Australian Way of Life

Modern Libs Don’t Believe What Peacock Did

Written by
7 May 2021
Originally appeared in Australian Financial Review

No Liberal MP will say it publicly, but more than one is willing to whisper it in private. It’s not immediately obvious how next week’s federal budget from the Morrison government will be much different from one that would have been delivered by a Shorten government or might be delivered this time next year by a possible Albanese or Plibersek or Chalmers government.

May 2014 was only seven years ago but it feels like a time from another era.

Back then Joe Hockey, as Treasurer, declared in the first of his two budget speeches: “The age of entitlement is over” and “It is the time to face facts … without change the budget would never get to surplus and the debt would never be repaid … the time to fix the budget is now. Doing nothing is not an option. The days of borrow and spend must come to an end.”

That was from a world before COVID-19 and zero interest rates. Today the issues dominating Liberals’ thinking are gender quotas, how to adhere to Joe Biden’s 2050 net zero pledge and changing the constitution to create different categories of citizenship.

What notions of “reform” the Liberals currently possess invariably involve the government spending more money. And to be fair, that simply reflects the zeitgeist. On these pages a few days ago the chief executive of the Grattan Institute listed three measures of “bold reform” she urged upon the Morrison government. They were to spend an extra $10 billion on aged care, $2.4 billion on mental illness and $5 billion on childcare subsidies.

How far the Liberals’ perspective has shifted over recent decades and by how much their ambitions for reform have been eroded is easily measured.

The death three weeks ago of former Liberal leader Andrew Peacock prompted something of a reappraisal of his contribution to Australian politics. It’s true that much of his career was grounded in his charm and style rather than deeply held policy positions, but Peacock was a more substantial figure than is commonly credited.

Arguably the finest moment of his time in politics was in 1980 when, as foreign minister on the eve of an election, he threatened to resign from cabinet if the Fraser government didn’t withdraw Australia’s diplomatic recognition of the Khmer Rouge regime in Cambodia. Peacock was accused of political blackmail – which it was – but he won, and he was right to do what he did.

He might have been the leader of the “wets”, but as John Hyde, an intellectual godfather of the “dries”, noted, Peacock was by instinct a free trader and, while certainly not a raging Hayekian economic rationalist, Peacock was never quite as “wet” as claimed.

Examining the policies the Liberal Party under Peacock took to the 1990 federal election reveals not only how much the Liberals have changed but how much the country’s entire policy terrain has been altered to be almost unrecognisable from what existed 30 years ago.

In March 1990, Peacock promised that if elected by the end of his first term “tax rates will be cut” and “government will be smaller”. He promised a flat two-tier personal income tax system, with a top marginal rate of 39 per cent (it was then 48 per cent) and the abolition of the capital gains tax, to be replaced with a “speculative-gains tax”.

The Liberals pledged to allow employers and employees to opt out of the industrial relations system, limit the receipt of unemployment benefits to nine months and sell the Commonwealth Bank and Qantas.

Not all of his promises were good ones. In a sign of things to come, Peacock did commit to introduce a new program of childcare tax rebates.

Interestingly, in the context of contemporary discussions of policy for Indigenous Australians, Peacock said this: “We oppose and will abolish the Aboriginal and Torres Strait Islander Commission, which by its nature seeks to separate rather than unite all Australians. We strongly believe the proposal for a treaty is flawed in legal, political and historical terms and will not proceed with treaty negotiations – believing a treaty will cause great divisions in the community.”

For both major parties today “bold reform” is about spending more money. But once upon a time the Liberals didn’t believe what they seem to believe in today.

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John Roskam

John Roskam is the Executive Director at the Institute of Public Affairs

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