Tuesday, September 15, 2009

Mungo MacCallum On The Legacy Wars

From Crikey :

It’s all Kevin Rudd’s fault. Here we are, nearly two years out of the Howard years and happily consigning them to well-deserved oblivion.

And then Rudd has to mention the war; and of course John Howard and Peter Costello lurch out of the political cemetery to boast about the size and quality of their tombstones and pretend they are not really dead after all, and Malcolm Turnbull feels that he has to join in and defend the two people in the world he most wants to forget. Such is the level of discussion in contemporary Australia.

The trigger, of course, was Paul Kelly’s latest blockbuster, a weighty, indeed ponderous, attempt to spin the 24 years of government by Bob Hawke, Paul Keating and John Howard with (in alphabetical order) Peter Costello into one seamless thread of economic reform.

Launching the book, Rudd predictably dismissed the Howard-Costello period as a mere hiatus; he and only he was the true bearer of the flame kindled in 1983. This admittedly partisan view was derided as mean-spirited and mendacious, but it did invite a critical appraisal of Howard’s legacy and what, if anything it has left us. And on close examination it is not a legacy which can be dismissed lightly. It can, however, be dismissed heavily, so here goes.

The proudest boast of Howard and Costello was that they handed over a robust and vibrant economy, free of debt and sizzling with growth. It was indeed free of government debt; on the other hand private debt, vigorously encouraged by government policy, was through the roof and still climbing. And certainly Australia’s economy was growing and had been for many years.

The problem was that the growth had been squandered on election bribes to middle class voters. Vast quantities of tax had been collected only to be handed back, although the hand outs disproportionately favoured the top end of town. Very little was invested in infrastructure and still less set aside for the inevitable downturn – thus Rudd’s need to borrow large amounts, which is now the target of coalition outrage.

Indeed, so extreme had been Howard’s profligacy that if all his 2007 election promises had been honoured, the budget would have gone into structural deficit even if the boom had continued. Not much of a bequest after all.


Rudd’s principal charge against them is that they did almost nothing to boost productivity against the inevitable time when the mining boom came to an end. Education, research and innovation were all allowed to run down, almost to the point of stagnation. This is where the bonanza should have gone and this will be the priority in the years ahead.

In other words, economic reform will certainly continue, but not as an end in itself: it will henceforth be a means towards social reform. And it is by this criterion that Rudd’s own legacy will be judged.

Read The Full Story Here