It’s time to Fightback! again
The recent passing of Liberal giant, the Hon Peter Reith AM, gives cause to stop and reflect on the Liberal Party of today and its evolution.
As shadow treasurer under John Hewson, Reith played a crucial role in constructing the Fightback! policy; while unsuccessful at the 1993 election, Fightback! went on to become the policy blueprint for subsequent Liberal Governments.
Many iconic Howard Government reforms that stimulated economic growth and productivity gains find their roots in the Fightback! policy papers, including the introduction of the GST and privatisation of Government Business Enterprises.
Fightback! didn’t just provide a plan for Liberal Governments to execute; it represented a shift in Liberal philosophy. Significant tax and spending cuts eschewed the Keynesian orthodoxy of some in the Party, while proposals to eliminate tariffs cast aside the protectionism of the Party’s past.
Fightback! brought a new school of economics to the fore in the Liberal Party - economic rationalism. An Australian term, economic rationalism is often described as merely our offshoot of the UK's Thatcherism or the US' Reaganism.
While it does share many characteristics with these contemporaneous ideologies: privatisation of state-owned enterprises, deregulation, reduction in Government spending, and limited taxation, economic rationalism also places a significant emphasis on evidence-based policy formulation.
So, why the history lesson?
Contrary to the Split Enz hit, occasionally, history does repeat. In 1991, when Fightback! was published, the ALP held Government at a Federal level and in every state bar NSW. Not too dissimilar to our current situation.
On the economic front, in the late 80s and early 90s, Australia was in recession. Rising unemployment, inflationary pressures contributing to high interest rates, falling GDP, significant Government debt, and global financial challenges created the perfect storm of economic difficulties.
Coming out of the COVID-19-induced recession, many similarities can be drawn between economic circumstances then and today. Most notably, significant Government debt as a proportion of GDP and interest rates chasing rising inflation.
We find ourselves in an uncomfortably familiar situation. Labor Governments are sweeping across the country, and there are daunting economic signals. Predictably, doomsaying rhetoric has sprung up about the end of the Liberal Party as we know it. But, as always, there are lessons in history. In 1991, the Liberal Party faced near-total electoral wipeout, but they didn’t bury their heads in their hands. They fought back.
By the end of 1996, John Howard was Prime Minister. Coalition Governments were formed in Queensland, South Australia, Tasmania, Victoria, Western Australia, the ACT and the Northern Territory. A total repudiation of Labor in every Government but NSW, where Labor narrowly managed to oust the Liberal Fahey Government.
On the economic front, too, Australia’s fortunes were reversed. In the 2006-07 financial year, Howard delivered the first negative net debt in three decades through tax reform, sensible spending cuts and privatisation of commercially viable GBEs. By 2007, unemployment had fallen to 4.1%. Average weekly earnings grew 24.4% in real terms during Howard’s tenure, inflation and interest rates held relatively steady, and GDP has grown yearly since - until the COVID-19 pandemic.
Fightback! and its legacy is our Party’s great success story. But how will our generation replicate this success? We face similar challenges and more with an ageing population, skills and productivity shortages, and even greater debt and deficit levels.
I propose it is time to Fightback! again. Liberal members and voters need something to believe in, a platform to support. Something that offers vision and hope for Australia to reclaim its position as a country that punches above its weight economically.
Fightback! is often derided as the document that lost the 1993 election. It was too bold and complicated, and voters didn’t understand it. This may well be true. But it also equipped an entire generation of Liberals with concrete ideas and policies to prosecute.
Reclaiming Government and repairing the economy requires a plan and an understanding of what we’re being elected to do. Without that, we offer empty words and informed voters see through empty words. A Fightback!-style platform underpinned by economic rationalism is that plan; a broad set of well-articulated and bold reforms that can arm another generation of Liberal giants and unlock Australia’s potential.
Liam Kiss is President of the Ku-Ring-Gai Branch of the NSW Young Liberals.