James Morrow: DJ Albo poised to replay Gough Whitlam’s greatest misses
Voters should go back and look at what happened the last time a big-spending government started inflating wages amidst rising energy prices and global turmoil, writes James Morrow.
Opinion
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It’s a bit of a shame that the latest version of the Australian Curriculum, with its new and improved units on dating tips and vegetarianism, contains barely any mention of Gough Whitlam.
Under the new regime, students up through Year 10 will only encounter the great saint of the socialist left twice, once in a sort of grab-bag of 1960s and 1970s era social trends and, perhaps more substantively, in a look at the foreign policies of Whitlam, Bob Hawke and Malcolm Fraser.
But don’t fret too much.
If the polls are correct, Australians of all ages will soon gain a new understanding of what life was like in the Whitlam era, right down to massively inflated wages driving massively inflated prices in a time of global uncertainty, causing the economy to hit a wall.
Because what Anthony Albanese’s extraordinary 5.1 per cent wage rise promise this week represents is nothing short of a return to Whitlamism.
When Gough Whitlam and Labor swept into power in 1972 on a tide of election jingles and “It’s Time” t-shirts, inflation was already on the rise (it hit 5.7 per cent in 1971).
The world situation was a mess, oil prices were shooting up and soon after Labor came to power the Arab-Israeli war made things worse.
And that was before the Whitlam government, whose reckless stimulus and public service wage blow-outs caused a 75 per cent rise in federal spending in 1973 and 1974 and wages go up by a whopping 48 per cent over the same period.
Not long after, the iron-clad rules of economics kicked in.
Interest rates shot up, with the government paying 11.3 per cent on 90-day bank bills during those two years.
Inflation rocketed as well, hitting 16.7 per cent in 1974-75.
If Australia is not very careful, we may soon be seeing a repeat performance of this turbulent time.
Let’s not mince words here.
Anthony Albanese loves to talk up his experience as a trained economist and, to take him at his word, Australia could use more people with such a background at the top of politics.
But if his economic chops are as he portrays, Mr Albanese should know his implied commitment to seeing wages rise by the headline inflation rate will drive up prices, which will drive up interest rates, which will leave the very people who voted for all this worse off than where they started.
More than that the promise also blows up any hope Australians might have had that a Labor government under his leadership will be the promised centrist and economically rational operation we have heard so much about over the last year.
The fact that Labor has doubled and tripled down on the promise, with campaign spokesman Jason Clare underlining the principle that workers shouldn’t go backwards on Tuesday and shadow education minister Amanda Rishworth’s Wednesday morning duck-and-weave sparring session with Sky News’s Laura Jayes, confirms this was no one-off miscue.
At a time when the entire world is getting hit with inflation, caused by everything from Shanghai lockdowns to the Ukraine war to governments everywhere over-stimulating their economies like a toddler in a chocolate factory, this is insanity.
Of course, everyone knows that the only way to get wages up in a real, sustainable sense is to improve productivity.
But let’s be honest.
Neither side of politics seems particularly keen to do the work here because reform creates winners and losers and, in 21st century Australia, everyone must be made whole.
In 2017, the Productivity Commission put out a report that warned “mediocrity beckons if we let it” but most of its recommendations have been left to gather dust.
Labor has made nodding glances towards embracing reform but so far we have seen very little of what that might mean.
Certainly the fact that many of Mr Albanese’s signature policies in areas like housing reveal that his first instinct is for more, not less, government meddling in Australians’ lives is not heartening on this score.
But it is also the instinct to tell people what they want to hear in the hope that there’s a vote in it is arguably worse.
For almost as long as he has been prime minister, the left has run the line that Scott Morrison will say anything to get elected.
But in promising ongoing wage hikes and acting like there will be no consequence either to consumer prices or what people pay on their mortgages or how easy it is to get into the jobs market, Mr Albanese appears to be taking Australians for mugs.
To put it another way, voters should think long and hard before deciding “it’s time”.
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