What Mr. Howard's Government needs to do.

• Author: Stone, John
• Position: 130463919
• Pages: 54(10)

Writing here three months ago during the federal election campaign, I said that, despite its imperfections, I nevertheless proposed to vote for the Coalition in both the House of Representatives and the Senate. In the end, 52.7 per cent of the electorate (on a two-party preferred basis) did likewise. The Howard Government was not only returned on this fourth successive occasion, but it will also have, from 1 July next, a Senate majority in its own right.

Literally millions of words have since been spoken or written about this outcome, and I shall not add unnecessarily to their number. I propose, rather, to focus on the opportunity, and the key tasks, now facing the new government. First, I shall sketch the extent of that opportunity, which is greater than that of any Australian government since Malcolm Fraser's election in 1975. Second, while acknowledging that everyone will doubtless have their own areas on which they believe the government should concentrate its energies for reform, I shall focus on the need to maintain and strengthen our recent outstanding record of economic growth. Finally, I shall say something about two aspects of economic (but not only economic) policy which are central to achieving that objective: the reform of our still highly regulated labour market, and the reform of our personal income tax system.

JOHN HOWARD'S WINDOW OF POLITICAL OPPORTUNITY

The extent of John Howard's victory on 9 October last is extraordinary. Eight and a half years after first becoming Prime Minister, his government was returned to office with an absolute Coalition majority of 24 in the House of Representatives, compared to that of 14 which he gained in 2001 (although also compared to that of 40 which he first enjoyed in 1996 in the wake of that anti-Paul Keating landslide).

I have written elsewhere that this outcome was, above all, a victory for John Howard personally, and that such has been its extent that: (1)

"[S]ubject to his not succumbing to hubris, and to the usual health considerations, I venture the suggestion that, nine years hence, Howard could still be Prime Minister and the Labor Party (if it then remains in its present dysfunctional state) could still be eating his dust". Since then the extent of Labor's dysfunctionality under Mark Latham's leadership (sic) has been much more fully revealed. In politics, of course, a week (let alone nine years) is a long time. Out of the wings of the Labor Party there may yet emerge some political conjuror who, by remaking the party, will restore it to the point where it can again realistically aspire to federal office. Nevertheless, I think it clear that, so long as John Howard feels able to remain Prime Minister, he is likely to be able to do so. As usual, the chief threats to the Coalition's position during that time will almost certainly come from within its own less than disciplined ranks (the so-called "Costello camp" in particular, and perhaps also the Malcolm Turnbull glitterati).

While however the Coalition's House of Representatives victory was remarkable, its prospective Senate position constitutes an even more important election outcome. Since 1 July 1999, when the Senators elected at the 1998 "Goods and Services Tax" election took office, the government has laboured under the heavily adverse Senate consequences of that ill-fated venture. (2) Those consequences will expire on 30 June 2005 when the terms of those Senators elected in 1998 (and who took office on 1 July 1999) come to an end. If we leave aside the four Senators elected in the Northern Territory and the A.C.T. (whose terms coincide with those of Members of the House of Representatives), the 36 Senators elected in the States, including 19 Coalition ones, who take office next July will remain in place until 30 June 2011. Thus, at the next half-Senate election (2007?), the Coalition parties have only to obtain 42.86 per cent (3/7) of the Senate vote in each State to win 18 State Senatorial positions (as they did in 2001) and hence retain their Senate majority for a further term. In short, once the new Senate takes its place next July, it is highly probable that the Coalition will continue to enjoy a Senate majority for the next six years. (3) That is the true measure of John Howard's window of political opportunity.

MAXIMISING ECONOMIC GROWTH

In analysing, three months ago, why an imperfect Coalition government was still preferable to an even more imperfect Labor one, I said that one major judgment in that choice would be which side better possessed "the capacity to maintain and strengthen our continuing record of economic growth and rising real living standards". Noting that "since 1995-96 the Australian economy has grown in real (inflation adjusted) terms by 34 per cent, and average real incomes have risen accordingly", I said that "if this continually rising tide of economic progress has not lifted every single boat in our society, it has certainly not left many behind".

The...