Hewson manifesto was ahead of its time

Yet Hewson's planned supply-side reforms (such as labour market deregulation) would have made the Reserve Bank's job of controlling inflation much easier by easing structural pressure on inflation. Unlike in the 80s and early 90s, Australia would no longer have needed a recession to achieve low inflation.

Assuming a Hewson-led government had succeeded in legislating a medium-term inflation target of 0 per cent to 2 per cent, the onus would have fallen on the governor and the board to explain any failure to deliver on the statutory mandate given to them by parliament. The newly transparent and accountable Reserve Bank would not have been in a position to defy the will of parliament.

In the years following the Coalition's 1993 election defeat, the Reserve Bank quietly moved in the direction of an informal inflation targeting regime. Its independence was finally made explicit and its inflation target formalised with the election of the Howard government in 1996.

Following the election of the Rudd government in 2007, the Reserve Bank adopted additional transparency measures and the present government has further entrenched the independence of the Reserve Bank governor.

Far from being a repudiation of Fightback, as Kelly suggests, subsequent developments have largely vindicated its vision for monetary policy reform.

The main point of difference between Fightback and today's inflation targeting regime is that Fightback sought a medium-term inflation target of 0 per cent to 2 per cent, rather than the 2 per cent to 3 per cent that now forms part of the Statement on the Conduct of Monetary Policy.

In this regard, Australia's inflation targeting regime remains internationally anomalous. Even NZ's revised 1 per cent to 3 per cent target has a lower midpoint than Australia's.

The 2.5 per cent average inflation rate considered a policy triumph in Australia would still be regarded as too high in countries such as the US.

Successive statements on the conduct of monetary policy have thus institutionalised a slightly higher average inflation rate than comparable developed countries, where price stability is still "universally conceded" to be in the range of 0per cent to 2per cent.

Little wonder, then, that Australia still has some of the developed world's highest nominal interest rates, a lasting legacy of Fightback's political defeat in 1993.