David Barnett, The Bulletin, July 12, 1988, pp. 32-35.
David Barnett analyses Australia’s intellectual right and tells how the Hawke government has hijacked many of its ideas.
The intellectual resurgence of the Right as it developed in Australia since the defeat of the Fraser government and in Britain and the US under the Thatcher and Reagan administrations, respectively, has been a godsend to the Hawke government.
Prime Minister Bob Hawke, Treasurer Paul Keating and the ministry conjured up a political bogeyman out of the New Right.
They used the tactic in parliament, so effectively that advisers urged Opposition leader John Howard to avoid being identified with the intellectual forces which had carried him to the leadership of the Liberal party.
That uncertainty in the Opposition parties about their directions and the difficulties which developed in the formulation of policy were crucial to the Australian Labor Party’s re-election strategy last year.
The Opposition parties did provide most of their own mess. They produced a rogue premier (Sir Johannes Bjelke-Petersen) bent on a conservative Gotterdammerung, and the White Shoe Brigade on the Gold Coast. Leading figures in the business and rural community, such as Ian McLachlan of the National Farmers’ Federation, Andrew Hay of the Australian Chamber of Commerce and then-Liberal Party treasurer John Elliott seemed at times to have their own political ambitions uppermost in their minds.
They produced public divisions within the Liberal Party between the Wets — representing traditional Liberal practice of identifying concerns within the community and taking them up — and the Dries who argued for a new ideological free-market framework admitting of no compromise with Marxist concepts of national economic planning.
Bjelke-Petersen had been a New Right role model. He took on a union in an essential service and beat it, transforming the operations of the South-East Queensland Electricity Board. So was NFF president McLachlan who took on a union in the Northern Territory’s Midginberri Abattoir dispute and beat it. Hay was one of those figures who provided support in the Dollar Sweets dispute in Melbourne when another left-wing union was beaten. The government did not have to do much else other than to seize the opportunity which came along about the middle of last year as the mess was boiled up.
The strategy was simple: seek to create in the public mind an image of the New Right as a grab-bag of every anti-Labor organisation in the country; identify what was essentially an intellectual reassessment of directions by politicians and academics with such shadowy organisations as the League of Rights, which has no national respresentations in Canberra but which troubles the National Party in rural NSW and Queensland and which seems to have an anti-Semitic tinge.
With the elections safely out of the way, Keating produced his master-stroke. He balanced the budget. Only National Party leader Ian Sinclair had spoken during the campaign about a balanced budget and said it almost incidentally, letting the issue rest, so nobody noticed.
Yet fiscal restraint was the cornerstone of the economic advice which the Intellectual Right was producing. Its spokesman had put deficit financing on trial, amassed the evidence in terms of rising inflation, rising interest rates, galloping debt and chronic unemployment — and reached a verdict of guilty.
Keating had contemplated announcing during the campaign that he would bring down a balanced budget a month later, after the elections, and decided against it. But, once the elections were over, he moved rapidly to execute the sentence on 30 years of budget deficits.
The government had damned the Liberal and National coalition for being “New Right” and then pinched its agenda. The May 25 economic statement took the process a gigantic step further. The Hawke government is committed to the progressive reduction of tariff protection, a process which must work primarily to bear down on wages.
It reduced company tax by 10 percent and must bring income tax down to the same level in due course. It has shifted the burden of taxation further down the scale which is a user pays principle of government services which the Right had not dared articulate.
It will make students pay for their education. Members of the government, such as Industry Minister John Button, would like to see the uranium industry expanded. It even wants to sell of government enterprises, such as Australian Airlines and Qantas.
Finance Minister Peter Walsh produced an interesting pure New Right argument recalling the protracted British coal strike of 1984 which, he said, had taken Britain to the brink of civil war. If the mines had not been nationalised, if they had remained in private ownership or been “privatised”, uneconomic mines would have been closed as their profitability declined.
It would not then have been necessary for the Thatcher government to have taken the decision to close uneconomic pits and there would have been no national strike.
The enormous political irony of the New Right phenomenon is the way in which the government used it as a spectre to scare the electorate and then, with its own policy-making institutions failing to produce the recipes for the times, has used the prescriptions of the Intellectual Right to tackle the economic problems facing the country. It has left the Opposition with very little to say.
Unspectacular but influential
Bert Kelly, CMG, did not have a spectacular parliamentary career. Elected to the South Australian rural seat of Wakefield in 1958, he made it into ministry in 1967 with Works. Then followed Navy, in 1968 and 1969, until he fell victim to one of the Royal Australian Navy’s many fine traditions. “After each collision, they get a new minister,” he told us at his valedictory dinner.
So he plodded on in parliament until 1977, then retired. Quite nondescript but one of the main political influences in Australian history. For Bert Kelly had a bee in his bonnet. He was, throughout his political career, a free trader and he remains one, as he reaffirmed when some 350 of Australia’s most distinguished citizens turned up in the great hall of the Victorian Arts Centre to pay their tributes. The invitations had gone out from Sir James Balderstone, Sir James Foots, Sir Arvi Parbo and John Ralph.
Sir Samuel Burston was there and so, too, were Sir Rupert Clarke, Sir Ian McLennan, Sir Eric Neal, Sir Bruce Watson, Sir Harold Young and a whole host of others: industrialists such as Brian Loton, professors such as Michael Porter and Fred Gruen, politicians past and present including Jim Carlton and John Hyde. Senator John Stone, would could not make it, paid tribute in his telegram to Kelly’s “gigantic contribution to public life”. Said Stone: “Your career has been and will remain an example to everyone who believes in the power of ideas.”
When Kelly got home after being sacked, he started writing a column over the nom de plume if a “Modest Member of Parliament”. Between November 26, 1969, and May 25, 1987, he wrote 898 of them. Some might suggest that he never got far from one central theme, the virtues of free trade and the deleterious effects of tariffs and other forms of industry support. Never mind, the columns always had a freshness. Nobody else was saying this sort of thing in those days.
In the early ’60s, Kelly had sought an active role. He had, for instance, been a member of the Basic Industries Group which questioned the protectionist course on which Country Party leader Jack McEwen was taking the government. But it was as a voice and as a symbol, The Modest Member, that Kelly exerted his influence. One important follower was John Hyde, for whom Kelly was a prophet-like figure.
Kelly wrote whimsically in the form of a dialogue with his wife “Mavis” (Mrs Kelly’s name is Lorna) and one “Eccles” who put the arguments of an academic collaborator. Kelly portrayed Prime Minister Malcolm Fraser in one of his columns as King Canute — implementing protectionist measures on behalf of the textile, clothing and footwear industries and vainly ordering the tide of employment in the industry not to go out (as it did, from 162,200 to 116,400 over five years).
Hyde was more of an activist, becoming the focus of a group of back-benchers which included Carlton, Murray Sainsbury and Peter Shack. They would meet in Carlton’s room for tea because the sun came in during the morning and late at night drop in on another youthful kindred spirit, John Howard, who was Treasurer. Hyde and Carlton formed “Crossroads”, a discussion group, holding seminars once or twice a year in the early 1980s. In 1982, Hyde’s ever-growing backbench group dissented strongly from the guarantee which Fraser gave motor manufacturers of 80 percent of the domestic market. Their statement of dissent was signed by 34 backbenchers and Hyde believes that, had he added his name, Andrew Peacock would have won his 1982 challenge to Fraser. In setting up the Campbell committee to survey the Australian financial system, Howard guaranteed the result by choosing his personnel carefully. When they duly delivered their uncompromising free enterprise report, Howard manipulated its release to ensure it was not strangled at birth by a prime minister who regarded the whole thing with distaste.
Open revolt flared again during preparations for the 1982-83 budget, which Hyde considered irresponsible and which he publicly condemned. Although he strongly advised Howard not to resign, Hyde still agonises over whether his advice was correct. The coalition went out of office in 1983 and Hyde lost his seat. He set up the Australian Institute for Public Policy in Perth, one of the radical conservative think-tanks which flourish also in Sydney and Melbourne.
There is argument in both the Liberal and National parties about means but little disagreement nowadays about ends. They are those proclaimed for more than 20 years by Kelly. The Labor government continues to argue about ends but has given formal notice of the end of the two-airline agreement, taken first steps towards dismantling protection for the car industry and adopted the main recommendations of the Campbell committee — freeing the currency, removing exchange controls and deregulating interest rates. Nor does it stop there. Just as much as the valedictory dinner, the government’s structural adjustment committee of cabinet is a tribute to the Modest Member.
Kelly did not talk about microeconomics, which is a term only recently arrived in political usage, but that is what his columns were about: the effect on economic health of decisions on labour costs, industry protection, tariff levels and bounties. The government — having discovered that the big decisions on expenditure, interest rates and the value of the currency can take you only so far — looked hard at tariffs and at industry protection through the committee as part of its preparation for the May 25 mini-budget.
For the past century, the Left has had a dominating role in the intellectual life of European societies and drawn the middle class into the Marxist parties across the spectrum from communist to socialist, social democrat and Labor. In the ’50s — when Hawke and Fraser were students — the Right had Professor Karl Popper, author of The Open Society and Its Enemies, and Professor Friedrich Hayek who wrote The Road to Serfdom. The quality might have been there, but the quantity was not. In the ’70s, when Fraser took office, the intellectual climate was little changed. Professor Milton Friedman’s Free to Choose had appeared. In the aftermath of the defeat of the Fraser government and as part of the soul-searching and breast-beating that followed the change was dramatic, the vehicle being the think-tank which is the over-simplified term for a group of academics operating either within or outside of a university and relying on endowments or subscriptions to finance the systematic examination of contemporary issues. They transformed the intellectual climate, as the Fabians once did for the Left. The ideas which they are throwing up provide an intellectual content for the conservative parties which have removed Kelly from his solitary role as eccentric free-trader. They have seeped into the Labor Party, reversing a flow which continued in Australia until 1982 when the McMahon coalition government adopted social welfare measures that added to the inflation of the ’70s.
Who’s who on the Intellectual Right
Following is a quick guide to the think-tanks of the Intellectual Right:
- The Australian Institute for Public Policy: Perth-based and directed by former federal parliamentarian John Hyde. Financed by subscription from firms and individuals. The AIPP publishes monographs dealing with issues such as industrial relations, education, welfare. The chairman is Bill Clough, of Clough Engineering.
- The Institute of Public Affairs: Melbourne-based and the original surviving think-tank, dating back to 1943. The founding chairman was Sir George Coles and the founding director was Charles Kemp. The IPA is credited with generating many of the policies adopted by Robert Menzies when he founded the Liberal Party after World War II.
Today’s chairman is Charles Goode and its director is Kemp’s son Rod, a former staff officer of Fraser Finance minister Senator Dame Margaret Guilfoyle.
The IPA publishes a quarterly magazine as well as papers and monographs. A former deputy secretary of the federal Treasury, Des Moore, heads its economic policy unit. A former head of the Western Australian treasury, Les McCarry, is head of the IPA states’ policy unit in Perth and Dame Leonie Kramer is setting up an IPA education policy unit in Sydney. It is financed by subscription.
- The Institute of Public Affairs (NSW): also founded in 1943, as a separate foundation. Chairman is stockbroker Jim Bain and director Gerard Henderson, a staff officer to both Kevin Newman when he was a member if the Fraser’s ministry and to John Howard. Henderson contributes to the IPA Review which he distributes to his members, publishes papers and monographs and six times a year the IPA Media Watch. Henderson, like Hyde, write for The Australian whose feature pages constitute the single major popular forum for right-wing views. He has regular televison and radio spots and is tending to add the media to his previous specialisation, industrial relations. He took on John Pilger on the Left over his bicentennial reporting and David Irving on the Far Right, over his revisionist history of World War II.
- Centre for Independent Studies (Sydney): Founded in 1976 by Greg Lindsay who perceived an intellectual vacuum and set out to fill it well before the two IPAs revived themselves. CIS publishes papers, monographs and books and a bi-monthly magazine CIS Policy Report, edited by Michael James. Lindsay, a high school mathematics teacher who decided something had to be done, ran CIS part-time until 1979 and must be regarded as having taken a leading role in intellectual resurgence. As do the IPAs, CIS arranges seminars and brings out speakers.
- The Adam Smith Club: Formed by Lindsay, with branches in Sydney and Melbourne, as a dinner club, the ASC has an attractive tie and give an annual award to leading figures in the Right’s intellectual resurgence.
Among the recipients have been Kelly, Lindsay himself — after he has withdrawn from an active role in the club — the late Sir Keith Campbell, of the Campbell report, Professor Lauchlan Chipman, journalist Peter Samuel and Professor Mike Porter.
- The Centre of Policy Studies, Monash University Melbourne: Professor Porter’s think-tank and responsible for major work on income tax reform and for plans to set up a fee-paying completely private university, the Tasman University, with campuses in Melbourne and Auckland offering courses in business and economics.
Porter, with five other academics, has reviewed the earlier proposals for taxing and spending reform and in Spending and Taxing II: Taking Stock presents the case for a top personal and company tax rate of 30 percent, with corresponding greater responsibility on individuals to provide for their own education, housing, welfare and retirement.
Porter’s CPS, as a university body, received federal funds until the Hawke government cut them off.
- HR Nicholls Society, Melbourne: A debating society which organises seminars on industrial relations once or twice a year. The driving spirits are Senator John Stone, the former head of Treasury, and Ray Evans of Western Mining.
The HRN Society has contributed heavily to changed public, political and government attitudes to restrictive industry practices.
- The Right has its heroes outside the intellectual context of think-tanks, study groups and discussion societies. Notable is Ian McLachlan who has just stepped down as president of the National Farmers Federation.
McLachlan, aided by NFF industrial officer Paul Houlihan, took up the cause of the Mudginberri Abattoir in the Northern Territory and showed that certain industrial strategies could work. He used the law to beat a strike, an example that was followed in the Dollar Sweets strike in Melbourne. The strategy has been aided by the $15 million fighting fund which the NFF raised by popular subscription.
- Other notable heroes are Hugh Morgan, of Western Mining, who backed the revival of the IPA in Melbourne, and former Peko Wallsend chief executive, Charles Copeman who took on the unions over restrictive work practices at Robe River and increased productivity by 35 percent.
- The Right also has had its beneficiaries, among them the Hawke government. The Labor regime has been given directions in which to move at a time when it appeared overwhelmed by economic problems and whose significant initiatives over the past two years reflect Intellectual Right debate: fiscal restraint and budget surpluses and charging university students for their education.
