2 - Liberalisation in Australia

Summary

How has liberalisation changed Australia's model of social protection and the politics of equality? Much of the change has simply echoed changes internationally. As markets and money partly displaced states and law in organising economic life, competition and productivity became key watch words for policymakers, even in discussions of social policy. Still, the Australian experience appears distinct. For some it is an exemplar of how liberalisation should be done. Australia moved swiftly from a relatively tightly regulated economy to an increasingly free market model. It broke records for sustained economic growth and won awards for its ‘economic management’. It is also distinctive because liberalisation came largely through bipartisan changes led by a Labor government in an explicit alliance with organised labour. That has led to divided views within Australia, but also positioned Australia as a crucial example of the uneven development of neoliberalism, suggesting social democrats not only accommodated but entrenched neoliberalism (Humphrys 2018). This chapter aims to connect an analysis of liberalisation to Australia's institutions and history.

The different accounts of Australian liberalisation reflect unusual combinations and alliances. Rapid reductions in tariffs and privatisations were matched by rising social spending. Labor reformers embraced competition but explicitly rejected the free market think tanks often claimed to be the real driving force of change. Economic success came as much from avoiding crisis as improving productivity, echoing Keynesian efforts at demand management. Of course, Australian novelty can be overplayed. Liberalisation was different everywhere, as it responded to existing institutions, and ‘mutated’ as reforms moved from place to place. However, the configuration of unusual combinations makes Australia's story a useful one. Australia encountered liberalisation with a history of egalitarianism and labour solidarity that had not yet translated into traditional welfare state structures, with a progressive government chased by the fiscal record of the previous Labor government and strong movements stunned by the seemingly extraconstitutional means for removing it. Those circumstances produced an unusual politics, where the welfare state was reworked in new ways to conceal either its scale or its distributional impact.