EMBRACING the fiscal restraint of the Hawke and Howard eras is essential for Australia’s long-term prosperity, former Corangamite MP Stewart McArthur says.
Confidential 1986 and 1987 cabinet papers released yesterday detail the inner workings of the Hawke government as it grappled with the falling Australian dollar and adapted to a new economic framework.
Mr McArthur said then treasurer Paul Keating’s “banana republic” comment was a valid statement in that it made voters rethink the economic role of government.
The long-serving Liberal MP said economic changes instituted by former PM Bob Hawke and Mr Keating were long overdue.
“Paul Keating’s banana republic comment was a valid statement because it acknowledged that Australia was living beyond its means,” Mr McArthur said.
“When you look at 1986 and ’87 both Hawke and (then opposition leader) John Howard recognised the need to restructure the economy and to some degree, work together to shape difficult economic reform. The Howard government continued that reform agenda.”
Government spending was reined in by Hawke and Keating in 1986-87 following a collapse in the terms of trade. Mr McArthur said it took political courage to tighten government purse strings.
“It’s an unpopular message to deliver but there comes a point where you have to say ‘the age of entitlement is over’. That is the lesson from that 1986-87 period that the Abbott government and Shorten opposition need to reflect on.
“All big-spending governments do is buy short-term popularity at the expense of the national interest.”
The cabinet papers also reveal the cost blowout of constructing new Parliament House on Capital Hill, a project that was instituted by the Fraser government and continued by the Hawke administration.
Serving four years in old Parliament House and a further 19 years in its replacement, Mr McArthur said the concrete and marble landmark lacked a certain magic.
“Old Parliament House was much like the House of Commons, it was a very human institution,” Mr McArthur said. “You could stand in King’s Hall at any given time and find out everything you needed to know in 10 minutes.
“It enabled contact with a whole range of people whereas the new building is a fine tourist attraction but it has no real soul.”