Читать книгу Lazarus Rising - John Howard - Страница 14

After 11 November I did not see or speak to Malcolm Fraser until the triumphant party meeting following his massive victory on 13 December 1975. The Coalition’s majority of 55 was by far the largest in Australia’s political history. There had been almost a clean sweep of seats in Queensland; only Bill Hayden’s Oxley was narrowly held by the Labor Party. Even the staunchly pro-Labor city of Canberra had returned a Liberal in one of its two seats.

It had been a bitter campaign, before a deeply polarised electorate. The 35 per cent who habitually voted Labor exhibited their hostility over the dismissal by heaping enormous personal invective on Sir John Kerr, and in this they were aided and abetted by Whitlam and his former ministers. The remainder of the electorate, consisting of habitual Coalition supporters and those in the middle, were grateful for the opportunity of voting out what they regarded as the most incompetent government Australia had had, at least since World War II.

Once an election had been called, debate about the merits or otherwise of the Governor-General’s actions receded into the background, except for those who would resentfully feed on this for the rest of their political lives. The election became a referendum on the performance of the Whitlam Government, and once this was the case, Fraser’s victory was assured.

Naturally Malcolm Fraser and Phillip Lynch were unanimously re-elected to their respective positions at the start of the Liberal Party meeting following our victory. It was an amazing gathering, full of elation, with a sizeable chunk of the party room comprised of people I had never met before. Not only were our ranks swollen by people who had won seats from Labor, but also by those replacing a number of former members who had retired voluntarily.

As a shadow minister, I had some hope of becoming a very junior minister in the new government. I guess, like all other shadow ministers, I had done all sorts of calculations in my head about my prospects, and I knew that Fraser wanted a smaller cabinet than the 32 or 33 which made up the shadow ministry. So I was not overly optimistic.

Just after the meeting ended, John Bourchier, the chief whip, said that the Prime Minister wanted to see me in his office, and I got the clear impression that Bourchier knew I was to become a minister. I felt a keen sense of anticipation and my best hopes were realised when, a short while later, in the Prime Minister’s office, Malcolm Fraser told me that he wanted me to become Minister for Business and Consumer Affairs. I was tremendously excited and couldn’t wait to tell Janette.

Whilst I thought that I had done a good job as a shadow minister, I knew that it was a fine judgement for a leader when choosing younger members in a new ministry. Malcolm Fraser and I have had our differences over the years and our relationship became very distant after I became Prime Minister, but I will always be grateful for the opportunity he gave me back in December 1975. It was a generous promotion at a critical time.

Business and Consumer Affairs was a new portfolio arrangement which brought together many of the business regulatory functions of the federal government, including responsibility for the Trade Practices Act, the Prices Justification Act, and the Industries Assistance Commission and also, potentially, for the national regulation of companies and securities. Also included was the Customs Bureau, of which the Narcotics Bureau, carrying the federal fight against drugs, was part. The business community applauded this new grouping of responsibilities. The cluster of duties I had been given attracted intense scrutiny from the business media.

The Fraser Government inherited a fragile economy. Inflation had soared to 14.4 per cent; unemployment stood at 5.4 per cent; the budget deficit had blown out to a projected 1.8 per cent of gross domestic product (GDP). Federal government spending had risen by a staggering 46 per cent over the two-year period of 1973–74. The Whitlam Government had been an incompetent economic manager; there was a near universal judgement that it would be a long time before Labor would again be trusted with the purse strings.

Most of the senior members of the incoming Government — Fraser, Lynch, Anthony, Sinclair, Nixon, Bob Cotton, Peacock and Greenwood — had been prominent in earlier Coalition governments, and were heirs of the Menzies years, which had been ones of stability and prosperity. They had been, also, years of government regulation, an inward-looking Australian economy, high levels of tariff protection and a centralised wage-fixation system. This regulatory, activist role for government had seemed to work during that time. There had been much activity and full employment. Why then should that approach be changed?

Maintenance of the status quo might have been justified if the world had not changed. The world, however, had changed quite dramatically in the early 1970s. The challenges for the Australian economy were quite different from what they had been previously; different responses were needed. The Whitlam Government had failed totally to realise this. The new Coalition Government would now have the opportunity of doing things differently, and better.

From the perspective of my portfolio responsibilities, I felt that we needed to restore business confidence by cutting government spending, pruning business regulation, providing more incentives for investment, and tackling some of the excesses of union power.

I appointed Paul McClintock, a Sydney lawyer and former president of the Liberal Club at the University of Sydney, as my principal private secretary. Paul had impressed me with his political courage in keeping the Liberal banner flying on a university campus during the early 1970s when, in the wake of debate over Vietnam and other issues, that was a particularly difficult task. Paul would later return when I was Prime Minister as head of the Cabinet Policy Unit.

Quite early, I established the Swanson Committee of Review into the Trade Practices Act. I wanted the act loosened and made more business-friendly; one of the reasons the Australian economy was performing badly was that too much red tape and regulation had been imposed on the business community. Malcolm Fraser strongly supported the review.

He did, however, backtrack on a promise to abolish the Prices Justification Tribunal. It was set up by Whitlam, and required large companies to obtain approval for price increases. It was impractical and a hindrance for business. Shortly after I became minister, Fraser rang and said it might be necessary to ‘give Hawke a win by going soft on our pre-election promise to get rid of the Prices Justification Tribunal'. Although it ran against our deregulatory thrust, I didn’t, at this early stage, question Fraser’s judgement, and we eased away from our commitment to abolish the tribunal. In those early months of government I believe that Malcolm Fraser thought that, with the odd gesture, he might win the grudging cooperation of the union movement.

At that time the Trade Practices Act penalised secondary boycotts by companies, but not by unions. I thought that this was a double standard, and therefore wrong. Unions were, for example, placing boycotts on petrol deliveries by certain tanker drivers, which forced up the price of petrol for some motorists. If a company did something like that it would be penalised, yet the unions were not.

I asked Thomas Swanson to look at this. Perhaps influenced by the conventional thinking, Swanson’s review did not recommend applying the secondary boycott law to unions. He did, however, suggest other changes which reduced the regulatory load on business, which we largely adopted. With Malcolm Fraser’s support I persuaded cabinet to bring unions within the secondary boycott reach of the Trade Practices Act, despite Swanson’s recommendation otherwise.

Thus was born what became Sections 45(D) and (E) of the Trade Practices Act, which imposed substantial penalties on unions similar to those for companies that engaged in secondary boycott conduct. It was removed from the Trade Practices Act for a period of time under the Keating Government, only to be returned to the legislation when I became Prime Minister. It survives to this day.

This was an historic change in the law affecting unions. It outraged the union leadership, particularly Bob Hawke. When the legislation was published I agreed to talk both to business groups and the unions regarding its provisions. At a meeting in Parliament House attended by Hawke as president of the Australian Council of Trade Unions (ACTU), as well as leaders of the public sector unions, Hawke glared at me across the committee room table and said, ‘If this goes through there will be blood in the streets.’ It was a nonsensical threat and one which was counterproductive. It confirmed my view that the proposal struck at the heart of the privileged position of the union movement, and I was more determined than ever that it should become law.

As Minister for Business and Consumer Affairs I had administrative responsibility for the Industries Assistance Commission. Tariff policy was, therefore, another issue I confronted. Up until then I had supported the prevailing orthodoxy.

This issue came to prominence after the Fraser Government, on 28 November 1976, devalued the Australian dollar by 17.5 per cent. Being a member of the economics committee of cabinet, I attended the cabinet discussion on devaluation. I strongly supported the decision, believing, as did Fraser, that Australian industry needed the competitive boost that the devaluation would confer on Australian exporters, because it would make their products cheaper on world markets. Likewise, it would help local manufacturers because the devaluation made imported products dearer and therefore less competitive.

It was that last point which brought in tariffs. Existing tariffs on imported goods already made them dearer for Australian consumers, therefore it was argued that unless some of those tariffs were cut following the devaluation, an unfair additional burden would be placed on consumers and importers. The contrary argument, which I supported, was that it would be self-defeating to reduce tariffs significantly, as one of the reasons for the devaluation had been to help local manufacturers.

Those who attacked our decision not to cut tariffs said that the higher prices of imported goods produced by devaluation would drive up inflation. This did not happen as fierce competition amongst retailers, in a still-recessed economy, meant that price increases were kept to a minimum.

In the early days of the Fraser Government, there was no stauncher high protectionist than Bob Hawke. He frequently invoked a cheap jibe against the Industries Assistance Commission, that it was really the Industries Assassination Commission. It would take the relative safety of government, and security in the knowledge that the Coalition opposition would support him, before Bob Hawke became a supporter of tariff reform.

Shortly after the devaluation, Fraser split the Treasury into two departments: Treasury and the Department of Finance. It made sense as Finance could focus more heavily on expenditure control. Fraser believed that Treasury had been responsible for a damaging press report of an earlier devaluation discussion in cabinet; this could have influenced at least the timing of his split of the Treasury. The circumstances provoked Treasury resentment, which was a pity because of the intrinsic worth of the change.

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Malcolm Fraser frequently encouraged me to appear in the media and talk generally on economic issues, provided that I kept in line with government policy. My profile received a huge boost when, following a Premiers’ Conference proposal, Fraser announced that there would be a price-wage freeze for a period of three months from 13 April 1977. The Prices Justification Tribunal was charged with monitoring the freeze. Whilst it had a certain popular, limited appeal, it was economically unrealistic and could not last long. I was put in charge of the freeze, not even knowing anything about it until the announcement was about to be made.

The public liked the idea because it appeared that the Government was ‘doing something’ about inflation. The serious media ridiculed the approach, whilst more popular media took an enormous interest in the issue. I had immediate contact with all of the major employer groups and for a period of time it looked, against all expectations, as if the proposal might do some good. After several weeks it was accepted that it could not be continued because of its longer-term unworkability. There is some evidence it may have had a short-lived constraining influence on some price increases.

In May 1977 Malcolm Fraser appointed me as Minister Assisting the Prime Minister, which involved helping with the PM’s correspondence and lower-order decision-making. I continued my full duties as Minister for Business and Consumer Affairs. It was a strong endorsement by the Prime Minister of the work that I had done there. I was happy with the promotion, but conscious of some resentment building amongst colleagues that my rise had been rather too rapid.

As a minister I worked closely with the National Country Party (later National Party) trio of Doug Anthony, Peter Nixon and Ian Sinclair. I liked them a lot. Anthony was strong and open, an ideal Deputy PM to Fraser. His languid, country style masked immense political shrewdness. Nixon was a tough political operator who defended country interests whilst recognising that electoral arithmetic was inexorably moving against his party. He gave me good early advice about being a minister. Sinclair was one of the most naturally gifted politicians I have known. He was intelligent, could absorb a brief rapidly — I don’t think that he read any submissions until after cabinet meetings had started — and was versatile and talented on his feet.

In July 1977 I paid my first overseas visit as a minister and, accompanied by Janette, visited Washington, London and Ottawa. There was a shock when I returned. Fraser told me that he intended to appoint me as Minister for Special Trade Negotiations, with a specific brief to spend as much time as possible in Europe trying to extract a better trade deal for Australian exporters, particularly farmers.

Earlier, when visiting Europe, the Prime Minister had a stormy session with the European Common Market chieftains, particularly Roy Jenkins, a former British Labour Chancellor of the Exchequer, with whom Fraser had clashed in a very heated fashion. He came back convinced that the only way we would make real progress would be, effectively, to have a resident minister in Europe banging on doors the entire time.

This was a novel concept, involving the creation of a new department. I was not enthusiastic about the appointment, because Janette was several months pregnant with our second child, and I knew that I would be away for lengthy periods of time. Also, I really enjoyed the job I had. But it was a promotion, and would give an international dimension to my ministerial experience.

I assembled a small task group; it could not realistically be described as a department. Philip Flood, whom I had met only a few weeks earlier when I visited Washington, became head of the group. After receiving numerous briefings and meeting industry groups, my team and I set out for Europe in September. For the next seven weeks we traipsed around various European capitals putting our case, railing against high levels of European protection, particularly for agriculture, and not making a great deal of progress. Thirty-three years on, the essential elements of the Common Agricultural Policy, the main protective mechanism for agriculture in Europe, remain in place.

Australian and New Zealand farmers have been given a raw deal by the Europeans. By any measure, our primary producers are extremely efficient and do not receive high levels of protection from their respective governments, particularly when compared with the hefty support given to farmers in Europe, Japan and the United States.

Before I left for Europe, Phillip Lynch had brought down, in August, the second budget of the Fraser Government. For reasons I was not to know then, this budget would have a very significant impact on my political career over the following two years. Surprisingly, the budget contained significant tax cuts. I did not think that the tax cuts were necessary, nor had I thought the budget could afford them, but they would be popular.

Unfortunately, the budget had other problems: the revenue estimates on which it was put together would begin to come apart in only a few months. I learned later that there had been quite an argument between Treasury and the Department of Prime Minister and Cabinet regarding the wages growth figure: Treasury had estimated 7 per cent, the Department of Prime Minister and Cabinet had said it could be as high as 7.5 per cent. The Budget Committee of Cabinet had opted for the higher figure; it produced more revenue, thus making the tax cuts more supportable. The Treasury estimate turned out to be more accurate.

Whilst I was in Europe, speculation grew that Fraser would call an election towards the end of 1977. There was a strong case for an election before 30 June 1978, otherwise the double-dissolution election of 1975 would oblige a separate half-Senate election well before the middle of 1978. Fraser’s thinking, no doubt, was that if there were to be an early election then it was better to have it at the end of the calendar year so as to restore the more normal pattern in Australian politics. The speculation was in full swing when I returned to Australia towards the end of October.

On 27 October 1977, Fraser announced an election for 10 December. It was to be the fourth general election in five years. A rather lacklustre campaign commenced. With the benefit of hindsight, the result of the election was never really going to be in doubt. There was no way that the Australian public was going to re-elect Gough Whitlam, having so totally banished him from office just two years earlier. On the other hand, however, there was a bit of suspicion about the early election, despite the strong reasons for having simultaneous elections for the two houses, and a lack of interest in the campaign. Until late in the piece, the opinion polls were very equivocal. There was the further complication of the Australian Democrats.

Some months earlier, Don Chipp had resigned from the Liberal Party and launched the Australian Democrats. He ran as somebody seeking to occupy the centre ground of Australian politics. Chipp had been a discontented soul since Fraser excluded him from the government he formed after the 1975 election. This was a major influence in his decision to form the Democrats. Don Chipp was an engaging personality who was a traditional ‘small l’ Liberal of the Victorian mould. Our worry was that the Democrats would rip votes from the Liberal Party and, through the preferential system, too many would wind up in Labor hands.