It is important that businesses, investors and the wider community appreciate that the nation has elected a government with business policies not seen in Australia for half a century. …
Economically disastrous policies 1972 – 75
In the Whitlam era those policies led to a deep recession but, as I will discuss below, modern Australia is vastly different to 1972-75, so the policies may not have the same outcome.
Nevertheless, the results of the 1972-75 Whitlam economic and business agenda has been masked by the passage of time and the emotion of the 1975 dismissal plus the social changes that the Whitlam government introduced.
The current Albanese ministry contains three ministers that are remarkably like Whitlam’s Clyde Cameron, Rex Connor and Frank Crean.
Clyde Cameron –> Tony Burke:
Clyde Cameron, like current Employment Minister Tony Burke, was dedicated to boosting wage rates irrespective of productivity. …
Former Reserve Bank governor Ian Macfarlane describes the Cameron “achievement” this way: “What took place in the Whitlam era was probably the worst single example of economic policy that I can think of in our history”.
“We had wages rising by 30 per cent and inflation by nearly 20 per cent”.
Frank Crean -> Jim Chalmers:
Whitlam’s Treasurer Crean has an uncanny similarity to current treasurer Jim Chalmers. Crean who had been in opposition for 21 years tried to curb the spending, but he simply did not have the clout in the cabinet to rein in the big spenders. He was an obstacle to the agenda and in the end, Gough replaced him with the hard left Jim Cairns, who accelerated the spending. …
Rex Connor –> Chris Bowen:
Whitlam’s Rex Connor wanted the government to determine the mineral industry’s direction by price controls, investment initiatives, a government authority to develop and sell resources, the substitution of natural gas for fuel oil, and support for a uranium industry.
Chris Bowen has followed the Connor path in his intervention in the gas market.
Capital strike in 1974, but maybe not this time:
A logical conclusion from the above is that there is a possibility that capital investment will again slump and Australia will repeat the Whitlam recession. It will happen if there is a global collapse akin to the 1970s oil crisis repercussions. …
What the community needs to understand is that Albanese, unlike Whitlam, can mobilise capital to support his policies.
A good illustration is so-called “social housing” where the government wants to alleviate the dwelling shortages and has mobilised the industry superannuation funds to support its agenda. Whether that investment represents good value for members of these funds is yet to be seen.
Interesting times ahead perhaps, for Australia.