Today’s political class is in danger of missing this vital point. The politicians’ tributes to Hawke hail his “special connection with the Australian people”, his everyman ease with ordinary voters, his talent for using TV to communicate, his authenticity, his impressive run of four election victories in a row.
You can even discern a touch of envy in some politicians’ comments. They would love to have his appeal. If they could fake his authenticity, they would. And they desperately crave his knack for winning power. If that is all they see – his popularity and his power – they have truly missed the point of Bob Hawke.
Above all, Hawke was a problem-solver. He took the biggest problems of his time and he tackled them head-on. His audacity and ambition were breathtaking.
What problems? The greatest was Australia’s slow but unmistakeable decline into national poverty. The founder of modern Singapore, Lee Kuan Yew, in the 1980s said that Australians were destined to become “the poor white trash of Asia”. He was right.
To change the country’s trajectory would take harsh changes. Factories would shut down. Hundreds of thousands of people would lose their jobs. Workers’ wages would be cut. What prime minister wants to hand out that sort of pain?
Most governments would rather coast along, as the Liberal government of Malcolm Fraser did. Do nothing and hope that the reckoning would arrive after their time was up.
But after Hawke and his treasurer, Paul Keating, defeated Fraser, that is exactly what they set about doing. You’ll often hear mentioned the decision by Hawke and Keating to float the Australian dollar, which had long been traded at a fixed exchange rate. In itself, this is a minor regulatory matter, not a great reform.
The power of the dollar’s float is that it was a metaphor for the overall reform program – taking a tightly protected and regulated economy and setting it free.
Since federation, Australian industry had hidden behind a protective wall of tariffs. These shielded it from international competition. The fixed exchange rate of the dollar was another way that uncompetitive businesses were cosseted.
Part of the deal was that these protected businesses would then share some of their undeserved profits by paying uniform wage rises across the board according to a national wage arbitration, whether they were justified or not. It was cosy, it was safe, it was uncompetitive and it was terminal.
Hawke and Keating destroyed this protected economy. They exposed the country to competition.
They brought down the high walls of tariff protection and allowed market forces to flow in, freeing prices to operate in all the key markets including the foreign exchange market. They deregulated the price of capital by opening the financial system; they liberalised the price of labour by allowing enterprise bargaining.
Strong industries, strong firms prospered. The weak died. Australia’s newly exposed manufacturing sector, as a proportion of the economy, halved in the decades to follow. This was a shock to the country, and shockingly unpopular.
Ronald Reagan in Washington and Margaret Thatcher in London unleashed the same pro-market revolution around the same time. The difference? While Reagan and Thatcher used confrontation, Hawke and Keating used negotiation. That contrast goes a long way to explaining why inequality is much worse in the US and UK.
The centrepiece of this grand Australian negotiation was the Accord. The unions under ACTU secretary Bill Kelty agreed to co-operate with the government’s reform plan. That meant absorbing some hard outcomes for their members.
But they did, and in return the government crafted a new “social wage” to help ease the pain for ordinary people. The creation of universal health care, otherwise known as Medicare, was a part of it. The introduction of compulsory superannuation was another.
One of the big problems of the time was that wages were prone to rapid acceleration. Inflation was high, and workers demanded wage rises to keep up. A wage-price spiral would erupt, and the Reserve Bank would have to crush it with high interest rates.
The solution? Hawke and Keating persuaded the unions to suppress the pay of their workers to try to break the boom-bust cycle that followed. They were only able to do so thanks to the Accord.
Hawke didn’t have to do this. It is very easy for a political leader to coast along, avoiding risk – make a few easy decisions to curry popularity, hand out some tax cuts, announce some new benefits, promise some more roadways, strike a pose for the cameras. Sound familiar?
But, together with Keating, he did. Keating played the hard man of the duo while Hawke was everyone’s mate, winning elections while the hard work went on.
The net result? They created the most successful modern economy in the world, so flexible that it has bounced through every big shock of the past 28 years, unprecedented for any developed country. Hawke, with Keating, could take credit for another world record. A truly important one.
Scott Morrison jabbers endlessly about Australia’s “strong economy”. Hawke and Keating, with co-operation in the parliament from the opposition under John Howard and from the union movement under Bill Kelty, are the ones who really set up Australia’s “strong economy” for three decades. Morrison, like his predecessors, Liberal and Labor alike, are just coasting on that accomplishment.
Hawke’s governments did much more, too, of course. They raised high school retention rates dramatically. They created the HECS system, now known as HELP, so no one need be turned away from university for want of money. They pioneered the world’s leading policy for confronting HIV-AIDS. They demanded greater autonomy from the US within the alliance. They returned ownership of Uluru to its Indigenous peoples.
And they dealt squarely with the big environmental issues of their time. Blocking the building of the destructive Franklin River dam in Tasmania, preserving the Daintree rainforest in Queensland, working out compromises to preserve the Kakadu wetlands in the NT while allowing limited uranium mining, among others.
This is the real reason Hawke is a national hero. He took on the biggest problems of his time. His governments tackled them. And his management mode – chairman of the board delegating to ministers, rather than an interfering tyrant – meant that his governments were able to move on many fronts without a paralysing centralisation.
Hawke’s succession planning was a failure. He secretly promised to hand over the leadership to an ambitious and impatient Keating. Then reneged. His political management was imperfect; he paid the price when Keating finally tore him down.
But Hawke left Australia an infinitely stronger and more modern nation than he found it. Lee Kuan Yew dropped his insults. Australia became an economic model, not an economic basket case.
A Labor frontbencher privately remarked that Hawke’s death on Thursday, two days before a federal election, was “Bob’s last favour” to Labor. Perhaps. But Hawke would have been happier if the timing were taken as the opportunity for political and national reflection, all round.
If Hawke’s great gift was to tackle the biggest problems of his time, what should today’s leaders learn?
The biggest problems today? An ageing economic model in need of revitalisation, with markets lacking competition, weak wages growth, and a disturbing deficit of innovation. An unfair intergenerational deal that has the potential to leave the next generation worse off for the first time in the country’s history.
An incomplete Commonwealth that stubbornly refuses to include its original members, its Indigenous peoples.
And an accelerating planetary disaster of wilful vandalism, a suicidal urge that seems to have a powerful grip on the human race.
In my last conversation with Hawke, almost two years ago, he didn’t indulge himself by boasting of his own past successes. He spoke of the most urgent problem of the future, as he saw it. Hawke was seized with the urgency of addressing climate change. He deplored Donald Trump’s decision to withdraw the US from the Paris climate accord and fervently wished for true leaders to tackle this planetary problem.
Whether Scott Morrison or Bill Shorten wins Saturday’s election, the new prime minister should stop coasting on the Hawke-Keating economic model and craft a reform plan that renews the system and doesn’t just take credit for it. And systematically tackle each of the other big problems.
Australia doesn’t need more prime ministers. We’ve had a gutful of the “my turn” vanity projects masquerading as leaders. It needs more problem-solvers. More reformers. Australia needs more Bob Hawkes.
Peter Hartcher is Political Editor and International Editor of The Sydney Morning Herald.