Howard’s chickens come home to roost
The government's move on 457 visas is proof that John Howard’s short-termism is here to stay
One of the peculiarities of Australian politics is that the most short-lived governments have often shaped our future for generations. Andrew Fisher’s six-month federal Labor government beginning in November 1908 galvanised its rivals to form a so-called fusion between small “l” liberal and conservative groupings, which eventually became the Liberal Party. Australia’s two-party dominant system of Labor vs non-Labor was born. Despite a series of realignments on the latter side, and the current rise of minor parties, this divide essentially endures to this day. Ben Chifley’s postwar Labor government (1945-49) defined Australia in a similar way. Its manufacturing-driven nation-building ways, in addition to a program of mass immigration and creation of an extensive welfare state, were carried on by his successor as prime minister, Liberal doyen Robert Menzies. Likewise, Gough Whitlam’s tumultuous three-year Labor government (1972–75) changed the face of Australia forever.
By contrast, the electoral success of long-lived governments can obscure their real impact on our nation’s economy, society and culture. By the end of Menzies’ 16-year reign, coinciding as it did with a long economic boom, Australia was struggling to adapt to the rapidly changing world of the 1960s. It clung to the racially discriminatory White Australia policy, amid wider cultural and social torpor.
It is nearly a decade – yes, a decade – since John Howard lost office. Howard’s 11-and-a-half-year-old Coalition government is renowned for its supposedly canny economic management and large budget surpluses before its overreach in implementing the deeply unpopular WorkChoices. (For others, this era is hallmarked by unruly debates over Indigenous affairs, immigration and culture wars.)
As time goes on, however, the mythology surrounding Howard’s electoral prowess is giving way to a more realistic story in which his government did not discover some magical political elixir. Rather, it primarily benefited from fortunate economic conditions (largely flowing from the reforms of the Hawke and Keating governments of the 1980s and ’90s). Moreover, there is a growing realisation that our nation’s most pressing public policy problems can be traced back to Howard’s time in office.
This week, Prime Minister Malcolm Turnbull – a one-time ferocious critic of critics of 457 visas – discovered that they were a problem after all in the context of persistent unemployment and chronic underemployment, especially among the young and regional workers. “Australians must have priority for Australian jobs,” bellowed the PM in an exercise of rebranding rather than substantial reform of an oft-abused scheme. The professions for which 457s are most commonly used to bring in foreign workers remain on the list of eligible occupations, while the government has proposed removing not-so-keenly-contested visas for deer and goat farmers. Turnbull sought to blame Labor for the scheme’s problems. In fact, this is a Howard-era piece of legislation introduced in 1996, long before the mining boom of the 2000s kicked in. Turnbull’s proposed course of action does little towards addressing the skills-shortage crisis. It doesn’t change the flailing apprenticeship system or the virtual destruction of TAFE. Indeed, 457s were a lazy means of avoiding the essential training that ought to be funded by government, a short-termism that continues to plague our policy settings.
Ahead of the May budget, the Coalition’s rhetoric around needing to tackle debt and deficit – brutally effective during the Rudd and Gillard years – is strangely absent. A short-term desire to produce a surplus has given way to the long-term reality of deficits confronting governments globally. For this too it can largely thank Howard and his treasurer, Peter Costello. It was the Howard government, in particular the tax (reducing personal rates) and expenditure (expanding middle-class welfare) policies of its final budget, that locked in a structural deficit, an intergenerational malaise exposed by the GFC and the tapering off of a once-in-a-century mining boom.
The mining boom also had the effect of concealing the downturn in productivity growth during the Howard years. Productive infrastructure investment was – and remains – grossly inadequate, whether road and rail transport, broadband internet, and other critical fields such as health, education and energy.
The 2017 barbecue stopper, to borrow a Howardism, is housing affordability. As Australian Workers’ Union assistant national secretary Misha Zelinsky argues in his forthcoming John Curtin Research Centre essay, Howard’s “Twin Gorillas” of negative gearing and capital gains tax deductions, working in tandem with house price–inflating policies such as the First Home Owner Grant, are largely to blame for a state of affairs whereby Australia’s five major housing markets are rated as “severely unaffordable”.
Then there is the small matter of climate-change action and energy policy. Howard was dragged kicking and screaming to support an emissions trading scheme prior to the 2007 federal election. Henceforth his party became staunch opponents of any form of carbon pricing. Yet even before that inaction, the Howard government did precious little to promote solar power and other renewable sources of energy, leaving Australia miles behind developed economies such as Germany.
Turnbull and his supporters are fond of blaming Tony Abbott for the ills of his government. They are half right. Howard’s policy chickens have come home to roost. For that lack of long-term vision we are all the poorer. Turnbull’s ludicrous plan to include an “Australian values” test – another throwback to Howardism – for prospective citizens is unlikely to achieve anything of substance. Judging by Turnbull’s policy-on-the-run antics, Howard-style short-termism is here to stay.