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Laboring under delusions about liberalism

By Chris Lewis - posted Friday, 19 November 2010


But again, Leigh is making an assumption about economic themes based on selective evidence rather than fair evaluation.

In reality, both Labor and Coalition governments have never accepted the absolute primacy of market forces, although government economic intervention has decreased in recent decades. In 2007-08, total measured assistance to industry by the Australian Government was still $17.5 billion in gross terms with the value of tariff assistance alone at $9.2 billion, mostly to manufacturing industries.

But the Liberal Party can claim liberal economic credentials against Labor in a number of ways, including in progressive terms.

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First, let us contrast the Liberal Party's recent attitude with Labor in regards to the allocation of public resources given that the former does place a greater emphasis upon individual responsibility and efficiency.

Take the public waste associated with various Rudd government economic stimulus packages. While Labor wasted $1 billion on the home insulation scheme alone, the then Coalition leader Malcolm Turnbull suggested a much smaller rebate of $500, increasing to $1000 subject to a means test. As events turned out, such an approach by the Coalition would have reduced the risk of fraud given that the government paid 100 per cent of the cost of the service to the contractor rather than encouraging the consumer to shop around and check for best practice..

And there was the Building the Education Revolution with considerable waste occurring. Again, the Coalition had argued that rather than committing $14 billion, $3 billion should be spent over three years with school communities telling the Government what they needed and applying for assistance. This would have also encouraged a degree of competition to ensure that buildings represented best value with higher priority given to most urgent school needs.

The Liberal Party's liberal economic credentials against Labor can also be historically evaluated in fiscal terms. With the Howard government achieving many budget surpluses and virtually eliminating Commonwealth debt, the Keating government achieved an average budget deficit of 3 per cent of GDP from 1991–92 to 1995-96 despite Commonwealth revenue increasing from 22.9 to 24.2 per cent of GDP at a time when Australia's GDP averaged 3.75 per cent growth from 1992–96.

As events turned out, the Howard government's determination to reduce public debt placed Labor in a much better position than most developed nations to address lower private sector economic activity in response to the 2008–09 economic crisis.

To conclude, Leigh's argument that Labor is more liberal (and progressive) than the Liberals is indeed complicated by the evidence. While I too can be accused of selective evidence, it just may be that any attempt to define progressive liberalism is subjective with Leigh's argument simply biased rather than offering a balanced summary of the Australian liberal democratic experience. What can be defined as liberal and progressive needs to take account of changing attitudes and policies in line with specific context of the day.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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