Howard was good, but Keating was better
With the coming release of John Howard’s autobiography, Lazarus Rising, it’s worth considering Howard’s standing in Australia’s political history, and to compare him to his arch-nemesis, Paul Keating.
John Howard and Paul Keating were political titans for 30 years but were vastly different politicians—and famously couldn’t stand each other.
Australian politics has enjoyed many compelling rivalries, such as Keating and Bob Hawke, Howard and Peter Costello and Julie Bishop and a garden gnome, but none have been as rancorous as between Keating and Howard.
The conventional wisdom is that Keating and Howard were co-architects of the modern Australian economy. However, their impact on the economy was far from equal.
Although they agreed that Australia should be a modern and open economy, Keating was a courageous economic reformer. Howard was not.
Howard’s introduction of a Goods and Services Tax (GST) in 2000 is a perfect example of good economic reform. Although common sense suggests that a GST is an efficient and relatively fair way to collect tax, the opposition Labor Party ran a opportunistic scare campaign against it.
Howard knew that a GST would be unpopular with voters but proceeded nonetheless, almost losing the 1998 election. The end-product was a watered-down GST, but Howard gets considerable credit for introducing a tough but necessary economic reform.
Yet Howard cannot claim another important economic reform in his 11 years of power. Herein lies the paradox of the Howard years.
Australia experienced an unrivaled period of economic growth, benefiting from a relatively stable domestic and international economic environment. On this measure, Howard was a successful leader, but he was equally a wasteful one by not implementing generational reform.
Australia’s economy was strong and vibrant and he faced a weak opposition led by Kim Beazley and Simon Crean and an absurd one in Mark Latham. Howard’s uninspired response to this fortuitous position was to make incremental tax cuts, but leave the system fundamentally unchanged.
Howard was a competent economic manager but not a reformer. He was a bit like a sea Captain who skillfully steered a trillion dollar ship over an eleven year stretch of water.
Whilst the Captain deserves credit for his stewardship, the ship-builder deserves more praise for constructing the ship to withstand violent seas. When it comes to the Australian economy, the ship-builder was Paul Keating.
Keating may not have been a brilliant economic strategist but he was an eager learner who absorbed good information from Treasury and his personal advisers, and had the courage of his convictions. He knew enough to think like a visionary.
As Treasurer and Prime Minister, the list of Keating’s economic reforms was stunning. Among other reforms, he floated the dollar, liberalised the financial system, reduced import tariffs and introduced compulsory superannuation.
Some of these were incredibly unpopular with the public and his own stubbornly left-wing political party, but in undertaking them, Keating transformed Australia into an open and globally competitive economy.
Keating remade the Australian economy into that modern, super-strong ship that had the flexibility to withstand a recession in the early 1990s, the Asian Financial Crisis in 1997 and the Global Financial Crisis in 2008.
Although Keating might not agree with this assessment, he was never really of the Labor party. Without Keating, Labor would be a poll-driven, economically illiterate, intellectually barren and pea-hearted political party too timid to pursue a market-based reform agenda. With Keating, Labor is still all of the above, but at least it enjoyed a few outstanding years when it remade Australia’s economy.
If it wasn’t for Keating, Labor would be even bigger economic cowards.
Put simply, Keating had the audacity to fundamentally reshape Australia’s economy, and in doing so, he is the person most responsible for Australia’s current prosperity.
Whilst Howard was generally relaxed and comfortable with the status quo, Keating was endlessly restless. He wasn’t a short-term populist but a long-term dreamer.
The debate over the relative merits of the Keating and Howard legacies is one the great debates in Australian politics. In my opinion, there is a clear winner.
Keating wasn’t just the Placedo Domingo of Australian politics, he was the Shane Warne. Howard was more like the Nathan Hauritz.
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