Australian Politics and Society
The Colossus of Cabramatta – Part Two
Myth # 2: “Gough stuffed the economy, blew the budget, and made a mess of the joint” (The Liberals)
The Liberals love this one. Only the last part of it is even remotely true. Gough’s major downfall was trying to achieve too much too soon. After 23 years in opposition, having missed the global tide of left-wing reform in the 1960s, Gough and the ALP had a truckload of ideas they were aching to unleash.
Unfortunately, it doesn’t matter how long you’ve waited. No government is capable of focusing on more than a handful of key policies at once. The ALP learned from this mistake – the Hawke-Keating years were a succession of drastic, much needed economic reforms, spread out over the course of thirteen years. Gough tried to squeeze in the lot in three, and the government collapsed under the confusion and turmoil.
But that’s as far as it goes. Gough did not “stuff the economy” – Nixon and OPEC did. The United States president dismantled the Bretton-Woods monetary system in 1971. Those countries that had used it as the replacement for the previous “gold standard”, including Australia, saw inflation skyrocket. Two years later, the entire global economy was plunged into chaos and disorder after the Arab oil crisis of 1973, bringing an end to almost two decades of unbroken, unprecedented growth. The “Golden Years” had passed us, and the ALP missed the boat by sitting on the opposition benches the entire time.
Much like James Scullin, who came to power two days before the infamous Wall Street Crash of 1929, and was turfed from office two years later as the Depression tore us apart, Gough was a victim of rotten timing. There was bugger-all any Australian could, should, or would have done to properly prepare us for the economic earthquake that would shock the world into a new age.
For his part, Gough stayed staunch, and tried to keep us on our steady new course while the economic winds went out of our sails. In the end, the country jumped ship, blaming him for the miserable weather.
The idea that Gough “blew out the budget” is even more laughable. This myth is passed around in conservative circles as proof of the Coalition’s superior management skills, particularly Howard’s. It is an outright lie. The Whitlam government delivered a budget surplus every year it was in power.
Moreover, the Fraser government that defeated Whitlam in 1975 went on to deliver seven consecutive budget deficits. With nothing to show for it. And who was treasurer overseeing this obscene waste of taxpayer dollars? Who held the key to the nation’s piggy bank, signed the cheques, and left us with a debt hangover that lasted for a generation? None other than the Liberal grand master himself, the self-proclaimed “fiscal conservative”, John Winston Howard.
The Fraser/Howard duo inherited zero government debt from the Whitlam government. Zero. By 1983, Howard had blown the budget out to $40 billion. And for all this spending, nothing was achieved – in fact, we went a hundred miles an hour in reverse. Howard and Fraser went on a warpath to undo almost everything achieved during the Whitlam years, and left us with nothing more than double-digit inflation, double-digit interest rates, double-digit unemployment, an “inward-looking, moribund, industrial graveyard”, and a $40 billion dollar debt that refused to die until Howard sold Telstra off decades later to recoup the losses.
Whitlam spent within his government’s means, and he spent it on priceless investments – free tertiary education and universal health care are just a few. While we now shackle our governments’ spending according to the gospel of “fiscal conservatism”, we would do well to remember an age when spending was seen for what it really is – an investment. No different to a mortgage, private school tuition, share portfolio, health insurance, vocational course, university degree, and so on. Consider all these private, personal sacrifices we make in our lives that pay off in the long run. Now consider them on a national scale. Organised, targeted, and accessible to all, elevating this country to its true potential.
Such was the Whitlam dream.
Tomorrow… Myth # 3 – “The dismissal was a constitutional crime, a grievous injustice, and a vicious attack on our entire democracy”