The only debt these two are owed is gratitude
The only use of the word ‘debt’ that’s justified in the same sentence as John Howard and Peter Costello is ‘debt of gratitude’.
If we are hearing a lot about the need to return Government to surplus, and hearing the PM use the word ‘conservative’ as much as he can, it is because Howard and Costello set the governance benchmark and changed our political culture in their term in office.
The Westpac Chief Economist, Bill Evans, put up a telling set of graphs at the bank’s budget night dinner showing the debt situation of Australia compared to the US and European countries.
The contrast was unbelievably stark, but what it showed was that the decade prior to the GFC had been crucial in terms of the national financial foundations to fight and survive the GFC. It made me realise why we should be grateful we didn’t have Gordon Brown as our Treasurer.
And of course banking and financial regulatory frameworks also proved crucial in the GFC, another Howard-Costello legacy to the country.
Now we are having a political debate in the lead up to the election where the underlying political culture that Howard and Costello shaped becomes even clearer.
Both parties must convince voters that they will not blow out public spending, and debt, and taxation. It is simply stunning to see the Prime Minister, a self-declared champion of social democracy, manipulating media sound bites so that the key identity he sells is ‘conservative’.
The point is, voters are now used to the idea of Government without significant debt. It is troubling, for those who saw how hard it was in the 90s to wind-back government excess, to see a return to debt and to public funds being lost to interest payments.
We see in the GFC aftermath how important the hard work of the Howard Costello years was. And we have become used to seeing a good part of any public surplus returned to taxpayers.
The Government is touting its projected return to surplus in three years. The reason it must is that the Howard and Costello achievement includes an electorate that assumes that a good government is one that has no debt, one that funds tax and social reform from private sector wealth creation and government surplus.
When other countries look at the Australian GFC ‘miracle’, we need to remind them that our results have come, not just from insatiable demand from Asia for resources, but from a period of very effective conservative government under Howard and Costello.
It must gall his colleagues, but the reality is that the PM pays Howard and Costello tribute every time he uses the word ‘conservative’.
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