John Howard’s old boss, Malcolm Fraser, has rejected claims he stopped his treasurer from coming forward with reform proposals.

“Why weren’t submissions made to cabinet?” Fraser asks in The Australian. “No submission was rejected. If a minister is worth a crumpet … In the records of history the papers will unfold and people will see where the facts lie.”

Those 30-year bans on Howard’s time as treasurer will soon be up. We look forward to reading the cabinet papers. In the meantime, all we have to work on are the figures in the Reserve Bank Bulletin.

They show that John Howard is the only treasurer in Australia’s history who’s been able to engineer – simultaneously – double-digit inflation (December 1981 to June 1983), double-digit levels of unemployment (April to October 1983) and double-digit interest rates (November 1980 to October 1983).

In the June quarter of 1983, inflation was 11.1%, the unemployment rate was 10.2% and the official cash rate averaged 12.08%.

The election in March 1983 meant that Labor presided over this economic misery, even though they obviously had not created these outcomes.

Howard won office in March 1996. The June quarter 1996 results put inflation on 3.1% (and on track to average 0.9% in the three years 1997 to 1999), the official cash rate was 7.5% (and on track to average 5.1% in the three years to December 1999) while the unemployment rate was 8.1% (and on track to reach 6.6% by the end of 1999).

True, there was a budget deficit – but let’s put it in context. It was well on the way to being prepared at the time of the ’96 poll. Take a dekko at the figures:

Howard treasurer, Fraser prime minister:
Budget deficit (underlying cash balance)

1981-82 0.3% of GDP surplus
1982-83 1.7% of GDP
1983-84 3.3% of GDP

Willis treasurer, Keating PM:
Budget deficit (underlying cash balance)

1994-95 2.7% of GDP
1995-96 1.9% of GDP
1996-97 1.0% of GDP

Under Willis and Keating, the budget position improved by 1.7 percentage points of GDP in two years. When Howard was treasurer, in just two years the budget balance deteriorated by 3.6 percentage points of GDP – about $40 billion in today’s dollars. It makes you view the $8 billion Beazley black hole in a new light.

Peter Fray

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