who would be helped by individual case management, but with the insistence on “reciprocal obligation” – that those on income support had a responsibility to stay in education, be in training or doing other productive work.
But this obligation could easily be evaded through the misuse of medical certificates. Only women over 40 whose partners were unemployed were spared these expectations.
In its implementation by the federal bureaucracy, and the beleaguered Commonwealth Employment Service in particular, the policy descended into a treadmill of labour market programs. There was a saturation of jobs advertisements in the media – that even according to senior administrators led to considerable “churning” of people through 12-18 month job compacts back onto the unemployment queues.
Cost blow outs
Cabinet deliberations at the time show two prominent political aspects of the policy. First, when money was up for grabs the policy intent expanded exponentially and ministers from tangential portfolios rushed to put their hands up for a share of the proceeds.
Second, fiscal circumstances were tight at the time, but costings for the multi-faceted White Paper went from estimates of A$200 to A$300 million for income support, to A$1 billion to A$1.4 billion a few days later. Then it became a maximum of A$1.7 billion.
When the program was announced in May 1994 it came in at an annual cost of A$2 billion, with claims of a total cost of A$6.5 billion before it was wound up in 1996.
The formulation process showed how a determined bunch of policy entrepreneurs, senior bureaucrats led by the head of Department of Prime Minister and Cabinet and academic economists, were able to drive a policy response based on detailed research and theoretical propositions. Social Security bureaucrats were also able to exploit the opportunity to implement their own preferred policy adjustments, almost unrelated to the main thrust of the policy statements. At the same time these bureaucratic players largely marginalised ministers in the process. Indeed, the 1994 Employment Minister Simon Crean had to be briefed by officials on the content of the policy when Working Nation was released.
Moreover, these insider policy entrepreneurs carefully sidelined the government’s main economic adviser, the Treasury department, during the whole process. This perhaps reflects the deep suspicion of some of these actors to the ideological bent of the then Treasury officials.
While a jobs training package sounded a simple response to a pressing problem, the Working Nation policy created more headaches for a government with umbilical links to the trade union movement. There was contention over a “training wage,” whether it should be greater than the Newstart allowance and how it related to the minimum wage. There was also debate on whether workers could jobshare (which was not endorsed by cabinet) and how increased income support impacted on housing and rental relief measures.
Working Nation was a classic case of just how complex and interrelated such well-intentioned policy statements can become when they cut across other areas of established policy.
Even before it was wound up, there were concerns, noted by cabinet, that the program was not achieving its objectives and that those on the Job Compacts program remained without work when their program entitlements expired.
Even after economic growth in Australia improved, the unemployment rate remained stubbornly stuck at 8.5% before the 1996 election, – an election at which Labor suffered a heavy defeat. Working Nation led to the Commonwealth Employment Service being disestablished and replaced by the now familiar network of private or community job-seeker agencies delivering services under competitive contracts.
While Working Nation was a major economic and social policy statement of the government, it was an inadequate response (too late and too slow) to the imperatives of the 1991-92 recession. And in the process of producing the White Paper, strategically placed insiders grabbed the opportunity to flex their own policy muscles inserting their preferred options into the statement.
Once released, Working Nation had a short-lead in time for implementation (eight weeks) placing huge burdens on a centralised bureaucracy, not generally equipped to respond so receptively to such demands. Working Nation highlighted not only the policy-making inadequacies of the federal government but also the tardy delivery capacity of large unwieldy bureaucratic organisations.
A highly publicised international deal on climate change is two years old. Australia’s federal government, under pressure from environmentalists and with a new prime minister at the helm, signs up and quickly ratifies it. However, its emissions reductions actions don’t work, and the government faces a dilemma: strengthen the measures (including perhaps carbon pricing), or keep cooking up voluntary measures, spiced with a dash of creative accounting.
While the paragraph above might just as well describe the present day, it also sums up the situation in 1994, when Paul Keating’s government was wrestling with Australia’s climate policy. The period is better remembered for angry timber industry workers blockading Parliament, but there were also important battles over carbon pricing and Australia’s international negotiating position.
Cabinet papers from 1994 and 1995, released today by the National Archives of Australia, show how Keating’s cabinet fought an internal civil war over how to respond to climate change, while working hard to protect Australia’s fossil fuel exports.
Australia used this credibility to propound a “fossil fuel clause,” which made the now-familiar argument that:
…economies that are highly dependent on income generated from the production, processing and export, and/or consumption of fossil fuels and associated energy-intensive products and/or the use of fossil fuels … have serious difficulties in switching to alternatives.
The cabinet papers released today reveal that defending this clause was a major preoccupation of the government of the day.
In early 1994 Ros Kelly’s political career was brought low by the “sports rorts” affair. She was briefly replaced by Graham Richardson, and then the highly respected John Faulkner.
By this time, all climate eyes were on the first UNFCCC summit, to be held in Berlin in March-April 1995. As an August 1994 cabinet memo noted:
…international pressure is mounting to strengthen the Convention’s emission reduction commitments,
…Australia’s measures will fall short of reaching greenhouse gas emission targets and that Australia’s greenhouse performance is likely to compare unfavourably with that of most other OECD countries.
This was a reference to the 1992 National Greenhouse Response Strategy, which was already being shown to be toothless, with state governments approving new coal-fired
power stations and renewable energy ignored. Environmentalists wanted more mandatory action; business wanted to keep everything voluntary. After a roundtable hosted by Keating in June, cabinet debated climate change in August.
The political calculations involved are evident in the official record, which states:
[Australia’s] ability to influence international negotiations away from unqualified, binding uniform emissions commitments towards approaches that better reflect Australia’s interests will be inhibited by a relatively poor domestic greenhouse response.
And what are Australia’s national interests? It won’t surprise you to learn that the government worried that:
…action by the international community could have a major impact on Australia’s energy sector and on the economy in general, by changing the nature and pattern of domestic energy use and/or by changing the world market for energy for Australian exporters.
Cabinet pondered finding international allies – such as Sweden, the Netherlands, Denmark, Switzerland and New Zealand – for the get-out-of-jail idea of “burden sharing”, which would allow countries to finesse their climate commitments by funding emissions reductions elsewhere.
Cabinet also canvassed the possibility of adopting either a proactive or reactive stance, or even withdrawing from the UN climate negotiations altogether. That last option – one that in essence would be adopted by John Howard, at least after George Bush opened up that space in 2001 by withdrawing from Kyoto – was seen as too risky. While the UNFCCC didn’t contain provisions for banning imports from recalcitrant countries, nevertheless:
As a major exporter of energy and energy intensive products, Australia would need to be involved in the negotiations to guard against the possibility of this occurring.
Faulkner had already flagged that he would bring a proposal to December 1994’s cabinet meeting, possibly including a small carbon tax – something the Greens, Democrats and Australian Conservation Foundation were all pushing for.
His opponents were ready, with a two-pronged approach. First, they produced economic modelling (with, it later emerged, significant help from fossil fuel companies), which warned that “to stabilise emissions at 1988 levels by 2000, taxes per tonne of CO₂ would need to be around US$192 for Australia and US$24 for the OECD.
So far, so frightening. But given that decisions reached at the Berlin summit might have consequences for Australia’s prized coal exports, some sort of
response was necessary. Fortunately, the Department of Primary Industry and Energy had prepared a document, called Response to Greenhouse Challenge “in consultation with key industry organisations” such as the Business Council of Australia. This had provided a “basis for discussions with industry and incorporates the key principles that industry wants included in the scheme”.
The carbon tax decision was deferred, and ultimately after a series of meetings in February 1995, Faulkner was forced to concede defeat. A purely voluntary scheme – the “Greenhouse Challenge” – was agreed, with industry signing on to what was essentially a reboot of the demonstrably ineffective National Greenhouse Response Strategy.
The Berlin meeting did lead to a call for binding emissions cuts for developed countries, and
Australia signed on, albeit grudgingly. By the end of the year, the same industry-funded modelling was used to produce a glossy report which argued that Australia deserved special consideration because of the makeup of its economy. Australian diplomats would use this argument as a basis of their lobbying all the way through to the 1997 Kyoto climate summit.
In one of history’s ironies, on the same day that this report was released – December 1, 1995 – Keating’s cabinet discussed “the development of a more comprehensive effort in greenhouse science”, noting that:
Climate change is capable of impacting severely on coastal infrastructure, living marine resources and coastal ecosystems such as reefs. The Australian
regional oceans strongly influence global climate, and Australia is vulnerable to oceanic changes affecting rainfall and possibly the incidence of tropical cyclones.
A look at 2017’s weather tells you they may have been onto something there.
As I pointed out in last year’s cabinet records article, “when it comes to climate policy, there are no real secrets worthy of the name. We have always known that the Australian state quickly retreated from its already hedged promise to take action, and told us all along that this was because we had a lot of coal”.
Reading these documents is a bit like yelling at a person in a horror movie not to open the door behind which the killer lurks. You know it is futile, but you just can’t help yourself. The December 1994 cabinet minutes contain sentences like this:
Greenhouse is expected to generate future commercial opportunities for Australia with increased export of renewable energy technology e.g. photovoltaic, wind and mini-hydro technology, especially in the Asia-Pacific Region [to] support renewables.
At yet, several governments later, we’re stuck having the same debates while standing by and letting other countries embrace those exact opportunities.