When we think of worst prime ministers, the completely useless Bill (Sir William) McMahon comes to mind, followed by the negative, sloganeering bully Tony Abbott. However, if you are looking for a PM who did actual damage to the country’s economic and social fabric it’s hard to go past John Winston Howard.
Mike Seccombe has a brilliant article on the topic in the Saturday Paper, where you are allowed one article a month free, or can take out a sub for about $1.90 per week.
- Examine almost any contemporary political problem, from Australia’s growing economic inequality to the declining performance of our school students relative to the rest of the world, to our dying coral reefs, and you will find the fingerprints of John Winston Howard.
He says that Howard is the most right-wing PM we’ve had, and was very effectual in a negative sense. I’ll summarise some of the examples given in the article.
Former big bank economist Saul Eslake reels off a list of economic decisions that made us more unequal:
- “We used to have a social security system that said if you, through no fault of your own, weren’t capable of providing for yourself and your dependants a decent standard of living, the state would help you out.
“Under Howard we moved away from that to a system that said, if you tick a box you can get cash. If you’re a first home buyer, if you have private health insurance, if you have a baby, if you are over 65, if you are a self-funded retiree, you get cash, whether you need it or not.”
There was no rhyme or reason to it, except as an example of class prejudice and to benefit those on whom the government depended for support: the wealthy, the older and the self-employed.
Howard sprayed money around to win votes, but I think he was the first to truly make traditional welfare recipients feel they were the undeserving poor.
Eslake along with Ross Garnaut and Chris Richardson warned that what Howard and Costello were doing was unsustainable. They were:
- “…converting a temporary windfall revenue gain into a permanent erosion of the tax base and a permanent elevation of the welfare spending base.”
The current LNP government has wound back some of the more outrageous superannuation concessions, but they have also shored up the rich by cracking down on the poor, if you think of the Centrelink robo-debt debacle, and the extension of waiting periods for unemployment benefits.
John Hewson says the tax cuts, including those perpetrated by Kevin Rudd to match Howard’s promises, roughly equal today’s deficit. Hewson says that when every year revenue numbers exceeded projections a rational person would have invested the excess in a sovereign wealth fund, to be drawn on in more difficult times.
On schooling David Kemp piled money into private schools, especially for rich kids.
- Per student, the amount going to private schools went up by $1584 between 1999 and 2005, compared with $261 per state school kid.
The consequent shift of kids from more privileged backgrounds into the non-government sector saw the state system increasingly ghettoised.
The current government has cemented the advantage of the rich by, under Gonski, directing as much per student government funding to private schools as to government schools, on the criterion of educational need. Private schools get enough from the government to provide an education comparable to state schools; the fees they pay are pure bonus.
Then rather than have an independent, professional public service, Howard ran the public service through the terrifying Max More-Wilson, who stripped the public service of a great deal of competency and corporate memory, cut it to the bone and centralisiong power in the political office of ministers. Howard also centralised power in the Liberal party, taking a direct and personal interest in matters.
Howard became a cultural warrior, encouraging people to resent other groups, such as blacks, greenies, gays, migrants, and to blame them for their dissatisfactions.
Then he conflated asylum seekers and terrorists and:
- in his next act of desperation, he turned himself into a wartime leader.
That is when he became a pimple on George Dubya Bush’s backside, joining the war in Iraq which had no congressional approval or UN sanction, justifying the war on the existence of weapons of mass destruction, which the intelligence community knew did not exist.
Remember when Howard’s choice for governor-general, the former Anglican archbishop of Brisbane Peter Hollingworth, fell in a heap over his actions, or lack of actions on institutional child sexual abuse?
The opposition wanted to have a royal commission, but Howard said it would only line the pockets of lawyers. However, he was prepared to send in the army on the NT intervention. He also scrapped the Aboriginal and Torres Strait Islander Commission.
- Infamously, he refused to apologise to the Stolen Generations, arguing that to do so would imply “intergenerational guilt” and embrace the “black armband view of history”.
Bait and switch, divide and conquer, blame the victim. That was the Howard way.
Finally, he tipped the balance in industrial relations in favour of the bosses. In a way it was emblematic of how Howard saw human nature and the human condition. Every person was a business centre, responsible for their own future, capable of transacting to their benefit with all other business entities.. The gig economy became embedded in our work culture, making it difficult for people to construct a life.
I didn’t go into it, but high house prices are also John Howard’s fault, according to the article.
In the end, the electorate had had enough and spat him out.
Malcolm Turnbull should worry, because the electorate appears to be turning on him too. He has not fixed to their satisfaction the Australia Howard made. Many have been waiting for the real Turnbull to show up. It has been a bit like Waiting for Godot.
57 thoughts on “It’s all John Howard’s fault”
A wide ranging summary.
A particular pair of moves I detest, was
1. Halving capital gains tax
2. Making retirement income from superannuation funds INCOME TAX FREE.
2 benefitted thousands, not just the wealthy…..
1. was unnecessary: someone who has just made an actual realised capitsl gain has cash on hand at that moment, can calculate the CGT and put aside that amount, to hold for income tax time.
They suffer no hardship thereby.
Might earn income on that lump of money held.
1. Favours the very wealthy and also the modestly off who happen to have realised a capital gain.
Ambi, I think the capital gains changes were in large part due to farmers and small business people who in later life wanted to sell what they owned and fund their retirement. Certainly Paul Keating had the attitude that a dollar was a dollar and should be treated the same everywhere. His conservative successors have brought distortions into the equation.
I think my biggest beef is with the gig economy and the attitudes to welfare recipients. The people making these decisions are in no danger of themselves having to live by them.
That is leaving aside treatment of refugees.
It’s all Howard’s fault or it’s all Trumps fault. But at some point you can say that the voters elected him/her and that they must take some responsibility for the outcomes.
It will be very interesting to see how the American people vote in the mid term elections next year. The entire House of Reps is up for re-election and one third of the Senate. If Republicans maintain their majority in both then I would say the people have clearly voted to support an President knowing what he is and maybe what to expect of him. In that event I would say the US citizens as a whole take broad responsibility for Trumps action. That logic applies surely applies to Howard’s time and thereafter.
That’s true if the politician in question follows the policies clearly announced before her/his election, or as close to those policies as parliamentary compromise will allow; or under unforeseen circumstances, actions consistent with her/his other publicly announced policies and widely known attitudes.
I agree entirely that the voters must take ultimate responsibility.
The Press must inform us fully on facts and any policies theatre under consideration (and their likely outcomes, “scenarios”).
My view of President Trump is that he was legitimately elected, those who voted must live with the consequences; and the famous “checks and balances” must swing into action if and when anything truly outrageous, or unconstitutional, or illegal, … is attempted.
BTW, Geoff H and Brian: do you think we have enough effective “checks and balances” on Canberra’s power, at present?
One of the worst things we endured was the 11-year-long Howard Hiatus: all the lost opportunities at home and abroad.
There’s a need to look deeper than covering up child abuse to account for the fall of Governor-General Hollingsworth. He was one of the very few G-Gs who ever had the guts to stand up to a Prime Minister – and, of course, he paid the price for that.
The Chinese Cultural Revolution had its Red Guards; we had Max The Axe’ Different clothes, different slogans, same ideological fairy-land. It wasn’t just the Public Service that he wrecked; he took the locks off the doors and let all sorts of con-men and consultants(??) in to plunder the economy.
Speaking of the economy. Howard was too spineless to say “NO!” to the procurement of useless or obsolescent war-toys , which were inflicted on us at robbers’ prices. These war-toys were – and are -some of the most expensive scrap-metal ever seen on this planet.
Indeed, the voters may have elected the Howard clique – but for a democracy to be effective, the voters must have access to timely, reasonably full and reliable information – “competition” in the supply of that information would be nice too, however, we do live in Australia where such choices are nothing but an aspiration, and , so long as the media’s Two Party Preferred racket continues unpunished, we will always be saddled with duds like Howard.
Cheer up. 2018 might even bring us honest elections and competent government too.
Con-men, shysters, robber barons we will always have amongst us……
So, what to do????
Jail sentences for white collar crime, especially at the top echelons?
Strengthen ATO investigative powers?
Anti-corruption body to be established federally?
Revive the ancient art of financial and business journalism?
Engage in effective international action to reduce fictitious “transfer payments”, tax havens, secret offshore bank accounts, hidden commissions, etc. ?
Force corporations who take Australian payments (i.e. do business here) to pay tax to the ATO?
Somehow reduce the incentive for State Govts to compete with each other in offering tax holidays to prospective investors?
In the modern era, opening up the Australian banking system to foreign merchant banks must have enabled some shysters to move in; not because they were foreign, simply because here was another opportunity to make a quid…..
Yep, looking at you Mr Turnbull. And looking at you, Nicholas Whitlam, and a rabble of corporate lawyers, wide boys, white shoe brigadiers, Dodgy Brothers and all.
Ambigulous I had written about the role of the Press in my original draft but scrapped it to avoid repeating myself – I have long held the press in disdain for neglecting their social and political roles. As Graham B commented upon the need for electors to be informed he was saying the press is really part of the problem because they fail to properly inform the public.
BTW, Happy New Year to all …
Ambi and Geoff, there was an article recently in the New Scientist saying that the political discourse really has become dumber. I must look it up.
I think it would help if the ABC adopted a ‘truth seeking’ stance, rather than ‘balance’. As the matter stands if a pollie is talking arrant nonsense, the newsreader just repeats it, giving it a weight it doesn’t deserve.
Also I think one of the Scandinavian countries has a law against pollies telling lies. It gets bad when the lying and misleading is quite deliberate, as it was with electricity prices in the Qld election.
I also think groups like Stop Adani should be held accountable for opportunistically perverting the election into a publicity campaign for an unrelated cause.
I know all that is problematic, but democracy is not working well.
From John Howard we had three big scare campaigns in a row. The first was the “Beazley black hole” in 1998 which wasn’t a hole and wasn’t Beazley’s.
Then we had “we will decide who comes to the country…” in 2001. Then in 2004 he hammered home that interest rates would always be lower under his mob, followed, from memory, by 7 interest rate rises in a row.
We can, as you say, still point out that people voted for him, but major responsibility remains with the perpetrators of these atrocities on the public psyche. There was a choice.
Thanks Geoff H. Graham B, Brian B and everyone else, visitor or poster or blogger.
Happy New Year to all!!
There is an exasperated piece about “financial/political news” over at The Failed Estate blog.
Mentions the Silly Season, but the critique is more widely applicable IMO.
Hopefully this has been sent to John Howard for right of reply, what’s just common courtesy.
For mine he ushered in a few bad things, draconian firearms laws that didn’t make a jot of difference to firearm fatalities or injuries.
Also presiding over a time when taxpayers giving welfare went from ” benefits ” to ” entitlements “.
On his plus side there was a $50 billion cushion ( the last time Australia was in the black ) when an economic hiccup happened and his influence over the banking sector that along with interest rate cuts did way more than any stimulus in preventing a severe recession.
‘Tis true he spent like a drunken sailor to keep the top job in an effort to try and justify shafting Costello, a broken promise I believe turned a potential slim win into Ruddslide.
That said, to say it’s all Howard’s fault is to ignore ALP/greens were in office for 2 terms with both houses to fix things. They didn’t.
On the media, as I’ve said in the past, it’s not the news they publish it’s the news they don’t that is their shortcomings.
So for example Mr J, they don’t publish enough useful information about financial institutions, the economy, business successes, innovations, tax avoidance and predictive modelling.
Jumpy, if you read the article it doesn’t ignore that Rudd/Swan tried to fix things and found it difficult.
One problem was that the revenue kept drying up, contra Howard/Costello where it kept flooding in, and they were as obsessed as their predecessors in trying to keep spending below 23.9% of GDP. You can’t run a civilised country on that.
Revenue had 1 dip in dollar terms under ALP/greens, the rest was up and up. In that dip ALP/ greens thought it a great idea to spend our way to prosperity, hence the debt. Turnbull is still playing that tune, albeit less loudly.
Spending to gdp isn’t a perfect metric of a country’s economic health, just ask Venezuela and Cuba ( very high ) or Hong Kong and Singapore ( very low )
Terms of trade are a healthy ingredient in the economic pie. ALP/G had the highest in our history but spending out stripped that too !
A better heading would be ” It’s all John Keynes fault “
There’s already a lot of focus on tax avoidance, but only on business and the wealthy as if it’s illegal. But no focus on middle class evasion that is illegal.
And I’ve had it up to my neck with predictive modelling where inputs are massaged assumptions. Be it from Grattan, IPA, Australia Institute or Treasury. All claim to be accurate but all different and mostly wrong in hindsight ( but they don’t publish their inaccuracies down the track do they )
J.M. Keynes’ fault???
so how were nations to crawl out of the Great Depression of the early 1930s, without huge unemployment, widespread privation, misery and possibly starvation?
Should WW2 have been deliberately started seven years earlier as a properly free-enterprise, pump-priming exercise with concomitant manpower enlistment, womanpower enlistment ditto, reviving heavy engineering through aircraft and naval vessel construction, tanks, anti aircraft guns, ammunition, etc.??
How, really, would you have done it Mr J.? Come clean, sir!
Perhaps pure laissez-faire???
Check the numbers, Swan had bigger revenues than Costello could dream of but spent the lot, and then some.
Back of the envelope calc,
Current Fed debt $600 bill.
Annual interest payments on that $12 bill.
Biggest surplus ever $20 bill.
Number of years of conservative biggest surplus ever to pay off debt = 75 years.
Under that highly unlikely scenario, next generation to be debt free = my great great grandchildren.
Jumpy, two things. First, companies listed on the stock exchange usually run at debt about 30 to 60 per cent of net worth. If they don’t they are seen as having a lazy balance sheet and will probably get taken over.
That doesn’t mean that the company analogy should apply to the county’s finances, just that debt should not be seen as self-evidently bad. So please go and cook up a real argument.
Secondly, have you ever noticed we have such things as population growth and inflation? Revenue and expenditure is a record every year unless something serious goes wrong, as it did with most countries with the GFC.
The other thing Jumpy is that you are claiming that all of the debt is caused by Labour. Completely false. What ever debt Labour ran up in the GFC period struggling under the subsequent loss of fiscal power hand to them by initially Howard and then the GFC, today’s Lurch of Latter Day Liberals (Australian context) have magnified that debt many times over, without the wild card of a GFC but for the very same reasons set up by John Howard.
That is Liberals are good economic managers is now a fully Debunked Myth. It was in fact never true.
For better or worse Howard was an influential player long before he became prime minister. As Frazer’s treasurer he had to grapple with stagflation and the failure of Keynesian economics to deal with this problem as well as bottom of the harbor tax avoidance schemes. My understanding is that he had some influence internationally on the development of Thatcherism.
Stagflation occurred as a response to the oil shock and the feeling of both unions and business that they should be protected from the effects of inflation. In the case of the unions they wanted wages to at least rise in line with inflation with gains that they had made in the past being protected no matter whether the economy could support it. Howard seemed to put all the blame on unions even though part of the problem was business pushing up their prices to protect profits. Stagflation was one of the reasons the Libs lost power in 1983 and, even worse, the stagflation problem was resolved by Hawkes ability to get union cooperation. Part of Howard’s hostility to unions may have started there.
Howard also had significant influence on what Hawke and Keating did. Keating liked to boast to Howard re how he, Keating, was able to introduce things like privatization that Howard was unable to do.
That is all very informative and interesting, JohnD.
Let me add some perspective to this, though, around
“Stagflation was one of the reasons the Libs lost power in 1983 and, even worse, the stagflation problem was resolved by Hawkes ability to get union cooperation”
It is never mentioned or appreciated that around the beginning of the 80’s the world was in the process of a massive increase in productivity brought about the introduction of computers, the introduction of the micro controller, and the integration of computers into manufacturing machinery and the intensifying of the use of plastics as they permeated into every new or redesigned product.
There is a PhD in there for some budding economist or historian willing to wade through the data to quantify exactly how significant this time was and just how little influence politicians had on the global changes that were under way, and how that led to the general global stability of the time.
I haven’t suggested that the ONLY tax avoidance is achieved by wealthy individuals or corporations. If journalists have fallen into that trap, that is their responsibility, and shows their limited understanding of economics, finance, and their fellow human beings.
On “predictive modelling”, I was thinking more of the “business case” that should be presented by a Govt before a major project or a new policy: some estimates of likely outcomes, however uncertain the assumptions.
The RBA had a “model” of the whole Australian economy back in the 1970s. I bet their latest models are more accurate, based on more data than then, and including all sorts of effects we non-econometrician so can only guess at. They have the ABS to assist.
By the way, Mr J: you haven’t answered my sincere question, as to what policies should have been followed at the time of the 1930s Depression. You damned JM Keynes. What is your alternative?
(If I was like that scallywag “Jumpy”, I would demand a response. If none appeared I would crow about my “victory”; I shan’t.)
The 30s depression was mainly the work of the Federal reserve, thanks Wodrow Wilson (D)
Keynesianism prolonged it.
Also I wasn’t referring to your thoughts on tax avoidance, rather the media. No need to make things up and get snarky at me about it.
Same goes with you BilB, I never said ALP was responsible for all the debt. This present LNP mob are fucking terrible with it.
Please people, I can get in enough trouble with what I say. No need to put words in my mouth and bash those.
Happy New Year, Jumpy!!
Just re-read what I offered at 7.42pm on tax avoidance, Mr J.
Any snark was directed at journalists.
Woodrow Wilson left office around 1920 I think. Did his influence last into the 30s?
How about Pres. Hoover?
Pres. Roosevelt II?
Jack Lang? Ted Theodore? Mr Scullin? Bank of England?
these events and eras are surely never monocausal?
Oh, those scallywag journalists, ok.
Two things are certain in life.
1) Everyone will die at some time or another.
2) some shifty buggers ( and not so shifty buggers ) will make money from every Government action.
The 1st can’t be minimised, the 2nd can.
Jumpy, you always seem to have simple answers to complex issues, like:
Oh to be blessed with such insight and perspicacity!
Ambi, if you go here you’ll find that Ben Bernanke agrees with Jumpy about the fed, and if you look at Woodrow Wilson, he departed in 1921, but one of his sins was to invent the Fed.
It’s just that if you look at Wikipedia, the monetarists say that the Fed did not cause the depression, they just failed to stop it.
I’m betting that the closer you look the more complicated it gets.
That’s quite funny Brian on an ” Its All John Howard’s Falt ” thread you accuse me of not seeing complexity.
It’s All John Howard’s Fault right ?
Well, it makes a change from “It’s all the government’s fault”.
Yes, Pres Wilson ruled until Inauguration Day in 1921.
I meant his substantive rule was up to the end of 1920.
Woodrow Wilson, like every President, did some useful things and some other things that don’t look so good. Last check-up, the optometrist said I still have 20/20 hindsight.
(I thanked her not to be assessing my hind; cruelty to old folk is a grievous sin in my book.)
Has the Fed been a disaster??
Jumpy, In examining the complexity sometimes a new simplicity emerges. Any way I think Mike Seccombe makes a good and detailed case in the article.
Has the Fed been a disaster?
I remember a book on economics circa 1968 which argued that the authorities always made the wrong decision, because at the time the information they were acting on was at least a year out of date. (I was cataloguing books in the UQ library at the time.)
I also recall Peter Martin saying in the 1990s that economic information was always 6 months out of date. So captains of industry when asked about the future, would give you the present, but you wouldn’t know until six months later when the present was the past and the future still unknown, so they were always wrong too.
I think the problem is still there, except, if you believe them, and no-one does, in China.
I would have thought if one was negative the the economic growth model then the Fed Res would be considered enemy No.1.
It has inflation targets and controls interest rates and prints money ( not the mint kind, the quantitative easing kind that dilutes value of existing money ) to achieve that inflation. If inflation was zero on average there would be far far less pressure on growth.
Please someone, anyone, tell me they get that…
Sorry Jumpy, for me to get it you’ll have to explain the difference between the money the Fed Res mints and the “mint kind”.
Gough was the last prime minister to have fought in WWll. His generation had gone through a war and a depression and had seen what happened as result of the failure of economics during the great depression. It was also a generation of leaders who were quite rightly scared by the communist threat and the danger that communism could grow if the workers were not treated well or the Australian economy did not have some protection form international economic turmoil.
However, by the mid sixties the war and depression were over 20 yrs in the past and people were starting to believe that the good post war years would last forever and the economy was bullet proof. The new generation of leaders started talking about the benefits of free markets and the failings of the welfare state.
I see Howard, Keating, Frazer and Thatcher as people of their times who are still having a bad effect on government thinking.
Agree totally with your analysis JD.
And I’d add Saint Ronald Reagan to your list of rubes taken in by the neoliberal snake-oil salesmen.
“”It was also a generation of leaders who were quite rightly scared by the communist threat and the danger that communism could grow if the workers were not treated well or the Australian economy did not have some protection form international economic turmoil.””
As the unions and their party were the heart of the communist pustsch.
Too stupid to see the devastation that communism naturally resulted in, despite it happening right before their eyes.
Still today some yearn for a replacement of the most beneficial system mankind has ever seen ( Capitalism) with a proven failure (communism)
Our master thread derailer at work again, as usual trapped by his predilection of black and white thinking and well and truly stuck in another false dichotomy.
By Howard’s early mid term I came to the conclusion that history won’t be kind to him. One of the few good things he did was the gun control. It was like the Wild West here in Katterland before that.
As far as I know there has never been a communist putsch in Australia.
St Petersburg 1917 yes. Budapest, Bela Kun, yes. Germany approx 1919, yes. Vienna 1930s, yes. Djakarta 30 Sept 1965, yes. Some succeeded, some failed.
I heard that Lenin and the boys didn’t expect to hold power for much longer than 100 days in October 1917.
Lenin was mad keen to seize power , other Bolsheviks not so keen.
Anyhow, please explain the date and circumstances of the Aussie Communist Putsch.
Other Communist govts came to power after long civil war or long independence fights. Then there were the anti-democratic coups in Eastern Europe after 1945 under the watchful eye of the Red Army.
Ootz, look again, the thread was off the tracks before my 5 days away.
And perhaps some stats to back your ” Wild West ” memories, mine are quite different. Howard’s gun laws did as much as Roxons plain packaging laws, nothing at all.
Mr A, it was and still is a silent putsch.
Ask Lee Whatevershecallsherselftoday.
Jumpy, the fact that you are still pushing that false dichotomy is what is unbelievable. I’ve wasted a lot of keystrokes on that in the past and have no appetite for a resumption.
John, the theory of free trade is good. You do what you are good at, I do what I’m good at and we sell to each other.
Problem is the rich countries never believed in free trade, rather in opening markets for their own goods. The poor countries finally had enough in 2001 in Doha and then in Cancun in 2003 when they derailed the WTO talks.
Since then we’ve had preferential trade agreements, the first biggie under Howard with the USA. The trade officials told Howard that it was not in our interest, but Howard personally shopped us to his mate George Dubya.
Mark Latham was ideologically committed to ‘free’ and too stupid to oppose.
Jumpy, you were first to comment on gun control and generally making unsubstantiated claims. You have a look yourself, you should know by now that I rarely make claims I can’t back up.
Was chatting with my Venezuelan friends just yesterday and the environmental damage that’s occurring over there is horrendous!!
Poor buggers are starving.
Ootz, you said deraile, my comments on gunswere ON topic.
Now I’d love to take your word for the Wild West style gun slaughter that happened before JWHs gun laws, but I don’t given your proclivity for mendaciousness.
A “silent campaign” or “secretive campaign” I can accept, Mr J.
A “silent putsch”???
Well, now you have got me scratching my head.
Relevant to this thread is the chapter of Richard Sennett’s The Corrosion of Character, then the review.
The central question:
This was written 20 years ago. What would he make of it now?
All that happened before John Howard, who made things worse with the gig economy.
Jumpy, I’m still waiting for an explanation of the two kinds of money in the USA.
Does the same fatal flaw affect our own Central Bank (the RBA)?
I been told its primary aim is to keep inflation within bounds, and it sets interest rates and it mints cash – just like the Fed Res.
Well zoot, you can keep waiting or go look for yourself.
How about I use a variation of ” I been told ” or ” from memory, can’t find the link ” excuse?
The RBA note printer is out Craigieburn way, north of Melb., pumping out those polymer banknotes, which are an excellent Aussie invention. We Victorians are happy to share them out across the wide, brown land.
The Mint, producing coins, used to be in Spencer Street, Melbourne. The building is now the Immigration Museum.
I have looked, and nowhere can I find a description of two kinds of US currency. How do you tell the difference? Does the government allow people to pay their taxes with the worthless stuff? Has anyone suggested printing the dud notes a different colour?
Enquiring minds want to know.
Your thought processes are more than a little opaque, but I gather from this that you believe the US Fed and the RBA do not perform the same functions within their national economies.
Am I correct in assuming this?
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