I recently came across an article from 2009 called The Howard Impact which compares Australia’s performance against seventeen other advanced democracies including the United States, Canada, Japan and the countries of Western Europe. Whilst I have no desire to live in the past, the facts from the Howard era are chillingly relevant as this government is driven by an even fiercer version of the same ideology that created many of today’s problems.
On several central measures of macroeconomic performance (economic growth, unemployment, productivity) Howard’s government scored comparatively well. On some of the achievements trumpeted most loudly at home, such as inflation and interest rates, its performance was actually worse than the average of the selected countries.
Household debt in relation to disposable income almost doubled during the Howard years due to a sharp increase in housing prices. Home loan interest payments were higher than when housing interest rates peaked at 17 per cent in 1989. Despite the relatively good economic growth this created financial stress for many people.
Cutting capital gains tax and giving tax concessions for negative gearing exacerbated a problem already being fuelled by unmet demand, low interest rates and easy availability of money from lending institutions. The influx of investors into the property market, competing with property owners looking to upgrade, drove prices up and the rate of home ownership among those under thirty-five dropped.
Under the Howard government there was an increased emphasis on private delivery of what had previously been public services, often with the introduction of a public subsidy delivered by tax rebates, for example. This was very much the case in health, in child care and aged care. But the most glaring example was in education.
From 1995 to 2005, the private share of education spending rose to be the third highest among the selected countries and the public share fell to 12 points below their average.
The public subsidy of private providers led to a growth in private schools to the degree that one-fifth of Australian public spending on education went to private institutions, almost double the overall average of 10.5 per cent, a particularly high figure when it is remembered that private universities had a negligible presence in Australia.
Spending on tertiary institutions was even worse. During that decade the public share had dropped to less than half, 48 per cent, and Australia was then 26 points below the average.
“This reflected an increased emphasis on private funding, but also – uniquely among these developed democracies – a reduction in real terms in public spending on tertiary education. In 2005, Australia spent 0.8 per cent of GDP compared with an average of 1.1 per cent. In other words Australian expenditure would have had to increase by around 35 per cent to bring it up to average. In the other countries for which we have data, public spending on tertiary education was up by 30 per cent in real terms over the decade 1995–2005. Only Australia’s decreased.”
The article concludes by asking how Howard will be viewed in ten or twenty years’ time.
“As with all governments, the Howard government’s economic management and foreign policy decisions will be central to any assessment. In addition, the aging society, health care, the challenges of the information economy and society, and the environment will be central concerns. In each of these areas, the government is likely to be marked more harshly in the future than it was when in office.”
Well here we are, almost 20 years on from 1995. Arguably the greatest problems facing us are climate change and environmental protection, income inequity, housing affordability, falling education standards, and increasing financial stress for families. These problems were exacerbated by Howard’s policy decisions and will be sent into crisis by the Abbott/Hockey idea of government.
To deal with health care and the aging society, Abbott has chosen a user pays model – the antithesis of everything we have gained over the years to provide these services to all. He wants to cut payments to welfare recipients – make the poor poorer. Make pensions harder to get but tax concessions will be huge for those of you with millions.
The challenges of the information economy and society will be met with aging copper wire.
The environment – isn’t that the place where mines live?
When in doubt, privatise. Who needs profitable assets?
But hey, we may have a surplus in ten years. A surplus is just a number on a piece of paper but it’s WORTH selling everything we own, destroying the environment, cutting funding to health and education, making sick people pay, cutting benefits to pensioners, saddling students with crippling debt, cutting off all income for 6 months of the year to desperate people and all that other heavy lifting our sick, old, young, and unemployed are being asked to do for the good of the country (otherwise known as the grubs).
Society is not a dirty word. It is also not a synonym for economy. The economy is the means by which we achieve the society we desire. It is utterly insane to sacrifice our society for the end goal of nothing more than an accounting term.
The miser’s apprentice has put on the hat but has no control over the power he now has. The puppet masters are in the ascendency … for now.
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