Cabinet papers 1988-89: Budget fix needs urgency, ambition, bipartisanship Troy Bramston Columnist AUSTRALIAN JANUARY 01, 2015 Bob Hawke at the Woodford Folk Festival in Queensland. Picture: Megan Slade Source: News Corp Australia < PrevNext > •• THE trio of former prime ministers who implemented major reforms to the economy have called for the budget to be urgently repaired and the government and opposition to unite behind a transformative economic policy agenda. The exclusive interviews with former prime ministers Bob Hawke, Paul Keating and John Howard come as the National Archives of Australia today opens the cabinet papers from 1988-89. The papers serve as a timely reminder of an era of groundbreaking economic, social and environmental policy change. Mr Hawke, prime minister from 1983 to 1991, said there was a need to educate the electorate about the economic challenges facing the country and convince voters of the need for reform. The deteriorating budget bottom line had to be addressed because governments “can’t just keep pushing up taxes”, he said. “I have always operated on the assumption that ignorance is the enemy of good policy. “Once people know the facts, normally they will respond favourably to reform. We started an education process at the 1983 Economic Summit and we continued it right through the government’s term. Producing three budget surpluses (87, 88 and 89) showed that we could manage an economy, bring in significant economic reforms, lower unemployment, reduce inflation and do it in a way that didn’t endanger the fiscal position of the country.” Mr Keating, who served as treasurer from 1983 to 1991 and as prime minister from 1991 to 1996, cited the economic reform program of 1988 and 1989. It produced surplus budgets delivered alongside structural adjustments to the economy such as tariff cuts, industry deregulation, asset sales, wage restraint and taxation reform. “It was, of its essence, a momentum play,” Mr Keating said. “That is, my old line: ‘Good policy is good politics.’ It was the belief that if you brought the community with you into the conversation, where the government was running an inclusive discussion, then you could run a reform program of this kind and be rewarded for it.” Australia needed to address the underlying structural problem in the budget as spending in some areas had become unsustainable, Mr Keating said. This required a vision, political courage, and the capacity to make a compelling argument to voters. “Policy ambition and urgency, that’s the lesson for today,” he said. “Without policy ambition, and without the core of the government believing changes are absolutely necessary and competently selling them, and doing it with urgency, then these sorts of tasks can’t be undertaken.” Mr Howard, who served as opposition leader from 1984 to 1989 and succeeded Mr Keating as prime minister in 1996, said a key lesson from the 1980s was that the Coalition and Labor could work together to fix the budget and implement economic reform. “The lesson is that at crucial times you do need an acceptance on both sides … that bipartisanship around measures that are clearly in the nation’s long-term interest is essential if the long-term interest is to be promoted,” Mr Howard said. “There was only one sustained period — and even then not on everything — of bipartisanship between government and opposition on economics and that was the period we’ve been talking about (the 80s). Most of the reforms they undertook, I supported (such as) tariff reform, financial deregulation and most of Labor’s fiscal consolidation … I did argue that Hawke should have gone further on reform in some areas. So, politically, adopting that position made it easier for the government of the day.” Mr Hawke’s principal remedy for budget repair is for Australia to become a depository for the disposal of nuclear waste. His “mission” in 2015 is to convince the Coalition and Labor to support this idea. Joe Hockey had given it “a positive reaction”. “We have to take the world’s nuclear waste,” Mr Hawke said. “It will totally transform the fiscal situation. A significant part of dealing with climate change is increased use of nuclear power. The limiting factor is the disposal of nuclear waste. Australia has the safest remote geological sites in the world for the storage of nuclear waste.” The Abbott government faces deficits totalling $103.9 billion over the next four years, up from $43.6bn forecast at the time of the May budget. The forecast deficit for 2014-15 is $40.4bn. A surplus is not forecast until 2019-20. Former Treasury secretary Martin Parkinson has warned that Australia is living beyond its means, with too much spending on health, welfare and education. He called for “politically tough decisions” like those in the 1980s to address the “structural problem at the heart of the budget”. Mr Howard said Labor was being obstructionist, but he also set a key test for the Abbott government, struggling to gain public or parliamentary support for key budget measures. “We clearly have a budget problem that will get worse unless we make progress … It has long been my view you can win public support for difficult reforms if you satisfy two criteria: it is in the public interest and it is fair.” Mr Keating said the Coalition did not support all of Labor’s economic reforms, such as the Accord or superannuation, but he recognised some bipartisanship. The opposition should support the government’s program, provided it was credible and in the national interest, he said. “I think it is a good idea if the government knows what it is doing,” Mr Keating said. “But without the government articulating a strategy — a saleable, doable, adoptable strategy — then you won’t have the co-operation. This idea about letting people just read about structural changes in the budget is the pathway to ruin.” Paul Keating at his Sydney office. Source: News Corp Australia Bob Hawke at the Woodford Folk Festival in Queensland. Picture: Megan Slade Source: News Corp Australia
Posted on: Wed, 31 Dec 2014 13:57:36 +0000
Trending Topics
Recently Viewed Topics
© 2015