AHC / WI John Hewson won the 1993 election?

[La Rouge Beret]

What would a John Hewson led Australia have looked like?

[ColeMercury]

Hewson's plan was for a 15% GST, covering a lot more stuff than the eventual one we got ended up covering.

[La Rouge Beret]

Entirely right a far more balanced GST without the exceptions that have decreased its effectiveness in recent years.

[RogueBeaver]

He's a 1-termer IMO.

[Magniac]

There was a whole lot of Fightback! that has no chance of passing the senate if the Labor Opposition and the Australian Democrats stall. In fact I suspect the GST is about the one thing the ADs would be willing to negotiate on, as that's what they did with Howard in OTL, after all. And I guess they would force plenty of amendments on Hewson if he wants their support for that.

The Medicare-, benefits- and IR-system changes are nowhere near as negotiable; all the senate corner parties should join with Labor to block them outright.

Hewson would have to turn towards setting the stage for a double dissolution election if he wants to get anything like most of his agenda implemented, I don't see any alternative (for similar reasons I've been predicting that an Abbott govt will consider seeking this form of mandate as well, not that his agenda is anywhere near as pro-active as Fightback! in any of its draft forms.)

Of course Paul Keating had warned the Australian voting public that the ALP in opposition would allow Dr Hewson's reforms to pass through the senate, but that was just an ominous Buyers Beware declaration, not a promise of cooperation.

How do we know this? Because Keating was telling people around him that he wanted to stay in the leadership in the event of an election loss, that he was convinced he could beat a Hewson govt from Opposition at a DD election.

Another thing: I wonder if the shock therapy of Fightback's! various components will slow down the economic recovery the country was in after the '91 recession. And it was a pretty slow recovery to begin with.

For instance, in OTL the reelected Keating Labor government had to cancel its promised income taxcuts, and these cuts were designed in the very first place to compete with the Coalition's promises for the '93 election. I imagine these Liberal fistfuls-of-dollars are going through under a PM Hewson, regardless of whatever changed forecasts he's forced to accept.

A pure form of Hewsonism is going to prevent the rise of the budgetary stability that nineties Ausdtralia was settling into, I think.

Hmmm; I give Paul Kelly a lot of crap for being the prince of CW thinking in the Australian commentariat, but darned if a google search on 'Hewson Fightback! Balanced Budget' doesn't bring up this interesting little nugget from google books:

It's intrigued me that in 1993 the Commonwealth Budget was in deep deficit and Fightback! was a program that funded itself but would have made no inroads in balancing the Budget. It was almost as though it existed in a vaccum in terms of fiscal policy. In crucial ways it overreached itself or its ineptness blunted good policy.

That extract from 'The March of Patriots: The Struggle for Modern Australia', btw, is not Kelly speaking, that's Peter freakin' Costello.

So, basically, I rather suspect that $10 billion dollar deficit that Keating left at the end of his '93/'96 term IOTL, that's a baseline for Hewson if he's gone and implemented his polices in an economy where unemployment was still up near ten percent, an economy where the recent programme of tariff cuts are just kicking in.

Originally Posted by La Rouge Beret

Entirely right a far more balanced GST without the exceptions that have decreased its effectiveness in recent years.

The current Australian GST has been ineffective?

I see some obscure points made on this forum, and this is right up there with 'em.

[RogueBeaver]

So the scenario goes like this: Hewson narrowly wins, Keating announces he'll continue in Opposition. Hewson passes the fiscal stuff only but finds the rest blocked. Keating shreds him on a daily basis as per OTL, Hewson gets frustrated by the legislative deadlock and goes for DD in early '95? Keating wins easily.

Would Hewson have let Howard into Cabinet? Kelly says in MOP that Hewson was deadset against Costello being admitted, nothing about Howard.

Final question: once Hewson loses again in '96 who's the next Liberal leader? Howard or Costello?

[RogueBeaver]

Another question: What happens with the republican wars? Does Keating call a referendum?

[Magniac]

Originally Posted by RogueBeaver

So the scenario goes like this: Hewson narrowly wins, Keating announces he'll continue in Opposition. Hewson passes the fiscal stuff only but finds the rest blocked.

Y'know, I think just because the Dems are likely to offer to deal with Hewson on the GST, it doesn't follow that he would.

In OTL the Howard government's deal with that balance-of-power party over IR and the GST was all done on a fairly ad hoc basis, even accounting for the fact that the 1998 federal election was a referendum on the GST. IR was done in '97, the GST in '99; separate reforms in separate parliaments.

1993, OTOH, is a referendum on Fightback!, and that's a much broader manifesto than just a value added tax. And the Coalition will expect to pass it all in one parliament, because they have the will of the people at their back, forget what the unrepresentative swill in the senate think (ha).

I think Doc will reject passing a watered down version of his tax, not if he has confidence of passing every plank in his platform via a double dissolution, 100% pure and unspoilt. Hell, he may even get to revive the first draft of Fightback! which he'd abandoned back in '92, reintroduce the original harder edge of those reform bills so he can go to the DD on them.

Originally Posted by RogueBeaver

Would Hewson have let Howard into Cabinet?

Howard is arguably the key non-treasury minister in a Hewson Coalition govt formed in '93, as he was Opposition industrial relations spokesman going into the election. So he's the Hewson's Cabinet minister for Releasing Australia From The Bondage Of Unionism. In fact, before the election he'd declared that labour market liberalisation was now his main goal in politics.

I can see him putting pressure on Hewson to adopt a crash or crash through approach, of ignoring outreach to the Dems in favour of a new election to pass it all in one go.

Originally Posted by RogueBeaver

Keating shreds him on a daily basis as per OTL, Hewson gets frustrated by the legislative deadlock and goes for DD in early '95? Keating wins easily.

Maybe, I don't know. If Hewson and treasurer Peter Reith simply cut spending across the board in the budgets for '93 and/or '94, possibly in frustration at the fact they know the senate will reject all structural reform legislation, then I think any resulting economic contraction will help the Labor Opposition, regardless of who leads it. Is it enough to let the ALP beat the Coalition at a DD? Maybe.

Originally Posted by RogueBeaver

once Hewson loses again in '96 who's the next Liberal leader? Howard or Costello?

If Hewson loses government then I think the growing cult of Cozzer will take hold. But Howard is an experienced minister, so I think he's in with a chance if Hewson falters while in office.

[RogueBeaver]

Scenario 1: Hewson/Reith forget Fightback and focus on balancing the budget. Try and muddle through to '96.

Scenario 2a: Hewson/Reith try and crash Fightback '92 or '93 through the Senate.

Scenario 2b: Hewson pushes through fiscal stuff but not the rest.

Scenario 2c: Keating tells Lab senators to let Medicare and some of the hottest proposals through. Walk them up the plank, saw it off, essentially.

Given what I've read of Hewson's personality I'd say Option 2 is more likely. If Hewson can't sell that stuff like Howard sold the GST in '98 then he's done IMO.

How stable would a Hewson government be? Given how tense things are among the top Liberals there's probably going to be a lot of ink spilled, if no trigger pulled.

[La Rouge Beret]

Originally Posted by Magniac

The current Australian GST has been ineffective?

I see some obscure points made on this forum, and this is right up there with 'em.

Because of the exceptions that were made when the GST was introduced excluding education, finance and health care from its scope. This has resulted in a diminishing source of tax revenue for the federal government in recent years for the GST. These three exceptions are relatively inelastic in demand, hence the cost of foregone tax revenue is increasing, relative to the subdued retail / economic climate outside of the resources sector.

Combined with businesses utilising existing company losses means that the revenue from company taxes has diminished accordingly, causing the fiscal tightening seen.

There are a couple of articles that discuss this in my professional accreditation... I'll try to find them. But I don't read taxation texts for my enjoyment .

Can elaborate further if anyone is interested.

[Magniac]

Originally Posted by RogueBeaver

Scenario 1: Hewson/Reith forget Fightback and focus on balancing the budget. Try and muddle through to '96.

This is possible, but tough for them to accept, as it's an admission of defeat; not even Whitlam tried for a full term when the senate blocked his agenda. Hence the DD as an option.

Originally Posted by RogueBeaver

Scenario 2a: Hewson/Reith try and crash Fightback '92 or '93 through the Senate.

No crashing is possible; only the olive branch approach to the Dems will work (or to Brian Harradine, should the Coalition somehow get 38 senators in a strong election win, which I'm not certain is possible.)

Scenario 2b: Hewson pushes through fiscal stuff but not the rest.

Once again, compromise for limited results. This is entirely possible, but it means watering down Fightback!, and the whole programme had been revised once before when they were in Opposition.

Scenario 2c: Keating tells Lab senators to let Medicare and some of the hottest proposals through. Walk them up the plank, saw it off, essentially.

Most unlikely, Labor can't support what it sees as hard Right policies. Of course the media will be pressuring them to do so, but that elite centrist pressure should be easy to see off.

Originally Posted by La Rouge Beret

There are a couple of articles that discuss this in my professional accreditation... I'll try to find them. But I don't read taxation texts for my enjoyment .

Can elaborate further if anyone is interested.

This accounting analysis of the GST is never raised these days, the only debate is about the apportionment of the revenue to the states.

Can you give any examples of value-added- or consumption-taxes that avoid these problems thank to the way they're structured, or is this inherent to all tax systems?

A lot of online retailing tends to escape these things, you know. I don't know why a purer Hewson GST changes that.

[RogueBeaver]

So how well do those negotiations go and what gets through?

[Magniac]

The thing to look at is what Howard got through the senate in OTL; GST negotiated with the Dems, but with concessions that removed certain items from being taxed under that consumption tax (many foodstuffs, f'rinstance); limited IR reform, but not nearly as dramatic as what was proposed under Hewson, or later passed in 2005 when the Lib/Nats won a senate majority; and also, the privatisation of Teltra, which was achieved by negotiating with the Greens and ex-Labor senator Mal Colston, IIRC.

I don't know if Hewson wanted to privatise the national telco, but I think that probably comes onto the agenda if he's elected. That sounds like a way for him to cut income taxes if he doesn't have the new revenue stream from a GST to pay for those cuts; but that also implies he may not be able to use Telstra money to pay down the national government debt as Howard did.

Yet I keep coming back to the fact that larbour market- and Medicare- reform needs senate assent, something he's not getting without a new election for all of both houses. And I just don't think Hewson would go for a modified GST, not if he can add that legislation to the pile that would be passed 100% via a post-DD sitting (if he wins said DD election, that is).

[RogueBeaver]

So stalemate if no compromises are made, and we go into '95 with shared responsibility for an at best meh economy. Close election either way I'm guessing.

[Magniac]

Originally Posted by RogueBeaver

So stalemate if no compromises are made, and we go into '95 with shared responsibility

That would be a triumph of spin for Hewson to successfully get that idea across, what with it being only twenty years since Whitlam had to rely on a DD to get Medibank`n'stuff passed into law thanks to Coalition and DLP senate obstructionism.

Not that the government and large sections of the media wouldn't blame Labor for being meanies in failing to reciprocate the Coalition's previous support for Hawke/Keating's eco-rat agenda.

[RogueBeaver]

Which he wouldn't. Not with Keating as Lab leader. (Slight chance with Beazley) So Hewson gets knocked off after a term and PK's back in. What's his agenda? Does he learn the lesson of "All Economy All The Time?"