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Nick Richardson, “Modesty ablaze,” The Bulletin, April 30, 1996, pp. 48-49.

Last September, at a dinner in federal parliament before about 60 Coalition MPs and friends, former New Zealand finance minister Ruth Richardson made a presentation called “Freedom in action”. It detailed how necessary it has been to take drastic steps to lift New Zealand’s economic performance and included how Richardson had raised budget transparency and accountability.

The audience was impressed. But the select group of MPs had a fair idea of what they were getting when one of the number, the former political adviser to Malcolm Fraser and political scientist David Kemp, invited her to address them. The low-profile, predominantly “dry” group of Coalition MPs known as the society of modest members was already in broad sympathy with Richardson’s goals.

Within five months, a version of those goals would become part of the Coalition’s promise to the Australian electorate.

The modest members have been around since 1981, formed in recognition of C.R. “Bert” Kelly, a federal Liberal backbencher who extolled his then somewhat heretical anti-protectionism view in The Australian Financial Review under the byline of the The Modest Member, and later at The Bulletin and The Australian as The Modest Farmer. Kelly, now 84 and living in Adelaide, remains the patron of the society. The battle that he started was taken up by Liberals Jim Carlton, John Hyde and Peter Shack in the early 1980s and although the argument about tariffs has been settled, largely in line with Kelly’s view, winning government gives the new generation the opportunity to move on to other items on the dry agenda.

Unearthed: During the past few years in opposition, the society had unearthed some new champions, including Liberal senators Brian Gibson and Jim Short as well as Kemp. All three are now senior players in the new government: Gibson is parliamentary sectary to Treasurer Peter Costello, Short is assistant treasurer and Kemp is minister for schools as well as assisting Finance Minister John Fahey on privatisation. Costello and the deputy prime minister and National Party leader Tim Fischer are also members. The influence of the modest members is not too hard to assess.

Gibson, in particular, has a good working relationship with Costello, having been one of his parliamentary secretaries in opposition. A former chief executive of Australian Newsprint Mills and chairman of Tasmania’s Hydro Electric Commission, the 59-year-old Gibson has pushed for using accepted corporate practices for dealing with the budget. Last May, in a detailed submission to Costello, Gibson advocated the introduction of accrual accounting, a commission of audit to lay out mid-term economic priorities and a charter for budget honesty, which was a version of Richardson’s fiscal responsibility legislation. Soon after, during his first headland speech, Howard gave an undertaking to implement all three interrelated measures.

Under the proposals, the full picture of the government’s revenue, expenditure, assets and liabilities will be documented for every department using the same accounting method corporate Australia has used for years. The Audit Commission will report back to the government in June and is expected to recommend where some budget cuts can be made. It will also look at potential areas of fiscal responsibility legislation that could be included in a charter for budget honesty. The charter will include a pre-election statement on the budgetary position but it may also impose broader reporting responsibilities on the government and the establishment of long-term budgetary objectives. The New Zealand act also lays down “responsible fiscal management” principles for the government to follow, such as reducing debt.

In the scheme of election promises, the charter of budget honesty was probably well down the list of voter appeal. But the modest members now have a voice and it seems to be getting louder. “It’s the gravitational force out there,” says one.

Mindset: The society grew out of a need to provide moral support for those MPs in federal or state parliament who spoke against the prevailing political and economic mindset. There are still state MPs who count themselves as members and former NSW premier Nick Greiner as considered one of the faithful, even if he did not formally belong. The membership list also includes current industrial relations minister Peter Reith, National Party senator David Brownhill, South Australian Liberal senator Grant Chapman and Victorian Liberal senator Rod Kemp. There are about 40 federal MPs who count themselves as modest members, but the numbers are likely to swell with the influx of 28 new Coalition MPs this month.

One of the society’s leading figures, John Hyde, believes that the society has changed. The protectionism demon, for example, has been slain. “The organisation began as a support for those who were courageous and correct … there’s more proselytising now,” he says.

Being in government provides the society with the opportunity to advance its causes, Hyde says, “Modest members didn’t have a lot of influence in opposition,” he says. Or so it seemed. In retrospect, the society and especially Gibson were industriously pushing a new view of government financial responsibility.

In November 1994, seven members of the federal parliament bi-partisan Public Accounts Committee were invited to New Zealand for a week to look at the changes that Jim Bolger’s National Party had implemented, including the Richardson reforms. Gibson, who is on the PAC, had only a vague idea of the details of the reforms but the trip convinced him that they were worthwhile. Less than a year later the PAC had established an inquiry to look at the commonwealth’s financial reporting, following on in part from former finance minister Ralph Willis’ announcement in 1992 that commonwealth agencies would use accrual accounting for the first time in 1994-5.

The morning after Richardson had spoken to the modest members, she made a similar presentation to the PAC. When the PAC’s report, sub-titled “Towards greater transparency and accountability”, was released in November, it endorsed the adoption of accrual accounting, or “whole of government” reporting, but stopped short of supporting fiscal responsibility legislation. The Labor-majority committee decided that the New Zealand model was inappropriate and recommended instead fiscal reporting legislation. “In the model of fiscal responsibility legislation envisaged by the committee, the transparency of fiscal reports — and the informed debate these reports will generate — will be the real discipline on the fiscal performance of the government of the day,” the report said.

Cost: Labor members of of the committee were concerned about the social cost of the New Zealand legislation because it may have led to cutting government programs in search of a balanced budget. Key sections of the federal bureaucracy were also sceptical. Finance secretary Steve Sedgwick told the PAC: “New Zealand introduced the legislation because they faced a particular set of circumstances. They were in really big trouble … They begain in circumstances that were rather more desperate than ours.”

But Richardson sees no reason why Australia should not follow her lead. “The model has to represent a very attractive option for a new government,” she says. “There is economic appeal and the high moral ground.” She points out the Australian election campaign debate about the true extent of the budget deficit would not have occurred under her legislation because it would have had to have been divulged before the campaign. “The legislation moves the debate away from short-term-ism to the medium or longer-term frame,” she says. “It changes the nature of the political debate.”

It also has some quantifiable benefits, according to Richardson. Earlier this year, Bolger was able to promise $2 billion tax cuts to New Zealanders over the next two years on the basis of regular surpluses derived from widespread economic reform.

Hyde says the modest members’ current preoccupation with financial accounting is in keeping with the society’s traditional priorities. “We used to speak of fiscal and economic rectitude, but we never contemplated anything like Richardson introduced in New Zealand. To have a government forced to be honest, like a corporation, is pretty radical,” he says.

Gibson does not believe that the government’s proposals necessarily indicate that modest members are becoming more influential. “It’s a fairly informal and friendly group … to get people thinking,” he says. “I doubt if it’s going to be a major influence [on government policy].”

Kelly firmly believes that, regardless of the extent of its influence, the society has a role to play. “There’s always a need for someone to tell people what they don’t want to hear,” he says. “You need it in any government and in any party.” Almost 20 years after Kelly lost his seat, the modest members may become the voice of the faithful rather than the sound of the heretics.

(in order of appearance on Economics.org.au)
  1. Bert Kelly on his journalism
  2. Move for a body of Modest Members
  3. Modest Members Association
  4. Bert Kelly's Maiden Parliamentary Speech
  5. Government Intervention
  6. 1976 Monday Conference transcript featuring Bert Kelly
  7. Bert Kelly, Hayek and Mencken on the virtues of farmers
  8. Sound economics calls for quiet from government
  9. Petrol for Farmers
  10. Some Sacred Cows
  11. Experiences in Parliament
  12. Spending your Money
  13. Is Taxmania a politician fetish?
  14. How Bert Kelly repays a free feed
  15. Modest column #898
  16. Chicken-hearted feathered friends strange bedfellows on a feather bed?
  17. Who needs literary licence?
  18. A touch of Fred's anarchy
  19. Helping the farmers help themselves
  20. Standing on the shoulders of the downtrodden
  21. Supply and Demand
  22. Bert Kelly responds to claims he is arrogant and uncredentialed
  23. Politics: it's a very confusing business
  24. The best featherbeds run on rails
  25. Bert Kelly on Disaster Relief
  26. Bert Kelly Wants to Secede
  27. Blinded by their tears
  28. Anti-freedom pro-tobacco industry lobby harmed Australia
  29. Under Labor, is working hard foolish?
  30. An Idiot's Guide to Interventionism
  31. Is free healthcare worthless?
  32. Can government kiss it better?
  33. Bert Kelly Destroys the Side Benefits Argument for Government
  34. Bert Kelly gets his head around big-headed bird-brained politics
  35. First Modest Member (Bert Kelly) AFR Column
  36. Second Modest Member (Bert Kelly) AFR Column
  37. Third Modest Member (Bert Kelly) AFR Column
  38. Fourth Modest Member (Bert Kelly) AFR Column
  39. Fifth Modest Member (Bert Kelly) AFR Column
  40. Sixth Modest Member (Bert Kelly) AFR Column
  41. Bert Kelly on the 2011 Budget and Australia's Pathetic Journalists and Politicians
  42. Bert Kelly, Bastard or Simple Sod?
  43. Liberal Backbencher Hits Govt. Over Import Restrictions
  44. Bert Kelly feels a dam coming on at each election
  45. Bert Kelly Enters Parliament
  46. Why take in one another's washing?
  47. Bert Kelly breaks the law, disrespects government and enjoys it
  48. Gillard's galley-powered waterskiing
  49. State Premiers are always asking for more taxing powers
  50. Can price control really work?
  51. Should we put up with socialism?
  52. We're quick to get sick of socialism
  53. Time the protection racket ended
  54. Can't pull the wool over Farmer Fred
  55. People not Politics
  56. Bert Kelly admits he should have had less faith in politicians
  57. The inspirational incentivising Dear Leader Gough Whitlam
  58. Labor: a girl who couldn't say no
  59. Why leading businessmen carry black briefcases
  60. Ludwig von Mises on page 3 of AFR
  61. Bert Kelly's empowering feminism
  62. Mavis wants the Modest Member to dedicate his book to her
  63. What if the whole country is swindled?
  64. Moss Cass: "Flood plains are for floods"
  65. A worm's eye view
  66. Eccles returns to haunt us
  67. How to grip a politician's ear
  68. It's hard to digest this economic cake
  69. Time to Butcher "Aussie Beef"
  70. Cold water on government-instigated irrigation schemes
  71. Hooray for Ord River Dam!
  72. Tariffs paid by exporters
  73. The problem of principles v popularity
  74. If you support State Quotas, where will your logic take you?
  75. Against guidance by government
  76. A socialist in Liberal clothing
  77. Never ask the government to help
  78. Don't listen to economists!
  79. Whitlam's July 1973 25% tariff cut
  80. Bert Kelly on Import Quotas
  81. Good directions when government backseat driving, like reversing down wrong side of road
  82. Barriers to imports are barriers to exports
  83. Bert Kelly reviews The War Diaries of Weary Dunlop
  84. Bert Kelly reviews We Were There
  85. Tariffs get the fork-tongue treatment
  86. Bert Kelly reduces government to its absurdities
  87. Politician sacrifices his ... honesty
  88. It's all a matter of principle
  89. Bert Kelly Destroys the Infant Industry Argument
  90. Bert Kelly Untangles Tariff Torment
  91. Bert Kelly resorts to prayer
  92. Eccles keeps our nose hard down on the tariff grindstone
  93. "Don't you believe in protecting us against imports from cheap labour countries?"
  94. Even if lucky, we needn't be stupid
  95. Great "freedom of choice" mystery
  96. Small government's growth problem
  97. I like my kind acts to get a mention in the press
  98. A Modest Member rakes the embers
  99. Tariffs Introduced
  100. More About Tariffs
  101. Sacred cow kicker into print
  102. Bert Kelly's 1984 two-article quote-collection on Aboriginal policies
  103. Modest Member must not give up
  104. Traditional Wheat Farming is Our Birthright and Heritage and Must be Protected!
  105. Tariff-cut nonsense lives on
  106. Bert Kelly brilliantly defends "theoretical academics"
  107. The high cost of protection
  108. Generosity creates problems
  109. The Society of Modest Members
  110. John Hyde's illogical, soft, complicated, unfocussed and unsuccessful attempt to communicate why he defends markets
  111. Modesty ablaze
  112. Case for ministers staying home
  113. The unusual self-evident simplicity of the Modest Members Society
  114. Animal lib the new scourge of the bush
  115. The Association for the Prevention of Cruelty to Krill
  116. modest members society
  117. Repeal economic laws, force people to buy new cars and enforce tariffs against overseas tennis players
  118. Thoughts on how to kill dinosaurs
  119. Let's try the chill winds
  120. Taking the Right's road
  121. Bert Kelly: "I did not try often or hard enough"
  122. Bert Kelly "lacked ... guts and wisdom"
  123. A look at life without tariffs
  124. The Gospel according to Bert
  125. Tiny note on Bert Kelly's column in The Bulletin in 1985
  126. Why costs can't be guaranteed
  127. Hitting out with a halo
  128. Paying farmers not to grow crops will save on subsidies, revenge tariffs, etc
  129. "The Modest Farmer joins us" | "How The Modest Farmer came to be"
  130. Bert Kelly Destroys the Freeloading Justifies Government Argument
  131. Industrial Relations Club shovellers
  132. From Shann to Stone
  133. Government Intervention
    vs
    Government Interference
  134. A sojourn in the real world
  135. The tariff wind swings
  136. Bigger Cake = Bigger Slices
  137. Bert Kelly on the Political Process
  138. A charabanc called protection
  139. Taken for a ride - to nowhere
  140. Down hill, in circles, all the way
  141. Relationships with the Liberal Party
  142. Tariffs = High Prices + World War
  143. Bert Kelly's Family History
  144. Bert Kelly's Pre-Parliament Life
  145. What the MP could say to the Bishop
  146. Why Bert Kelly was not even more publicly outspoken
  147. WEATHER IS USUALLY UNUSUAL
  148. How to stand aside when it's time to be counted
  149. How the Modest Member went back to being a Modest Farmer
  150. My pearls of wisdom were dull beyond belief
  151. Bert Kelly on Political Football
  152. Undigested morsels in Fraser spew
  153. Bert Kelly on LSD
  154. Bert Kelly reflects on the Australian car industry in 1992
  155. Bert Kelly wants reprinted Shann's Economic History of Australia
  156. If tariffs are opposed here then why not there?
  157. The emperor has no textiles, clothing and footwear sense
  158. Ross Gittins Wins Bert Kelly Award
  159. Interesting 1964 Bert Kelly speech: he says he is not a free trader and that he supports protection!
  160. This is the wall the Right built
  161. Tariff Protection in Australia (1970)
  162. Has Santa socked it to car makers?
  163. Is the Budget a cargo cult?
  164. Will we end up subsidising one another?
  165. Keeping the bucket of worms alive
  166. Can we get off the stomach-churning head-spinning tariff merry-go-round?
  167. Do we want our money to fly?
  168. Can a bear be sure of a feed?
  169. How to impress your MP -
    ambush him
  170. The time for being nice to our MPs has gone ...
  171. Don't feel sorry for him -
    hang on to his ear
  172. Trade wars can easily end up on a battlefield
  173. Tariffs Create Unemployment
  174. Bert Kelly recommends Ayn Rand
  175. Bert Kelly on Alf Rattigan's Industry Assistance: The Inside Story
  176. Bert Kelly's Satirical Prophecy: Minister for Meteorology (tick) and High Protectionist Policies to Result in War Yet Again (?)
  177. Bert Kelly in 1972 on Foreign Ownership of Australian Farmland and Warren Truss, Barnaby Joyce and Bill Heffernan in 2012
  178. Bert Kelly baits Welfare State Tiger
  179. Why does Govt wear two faces?
  180. Parliament a place for pragmatists
  181. Of Sugar Wells and Think-Tanks
  182. Bert Kelly: "I must take some of the blame"
  183. Bert Kelly on dumping duties
  184. The Govt's helping hand often hurts
  185. Unbuckling the hobbles on the motor industry
  186. A Modest Farmer looks at the Problems of Structural Change
  187. Government Fails Spectacularly
  188. Know your proper place if you want the quiet life
  189. Bert Kelly on political speech writers
  190. Having your cake and eating it
  191. Perish the thawed!
  192. Hooray for Northern Development!
  193. The silly image of our MPs
  194. Bert Kelly Question Time highlights
  195. Modest Farmer sees his ideas take hold
  196. Should facts stand in the way of a good story?
  197. Fondling one another's glass haloes
  198. What is the sense in making the effort to look after yourself?
  199. Fred's Feeling: Counterpatriotic country contrarian
  200. Handouts for big boys only
  201. Mavis trying to buy a hand loom
  202. Bad news for bearers of bad news
  203. Is it time to get aboard the tariff band-waggon?
  204. Why farmers resent tariff protection for motor makers
  205. A sordid use of scare tactics
  206. Goods vs services
  207. Tariffs are hilariously counterproductive
  208. Bert Kelly on decentralisation
  209. Inflation breeds moral decay
  210. Who envies equality?
  211. Growth – malignant or benign?
  212. Government wiser than Magna Carta
  213. Bert Kelly on looking to politicians for moral leadership
  214. Max Newton: Maverick in Exile
  215. Whitlam & co on the Dismissal
  216. 25% Tariff Cut
  217. Bert Kelly on pensions
  218. Mr Clunies-Ross of the Cocos Islands should rule Australia
  219. They get the wind up when it changes
  220. Why the Big Green Lie survives
  221. Ross McLean in 1982: "Malcolm! Why don't we try good government? It might be popular."
  222. Bert Kelly on the importance of exchange rate movements
  223. Bert Kelly shows how to attack
  224. Bert Kelly vs Bert Kelly vs Bert Kelly
  225. Industrial relations dinosaur, Bruce, chews his cud
  226. Hooray for "firmly entrenched"!
  227. Respect your dinosaurs
  228. What if something is "deeply ingrained" yet harmful?
  229. A case for ministerial inertia
  230. Why politicians don't like the truth
  231. Our great open spaces
  232. Ominous dark clouds are gathering
  233. Better to be popular than right
  234. Crying in the wilderness
  235. Ivory tower needs thumping
  236. Bert Kelly asks, "How can you believe in free enterprise and government intervention at the same time?"
  237. Politicians get undeserved praise, why not undeserved blame too?
  238. Feet in a bucket of champagne
  239. Rural Problems
  240. Health cover needs a $30 excess clause
  241. Unholy state of taxation
  242. Boring economics worth a smile
  243. The Libido for the Miserable
  244. Agricultural Development and Tariffs
  245. Fred's too poor to have principles
  246. Eccles Law of the constant wage share
  247. "He whom the gods would destroy ..."
  248. Tariffs: when to wean infant BHP?
  249. Keep any government as far as possible from farming
  250. The Playford charade is out of date
  251. Bert Kelly: the odd man out who's now in
  252. Dries must resist giving up struggle as going gets tough
  253. How a well meaning Government can be so stupid
  254. The icing on the economic cake
  255. Sir Roderick Carnegie's foreword to Bert Kelly's Economics Made Easy
  256. The Vale of Popularity and the Protection Procession
  257. Politics 101: Pay Lip Service to Capitalism and Shoot the Messenger
  258. Bert Kelly makes politicians eat their own words on tariffs, then says, "We cannot be blamed for treating the statements of our statesmen with cynical contempt"
  259. Bert Kelly on Free Enterprise
  260. Cartoons of protected industry, the welfare teat and the nanny state
  261. Bert Kelly on the theory of constant shares and the Fabian Society
  262. Bert Kelly vs Doug Anthony
  263. You're lucky if you escape being helped by government
  264. Bert Kelly on Small Farmers
  265. Bert Kelly on Apathy
  266. Bert Kelly in 1967 on "problems of government and things like that"
  267. The last "Dave's Diary"
  268. Bert Kelly vs The Australian on tariffs in 1977
  269. Bounties or Tariffs, Someone Pays
  270. Geriatric companies without a minder
  271. A free marketeer wary of free trade
  272. Nixon's puzzling profession of faith
  273. "Ford ... seems to spend more time bending its knees than its back"
  274. Clyde Cameron's weak ways with wise words
  275. Why flaunt what others flout?
  276. Bert Kelly yearns for Tim Flannery's powers of prediction
  277. Looking after yourself is silly
  278. Bert Kelly masterpiece on drought, fire, flood and other natural disaster relief schemes
  279. Government can take credit for our car industry mess
  280. Car makers want the 4wd driven deeper into tariff bog
  281. Why our MP is no longer prone to a good sob story
  282. Auto industry is in a straitjacket
  283. Bert Kelly on market predictions
  284. Why should dryland farmers subsidise irrigation farmers?
  285. How much should government decrease incentive for independence from government?
  286. Clarkson crowned Deputy Government Whip
  287. Bert Kelly to blame for soaring government healthcare costs
  288. 1959 return of Dave's Diary
  289. Bert Kelly in 1966 on developing northern Australia
  290. Successful government intervention can [sic] occur
  291. Vernon Report upholds Clarkson
  292. Quiet Man Makes An Impact
  293. Should it be compulsory to buy footwear and clothing?
  294. To save Australian clothing industry women must all wear same uniform
  295. Don't confuse plucking heart strings with plucking harp strings
  296. Speech only for public
  297. Catchy Tariff Circus Extravaganza
  298. Bert Kelly in 1985 on cars yet again
  299. Hurrah for the Gang of Five
  300. Thoughts on a verse about Balfour
  301. Bert Kelly pep talk to politicians
  302. Government intervention = Agony postponed but death brought nearer
  303. Recipe for disaster: Freeze!
  304. Recipe for government intervention: Gather winners and scatter losers
  305. Recipe for industry destruction: Blanket market signals
  306. Mavis writes!
  307. Bert Kelly's empiricism is not kneejerk reaction kind
  308. The $2,000 song of the shirt worker
  309. Subsiding only small farmers means subsiding the big banks
  310. Difficult to be fast on your feet when you've got your ear to the ground
  311. It would surprise people to see how sensible MPs behave if they think they are not being watched
  312. Bert Kelly on "this land of limitless resources" and "great open spaces"
  313. Growing bananas at the South Pole
  314. Car components tariff protection under fire
  315. Why carry a $300m car subsidy?
  316. Tariff feather beds for the foreign giants
  317. Bert Kelly says end compulsory voting to stop donkey vote
  318. Perhaps being smart and insured isn't all luck
  319. You gets your tariff, you pays a price
  320. More funds to train Olympians?
  321. Fire in their guts and wind in ours
  322. Should free universal healthcare include pets?
  323. Sound advice from a modest farmer
  324. A tottering monument to intervention
  325. Cunning meets wisdom
  326. Competition, Aussie-style: Who's the bigger parasite?
  327. Australians are proud patriotic parasites, says Bert Kelly
  328. Taxpayer-funded sport is cheating
  329. Being loved by all is not always a good thing
  330. Welfare State Destroys Society
  331. 1980 Bert Kelly feather bed series
  332. The White Mice Marketing Board
  333. Government intervention and advice can be harmful, even when right, even for those it tries to help
  334. One small step on the compulsory voting landmine
  335. The free & compulsory education sacred cows have no clothes
  336. Holding a loaded wallet to an economist's head
  337. Political No Man's Land
  338. Only blind greed demands both equality and prosperity
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