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Autumn 2000 cover

National Observer Home > No. 44 - Autumn 2000 > Editorial Comment

The Government of Mr. John Howard

Mr. John Howard has now been Prime Minister for some four years, and it is appropriate to assess the performance of his Coalition government during that period.

With some important qualifications, which are discussed hereunder, Mr. Howard appears to have been reasonably successful in view of the difficulties that he has faced. The principal difficulty has been the Senate, where the balance of power has lain with the Australian Democrats and other minor groups and independents. Essentially the Democrats have revealed themselves to be an opportunistic party. They do not, it appears, include parliamentarians of intellectual strength or with an understanding of more than perceived short term electoral advantages.

Accordingly there have been insuperable obstacles in having appropriate legislation passed by the Senate. It is hardly going too far to say that any important legislation has become almost impossible to enact. Generally either the legislation is blocked in its entirety or the Democrats require amendments that seriously reduce its effectiveness. This is a matter for serious concern, not merely in present circumstances. That a power of veto should be possessed by groups with apparently very mediocre abilities and significant degrees of irrationality poses a continuing threat to sound government.

Mr. Peter Reith has attempted consistently to introduce industrial reforms. He inherited a system in which an inefficient and misdirected work force detracted from Australian competitiveness. In his efforts he has been given support by Mr. Howard, but it may be thought that Mr. Howard should have involved himself to a greater degree. Responsible and reasonable unionism is one thing, but the behaviour of the more extreme unions - the maritime union and the construction unions amongst others - is quite another thing, and is an impediment to improvements in standards of living in Australia.

Mr. Reith has been a positive strength of the Coalition, as a person with convictions and the courage to seek to implement unpopular policies, and some other Coalition ministers have shown themselves to be worthy of respect. For example, Senator Nick Minchin, Mr. David Jull, Mr. John Moore and Mr. Tony Abbott are all intelligent and principled, and Senator John Herron (in the very difficult Aboriginal Affairs portfolio) has struggled honestly and conscientiously to bring sense into an area where political correctness and aboriginal misinformation have become out of control. Mr. Tim Fischer proved to be widely respected, whilst Mr. John Anderson's impact remains to be seen. There have of course been weak performers. Mr. Daryl Williams may be the least satisfactory Attorney-General since Lionel Murphy, and Senator Alston - never regarded as an intellectual leader - has shown himself somewhat ham-fisted in regard to telecommunications and the media.

Mr. Daryl Williams was commented upon in an earlier issue of this Journal, in relation to apparently misleading comments made by him during the republic debate.1 Further, during his period of office little has been done by him to correct a significant imbalance in the Federal Court, which is perceived to have an undue bias in favour of unions and aboriginal groups.

One of the most important financial acts of Mr. Howard's government has been the sale, in two stages, of forty-nine percent of Telstra. This part-disposal reflects again the difficulties that are encountered in the Senate by Coalition governments. Financial commentators appear to agree that if Telstra remains merely partly privatised it will be unable to compete successfully with rival companies and will not be able to maintain appropriate profitability. It may be hoped that an acceptable formula will be devised whereby consumers (and especially rural consumers) will be adequately protected and the government ceases to be a shareholder.

The most controversial of the Coalition government's initiatives has been in the area of taxation. The introduction of a G.S.T. (a goods and services tax) and a large number of actual and proposed changes to the tax system were discussed in the Summer 2000 issue of this Journal.2 These changes are being made under the auspices of Mr. Peter Costello, who it is thought has been unduly influenced by public service advisers, and particularly by ideological elements within the Australian Tax Office. It is to be hoped that Mr. Costello will at last distance himself from these elements and pay more attention to small business and rural groups. If the next election is lost by the Coalition, taxation issues are most likely to prove the cause, and moderation of proposed income tax amendments has become a matter of urgency.

Other matters remain to be addressed. In particular, welfare spending has not been restrained sufficiently. Mr. Howard conceded on 28th January 2000, "Aggregate expenditure on health, education, social security and welfare rose from $75 billion in 1995-1996 to $86 billion in 1998-1999, an increase in real terms of 12.3 per cent." This compound rate of increase, of approximately 4.1 per cent per annum, imposes an increasing burden on taxpayers.

A related issue is the excessive cost of public servants. Their number needs to be reduced drastically, as do the levels of their salaries and benefits.

It is not surprising that although when Mr. Whitlam assumed office tax took 23 per cent of gross national product, it now takes 31 per cent. The burden of this very large increase has fallen particularly harshly on taxpayers in lower and middle tax brackets.

In the background, but unable to be ignored, is the annual balance of payments deficit, which now approximates $30 billion per annum, with an accumulated total deficit approaching $300 billion. In fact, the growth in G.D.P. that has been taking place in Australia depends essentially on continual large-scale borrowings from abroad. When once the borrowing habit is established, it must be maintained by further borrowing, ever-compounding. Eventually this rate of borrowing will become unsustainable, and the economic consequences will be dire.

National Observer No. 44 - Autumn 2000