Australia: Former PM John Howard's book reveals drastic decline in democracy since Menzies

Former PM John Howard's latest book, The Menzies Era, is not as you might expect, an exercise in right wing propaganda, or at least not overtly, but an historical account which jolts the mind back to things forgotten or chronologically misplaced, due to the passage of time. Howard may have gone a little overboard in painting it as a golden era, but this enthusiasm has an unintended consequence that makes it worth reading.

A bit of history ...

John Howard, our former prime minister, has become something of a writer. His latest book - The Menzies Era – is not as you might expect, an exercise in right wing propaganda, or at least not overtly, but is a historical account which jolts the mind back to things forgotten or chronologically misplaced, due to the passage of time. Howard may have gone a little overboard in painting it as a golden era, but this enthusiasm has an unintended consequence that makes it worth reading. Controlling the future requires control of the past, but John Winston Howard has exposed the past and allowed us to contrast his idol's performance with those of contemporary politicians.

And its not a good look for either side of politics.

In summary: The period from the late 1940's to the 70's - often called the Menzies was a time of unrivaled prosperity. Menzies, who had been PM in 1939, formed a new political party in 1945, the Liberal Party, and he insisted that the party room could not give directions to the Cabinet. Menzies believed that, as the party room could not vote on policy, any backbencher was free to vote against the government in the Parliament. In short, every backbencher had a conscience vote, a democratic approach that compared favorably to the ALP's demand for consensus and a liberty that has unfortunately been all but lost. The liberal party came to power in 1949 and remained there for 23 years, with Menzies as PM for 16 of those.  He was an excellent orator, and a forceful speaker as well as a talented parliamentary debater with a ready wit, a clear analytical mind, and a superb command of language. Perhaps more importantly, he knew how to divert, with the golden handshake, potential challengers to his leadership. He played the Communist bogey and ALP weaknesses to perfection, and was one of the first federal party leaders who actively targeted women’s votes and the first party to have a woman, Dame Enid Lyons, to serve in cabinet.

Of course “the Menzies Era” would have been different if it had been written by someone like Manning Clark or (heaven forbid!), Paul Keating. Harsh terms would have been used: Pompous, plummy voiced, anachronistic, forelock-tugging establishment figure, completely lacking in Australian authenticity, who denied this nation its independent greatness because of his absurd reverence for the British empire. And that's just the nice stuff. Left-wing authors would have highlighted Menzies habit of involving us in wars, four in total, with dubious legality, and for inviting the British government to test their nuclear weapons in Australia. Much time could have spent much time examining this disaster and the fact that Menzies had actually jointly funded this terrible process. And, of course, they would relish pointing out that this ‘long boom’ period was punctuated with ‘horror budgets’ in 1951 and 1956, and a severe ‘credit squeeze’ in 1960, designed to counter inflation, which had almost halved the pound's buying power.

Many would also claim that much of the good fortune of that period was more from good luck than good management - but perhaps that what politics is all about - managing luck. However, despite these arguments, this period was in most respects a golden age of postwar prosperity. Australia benefited  from its war-time manufacturing base to become one of the top 10 trading nations, industrial, manufacturing, and minerals development, soared as the world rebuilt after the war. Large scale sales of iron ore to Japan commenced. Purchasing power increased dramatically, and with it a sharp rise in living standards. Home-ownership rose from half to three-quarters of the population. Car ownership tripled, massive infrastructure projects, such as the Snowy Mountains Scheme, came on-stream. The CSIRO was expanded, the Mawson and Davis stations were established in Antarctica.

The Australian Atomic Energy Commission was set up and the Lucus Heights Nuclear reactor commenced operation, the Colombo plan was implemented and a new social safety-net was woven: pensioner medical services, child endowment, private medical insurance, the home-savings grants and state aid for non-government schools were all kicked into life. Annual factory production in Australia rose from £489 million in 1949 to £1843 million in 1959 and unemployment remained at around an incredibly low 2%. The price of wool skyrocketed to the point where it was said that Australia rode on the sheep's back. Government revenue was boosted by high taxes (by today's standard) and a raft of government owned enterprises, as well as high import duties that came from the trade protectionist policies of (Black) Jack McEwan. McEwan was Minister for Commerce & Agriculture, and later minister for Trade, and was the driving force on economic matters with policies that became known as “McEwenism,” that were more agrarian-socialistic than conservative.

In other words it was the very antithesis of today's Coalition government.

Now fast-forward to the present.

Unemployment has almost tripled according to official figures, youth unemployment is far higher and, when combined with underemployment, is 17%, higher again in the disadvantaged sector, among the indigenous, immigrants and the disabled. In the Menzies era one senator crossed the floor 150 times, another 130. Now it is a headline event when a member crosses the floor. There are 226 federal politicians, yet it seems not one of them is concerned enough about their parties' stand on the Great Barrier Reef to come out publicly against the multiple threats it faces. (Dr. Chris Davis recently resigned as assistant health minister in the Qld Government over his concerns on political donations and corruption.)

Home-ownership is becoming a distant dream. Only 6.8% of new housing went to first home buyers this year, compared to 34% in 2009. Of those who have bought houses, over 30% are classed as being in mortgage stress, and our private debt, largely from mortgages, is a staggering $1.8t and it has been growing at 2% per annum since 2008. This debt prevents many Australians from investing in local industries and hence our requirement for overseas investment with loss of potential earnings.

The number of Australians employed in manufacturing has dropped from 25% to 10% of the workforce since the 1960s. Prior to the last election the industry spokesperson, Sophie Mirabella, claimed that under Labor, there was one manufacturing job lost every 19 minutes. In fact it was 143,384 jobs lost between the start of 2008 and 2013.  Since that time, the losses have increased, with the decline of mining related activity and the car industry.

Funding to the CSIRO has been diminishing for some time. In terms of expenditure on research Australia ranks 18th out of 20 OECD countries. Australia's spending at 0.441 per cent of GDP in 2013 was ahead of only Greece at 0.391 and the Slovak Republic at 0.369. That year Japan's expenditure was 0.754 per cent, the US 0.795, and Germany 0.917% of GDP. Recently funding cuts to the CSIRO of $111m will see about 20% of staff laid off including 36 agricultural and biosecurity researchers at the infectious diseases health unit, which is our only facility capable of handling Ebola cases. Also made redundant from the CSIRO, is Dr. San Thang, who has been tipped to win a noble prize in Chemistry.  There is, perversely, an increase in spending on coal seam gas research, suggesting government intervention on research priorities.

Our record on education is worse. A report by the Organization for Economic Co-operation and Development (OECD), which looked at government funding of public education, ranked Australia second last, putting Australia among only a handful of countries where less than half the cost of tertiary education now comes from the public purse, with a higher than average amount directed at private schools. The report also singles out Australia for putting more costs onto university students, part of a policy of both governments which used full fee paying overseas students to bolster university funding. Overseas student numbers were bolstered by the linking of immigration with study, a process that led to the proliferation of “Mickey Mouse” courses and widespread cheating. Australia also has the highest proportion of international students, with 17.3 per cent of the campus population coming from abroad. In contrast, the US has just 3.4 per cent overseas students.

Almost all these students are full-fee paying. The figures underscore the degree to which Australian universities are hostage to the international student dollar.

The OECD also collects a wide range of data on government and private spending on social programs. Its latest report shows the Australian government's social expenditure (includes age pension, veterans' pension, disability support pension, unemployment benefits, study and carers' allowances, and other payments)  is 19.5 per cent of gross domestic product (GDP), which puts it at 13th in the OECD nations, behind even Greece, Portugal, Spain, and Italy, (28%) countries considered to have lower GDP growth than Australia. At 13th out of 96 countries, Australian seniors are well above the regional average on all health indicators, such as physical and psychological well-being, but ranked behind New Zealand, Canada, and the US, among others, because of by income security and environmental factors.

We also have the lowest ranking in the region (61st) for income security, which measures older people’s access to money and their capacity to spend it independently, and the highest old age poverty rate in the region (35.5 per cent), while our pension coverage (83 per cent) and welfare rates (65 per cent) are below average.

So what went wrong?