Hawke and Keating dramatically reduced the size of the welfare bill, introducing the then unpopular assets and activity tests. In fact, it can be said that the Hawke-Keating project was a lot more than just liberalising markets, important as this was. Their true legacy was diverting resources and capital from the public sector to the private sector - shrinking government and removing distortions that prevent resources being directed to their most productive ends.
Hawke did not free up Australia's highly inflexible industrial relations system. This task was initiated by Keating in the early 1990s and continued by the Howard Government in the second half of the decade.
Howard inherited those changes and, with the addition of the GST and some early fiscal tightening, has ridden Labor's economic legacy to four consecutive election wins.
In Paul Keating's own words he said ""Mr Howard sought to rescue his tawdry reputation as treasurer, by saying that as treasurer I took credit for reforms started by him. This is an untruth even unworthy of him," Mr Keating writes.
"Howard has spent two decades of his life trafficking in the lie that the Liberal and National parties in opposition supported the reform agenda of the Hawke and Keating governments.
"The fact is the float, the exchange rate and removal of deposit maturity and lending controls on banks didn't require any help or agreement from the then opposition," he says. "Bob Hawke and I needed John Howard's endorsements for our policy changes in 1983 like we needed a dose of rabies."
Paul Keating, first as Bob Hawke's treasurer then as prime minister, saw that Australia's economic structure was failing. The economy was highly protected and deeply uncompetitive. There was a pervasive sense of entitlement but only a feeble impulse to compete. Keating stripped away the comforting but ruinous protection of high tariffs, a tightly controlled financial system and a rigid, inflationary wages structure. He unceremoniously ended a century of protection, and forced Australia to compete in the world.
At the time, this historic transformation won him few friends. He insisted Australians abandon their failing economy before they understood the need. The wrenching retooling was absolutely essential and thoroughly unpopular.
Unfortunately Labor has systematically distanced itself from the Hawke-Keating economic reforms. The model of an open, modern, market-based economy, the economy that John Howard and Peter Costello inherited from Labor, but a concept that Labor itself, post-Hawke and post-Keating, let slip.
Labor needs to make a stand and take their fair share of responsibility and credit for the current economic climate our country finds itself in. What's even more important is that the average voter in Australia sees Labor making that stand.
The coalition continues to focus their scare campaigns on high interest rates from the past saying under Labor, Australia will regress which is the usual political lies. A discerning voter knows this but this election is going to be won or lost on the vote of those who are not necessarily so informed; those who still might be influenced by the right or wrong message.
During this election campaign I would like to have seen some extra focus on Labor's economic credentials to really put some much needed perspective on this issue for the general public. They should be proud and must take credit for the economic reform process that began with the election of Labor on March 5, 1983, with Bob Hawke as prime minister and Paul Keating as treasurer.
great piece. To Howard's credit though he didn't make political hay out of the decisions that labor made - even the ones that were unilateral. Imagine the scare campaign possibilities with tariffs.
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