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1992 review: domestic economic, social and political events and issues

PHILLIP LASKER: Now to our series of special interviews in which we look back over 1992. This morning we focus on domestic issues with social and political commentator, Gerard Henderson - the Director of the Sydney Institute. Mr Henderson is in our Sydney studio and to talk to him, Steven Crittendon.

STEVEN CRITTENDON: Gerard Henderson, from an Australian perspective, has it been an 'annus horribilis' for Australia? I mean, are there causes for pessimism?

GERARD HENDERSON: Well, it's been a very deep recession, particularly in south-east Australia and Victoria and South Australia, especially. But I'm relatively optimistic. I think in Australia in 1992, we did reasonably well in view of the terrible recession that we've had. We're exporting much more than we were before. We're exporting to the Asia-Pacific region which is the fastest growing economic region in the world. Eight of our top ten export markets are in that region. We have a great wealth of talent in multicultural Australia - language talent, cultural talent - which for the first time I think we're beginning to utilise, and particularly in relation to those markets. And so, yesterday's announcement of what BHP is doing in Vietnam is yet another example of, I think, what is the good news in what has been a very harsh recession.

STEVEN CRITTENDON: With almost a million Australians unemployed, did the recession become a driving force for political change in 1992, or was this the year when high levels of unemployment became acceptable?

GERARD HENDERSON: Well, I don't think they're acceptable and I don't think either party has implied that they are acceptable - quite the contrary.

STEVEN CRITTENDON: Acceptable in the sense that, say, Paul Keating is about to go into an election with a fighting chance, with a million people unemployed?

GERARD HENDERSON: Well, Paul Keating is doing that in Australia. And if you look in Britain too, the Tories there still seem to be doing reasonably well in spite of the very severe recession in Britain, which I think is significantly worse than it is in Australia. The issue there, really, is .. I mean, what alternative is there? And so far no one has really come up with any magic solution, other than Australia becoming more competitive, more productive, exporting more onto world markets. Apart from those kind of proposals, there are no easy answers. If there were an easy answer, someone would have come up with one; but no one has at this stage.

STEVEN CRITTENDON: Paul Keating says Dr Hewson's GST is a tenth order issue, and yet it succeeded in occupying vast amounts of the media's attention all through the year. Has Dr Hewson actually succeeded in making politics in Australia more interesting in 1992?

GERARD HENDERSON: Well, I don't know. They've been interesting, I suppose; but more interesting, I doubt it. I was critical of the GST when it was brought down. I really haven't changed my criticism. I think it was politically unrealistic then and that proved to be the case when it was altered just a couple of days after the Coalition lit the candle on the Fightback birthday cake to celebrate.

STEVEN CRITTENDON: Well, what's the significance of that alteration? In the run-up to the election, we had been told this was going to be a really important election. Does Fightback Mark II actually make it less important because the choices are less ideologically stark all of a sudden, and we're back to ordinary Australian politicians all over again?

GERARD HENDERSON: Well, I think the choices are a little less stark. They never were all that stark in the sense there's not a huge difference between what the Government and the Opposition are doing. There's a difference at the margin. Where I think the Prime Minister and his colleagues have been successful is in broadening the issues out. I mean, Paul Keating has proved that successful politics requires a very broad attitude and Paul Keating has been able to open up a whole range of issues, where John Hewson has not only been stuck down very much in economic issues, but surprisingly he got stuck down in a goods and services tax, which is just a small part of a broader economic issue. So, I think the lesson, the political lesson of 1992 is that the Labor Party is much more adept at politics than the Liberal Party in the 1990s. It's also true for the 1980s.

STEVEN CRITTENDON: More clever .. more clever.

GERARD HENDERSON: I think cleverer, deeper, broader, know more about it, read more, think more and are better able to tackle issues across a whole broad range of questions which concern ordinary Australians.

STEVEN CRITTENDON: Well, indeed, Hugh Mackay said on this program a few weeks ago, that Australians are desperately crying out for leaders who will talk to them about something other than economics. Now is that something that Paul Keating has actually provided this year with talk about the flag and the republic, and so on?

GERARD HENDERSON: Yes, he has. He's done it very successfully and I think it demonstrates the kind of depth that there is in the modern Labor Party. It wasn't always in the Labor Party, but the Labor Party of the 1980s and 1990s is very broad, and not only Paul Keating but many of his colleagues on the front bench, on the backbench and in the administration of the party can talk about those issues just the same.

STEVEN CRITTENDON: Bill Clinton has been elected. Fightback Mark II we're now up to. It's been a bad year in a sense for economic drys. Where does that leave Dr Hewson? Should the Liberal Party now be going out to recruit Chris Puplicks and Ian Macphees all over again? Is John Hewson now and will he increasingly be out of step with the temper of the times?

GERARD HENDERSON: Well, I think John Hewson's major errors in 1992 were basically political errors, which had an economic spin-off to some extent. I think we're not surprised they jumped the GST in the form that it came down in. I'm surprised they brought it in, in the first place. But really there isn't much alternative for Australia but to become more competitive and more productive, and if you look at the core policies of both parties, both are going in that direction. The only real issue is the speed at which we're travelling, but there are not many people who think we can turn our backs again on the world as we did once before and become insular again. I don't think there are many people around who say that seriously now. What's interesting is that both sides of politics are focusing much more on the region, on what we can do in the region, on the enormous opportunities for multicultural Australia within the region.

STEVEN CRITTENDON: A fascinating year in the High Court with decisions like the Mabo case. The High Court appears to be focusing more on human rights issues, actually setting a political agenda of its own, moving away from the old Federal versus State rights issues. Is a more politically interventionist High Court that we've seen, a good or a bad thing, a dangerous thing perhaps?

GERARD HENDERSON: Well, I don't criticise all the decisions. I was critical of the way the Mabo decision was brought down. I think the long-term problem for this kind of interventionist and politically activist High Court is its essential unpredictability. The real implication of the Mabo case is that it could well lead to 50 years of cases because most of the judgments are completely open-ended; it could mean anything or it could mean nothing. Now in an environment where we desperately need investment to create jobs, that kind of decision is very dangerous and very damaging because .. not because of the actual decision itself, it's because no one knows where it leads to. And my concern about many of the judges now on the High Court is that essential unpredictability. And a lot of the decisions, if you go back and look at what some of the same judges said 10 years ago, are quite different to what they then said. So, it's very hard to work out where the next judgment would come down; and in economic terms and in terms of creating jobs in Australia, that's the real problem.

STEVEN CRITTENDON: Okay. We've got a few seconds left - a few very quick ones. Winners and losers in 1992?

GERARD HENDERSON: Well, I think the successful politician in political terms in 1992 was obviously Paul Keating who did an extraordinary successful political job. My one query and criticism with Paul Keating would be to warn him against proceeding to re-regulate the labour market of which there are already some signs, because there are not going to be any great job increase in the public sector and there's not going to be a great job increase in the key corporations in Australia. Small business offers the opportunity, and if you re-regulate the labour market, you'll stop job growth there.

STEVEN CRITTENDON: Is Australia closer to being a republic than it was at the beginning of the year?

GERARD HENDERSON: I think it is.

STEVEN CRITTENDON: Can Labor win the next election with a million unemployed?

GERARD HENDERSON: Well, I think the evidence has been for quite some months now, that Labor can win. As to what will happen, I'm not a prophet, but certainly it's going to be a close election and I think it's a credit to the modern-day Labor Party that they can make it close in this kind of economic circumstance.

STEVEN CRITTENDON: Gerard Henderson, thanks very much.