The foundations of Australia's liberal democracy
many on the centre-right lament that liberal individualism has lost and authoritarian socialist big government has already won. but as david stevens writes in the foreword to his new book, we must remain optimistic for the future. For it is only through a liberal democratic future that all Australians can have opportunity, dignity, respect and impartial institutions necessary to enable them to pursue their happiness and dreams.
Australia is one of the oldest continuing democracies in the world (with only the United Kingdom, United States, Switzerland and Canada able to claim greater continuity) and has been one of the most successful liberal nations. The US Declaration of Independence predates Australia by twelve years, but there has never been a better encapsulation of the liberal enlightenment that made our country – as well as the United States and several others – so successful than its eloquent second sentence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
Without liberalism there is no liberal democracy and without democracy there will not be any liberalism. It is therefore fundamental for liberalism to be revived, and thrive, if democracy is to survive in Australia. The threats to our liberal democracy from various strains of socialism abound: collectivism, corporate statism, reactionary populism and neo-Marxism are real and growing. Not since the 1930s has democracy been under such threat. And not since the 1980s has liberalism in Australia, and indeed the Liberal Party of Australia, faced a greater values and identity crisis.
It has now been more than 15 years since the defeat of the Howard Government at the 2007 federal election. With hindsight, that moment represented the ending of a period in Australian (and coinciding also with the US and the UK) history of liberal ascendancy characterised by far-reaching economic, social and national reforms carried out by both Labor and Coalition governments (and US and UK governments). At the conclusion of it, the Australia of 2007 was a different – and a much better – country than it was in 1996 or indeed 1983 and most definitely 1975!
The onset of the Global Financial Crisis in 2008, the re-emergence of more overtly authoritarian governments around the world, the loss of moral leadership by Western liberal democracies, the slow pace of growth coupled with rising debt levels in most developed countries, the resurgence of populism on the reactionary right and the emergence of group identity politics on the neo-Marxist left, and then the illiberal responses to Covid matched with unprecedented ‘free” money printing and government borrowings, have all left collectivist big government solutions front and centre.
Indeed, many on the centre-right lament that liberal individualism has lost and authoritarian socialist big government has already won. The authors in this book (myself included), while highlighting all the considerable challenges at hand, remain optimistic for the future. For it is only through a liberal democratic future that all Australians can have the opportunity, dignity, respect and impartial institutions necessary to enable them to pursue their happiness and dreams.
Dignity and Prosperity - The Future of Liberal Australian brings together, for the first time, Australia’s leading liberal luminaries or “grandees” in one place for the purpose of reigniting a renaissance of the Liberal cause.
The distinguished contributors all have extensive experience in their respective fields, and now bring their expertise, knowledge, and insight to design a policy program based around the core values of liberalism – personal autonomy and personal responsibility, free market and entrepreneurship, opportunity and security, limited government and sound fiscal and economic management. They know that a strong economy leads to strong finances, which in turn provides for strong national defence and together create the foundations for a strong civic society. This is the virtue of a successful liberal democracy.
However, liberalism is more than just the most successful approach for the fulfilment of economic or practical aspects of people’s lives to deliver prosperity, for it also has a strong moral and social dimension. Many of the authors in this volume highlight the ethical concerns of denying individuals their innate agency, which effectively enslaves them, diminishes their ability to flourish as they wish, and ultimately deprives them of dignity. Alas, this tendency is all too common in an era of rising authoritarianism and neo-Marxist collectivism.
Dignity and Prosperity - The Future of Liberal Australia is a call to action for all non-socialists (liberals, conservatives, libertarians alike) to re-engage in the battle of ideas. As Edmund Burke once said: “Nobody makes a greater mistake than he who does nothing, because he could do only a little.”
Only a liberal Australia can be a free country, an open country, a tolerant country, a civic country, a peaceful country, a prosperous country, a respectful country, a moral country, a safe country, a fair country, a just country, a proud country, and an enlightened country. A land of opportunity, liberty, prosperity and equal human dignity. Or perhaps to put it into a simple slogan, a place where people can “live, and let live” or “live, strive and thrive”.
The book commences with the greatest Liberal of our generation, Australia’s second longest serving Prime Minister, The Hon John Howard OM AC. John Howard’s chapter is on the topic of the enduring liberal principles that deliver successful government, and here he speaks from experience.
John Howard restates that the Liberal Party is a custodian of both the liberal and the conservative political traditions of the Western world; it should always remain a party of ideas (albeit also having an ability to market them well) and not just of managerialism. The individual is the keystone of liberal policy. Giving individual choice and freedom in turn produces free enterprise, which produces prosperity. “Australia needs institutions and policies that release individual energies instead of frustrating them. Enterprise comes from individuals, not governments,” he writes.
The family, in turn, is the most important unit of society. “A properly functioning family is a greater antidote to poverty and low self-esteem than a plethora of labour market programmes and an army of counsellors … Policies which help families live as they wish are always to be preferred to those which tell families how to live.” Families produce independent, self-reliant citizens; that’s why freedom of choice in schooling is so important. The taxation system, in turn, must recognise the cost involved in rearing children.
John Howard calls for a Liberal Party that liberates the individual and their creative energies and rolls back the state that seeks to dominate and assume control. It should also be the party of national pride and self-belief. While the past treatment of Indigenous Australians does constitute a dark chapter of history, many of the nation’s leaders now have a heritage in Indigenous culture. Australia continues to be a magnet for immigrants who come here based on our overall successful effort to produce a prosperous and tolerant society. Divisions should be resisted, in favour of tolerance, respect and cooperation.
The second chapter, by Georgina Downer, Chief Executive Officer at Robert Menzies Institute, outlines why Sir Robert Menzies’s liberal legacy, as both the founder of the modern Liberal Party and as Australia’s longest serving Prime Minister, is still relevant. Georgina argues that the biggest current challenge to Australian liberal values might be internal rather than coming from countries like China or Russia. This is because of the crumbling trust in institutions, decline in appreciation of freedom, censorship and cultural self-loathing, as well as growing number of people (particularly young people) without a stake in society (home, family).
Menzies understood that the broad middle class – home-owning families that value education – are the protectors of liberal democracy precisely because they have a stake in it. Hence his emphasis on the importance of homes material (home-ownership), homes human (families), and homes spiritual (liberal education). These three institutions also inculcate the socially- and individually useful habits such as personal responsibility, self-sacrifice, frugality, saving, and individualism that stand in opposition to collectivism that promotes group identity over the individual.
Menzies directly supported the foundations of family life through a raft of reformist programs including assistance for first home-buyers, family payments, funding for Catholic and independent schools, and proper organisation of the university sector. The rates of home ownership are declining in general and significantly more so among young people, creating a generation without a material stake in our society. Fertility rates are now likewise declining in Australia, presenting a number of challenges for the future, including economic ones. While higher education is expanding, the liberal education component of it has been devalued under the purely utilitarian paradigm. Georgina concludes that the Liberal Party must take these three areas very seriously – they continue to be relevant to Australia today and to the survival of liberal ideals.
The third chapter is the only one by someone who was not a Liberal but a National, yet is still imbued with the classical liberal thought of the Enlightenment, the former Deputy Prime Minister John Anderson AC. His chapter focuses on the importance of the regions and country Australia to a successful nation. The great urbanisation has left many non-city-based people feeling they are ignored, misunderstood or (in terms of the enormous export prosperity they deliver) just taken for granted – okay to be seen but not heard. John reminds us, however, that rural Australia not only makes a significant economic contribution to our country, but also provides a unique and valuable perspective on all aspect of life – social and economic – seeing it comes from a place of self-reliance, practical individualism, realism and high levels of trust.
John argues that all traditional political philosophies in Australia are fracturing, and politics has been reduced to managerialism and short-termism, with name-calling instead of an informed policy debate. The dominant outlook is statist, supplemented by cultural self-loathing. There is a strong distrust of all institutions. Yet John sees hope. “The great majority of Australians will respond - indeed want to respond - to a better narrative,” he writes. “We need a new generation of heroes who will, armed with true knowledge and wisdom and a deep and genuine concern for their society, seek to reinvigorate our citizenry.”
John believes that there is a great role to be played in this endeavour by country Australians– they are uniquely equipped on account of their inherent realism, fiscal and general prudence, and understanding the need for trust to band together to overcome common challenges. Such rural realism is of particular importance when debating energy, environment, and Indigenous policies.
Chapter four is by The Hon. Dr David Kemp AC, one of the great minds of Australian liberalism and now its esteemed historian, with his five-volume comprehensive series on Australia’s liberal history. David argues that liberalism in Australia faces numerous challenges, most notably from the growth of the state and the impact of it on freedoms, choice and competition that are necessary for a properly functioning and successful society and economy.
A new class is emerging, based on educational attainment, which increasingly controls our political, cultural and economic institutions. Many in this class are ‘progressive’ in their values and convinced of their ‘expertise’, having been exposed at universities to various strands of post-modernism, neo-Marxism and identity politics. David argues that the challenge for the Liberal Party is not only to expose the fallacies of current identity politics but to re-express liberal values with policies and in a language that can reach this demographic. We must convince the ‘new class’ that their interests and aspirations are best served by liberal policies, which are the only ones that respect human dignity through freedom and equality.
He argues that the major electoral challenge faced by the Party is the sharp decline in support for among voters under 35 years of age. He suggests that, while the Liberal Party must always be a broad church including liberal reformers and conservatives, the branding of the party in recent years by many of its supporters simply as ‘conservative’ has weakened its appeal to these younger voters, who see politics and policy as in need of reform and seek a program that emphasises a better future.
Chapter five is by the Executive Director of the Centre for Independent Studies, Tom Switzer, and puts the challenges to liberalism into an international (Anglosphere focussed) context. Tom discusses how the last few years have seen significant political realignment in the countries of the Anglosphere, particularly the US and the UK, with the centre-right parties increasingly attracting more conservative working class votes, while highly educated urban voters are drifting to the left. This trend has not been as pronounced in Australia because there is a broad social consensus regarding well-regulated immigration that discourages populism, and because economic reforms of the 80s and 90s combined with resources booms produced a more evenly spread prosperity. One commonality across the Anglosphere is the move to the left by young people, aided by social media.
Australia faces economic challenges brought about by overspending and rising cost of living (made worse by the energy transition). This could be further exacerbated should there be a global crisis of some sort. Herein, Tom believes, lies a political opportunity for the Liberal Party. It should eschew populism and instead find new language to sell the benefits of economic reform to the electorate. Some specific policies he suggests include “cutting red tape for small business, fixing the state-based payroll taxes and stamp duties on property that stifle labour mobility, reducing workplace regulation, putting public finances on a sustainable footing, breaking the construction union’s monopoly power, ending the compulsory retirement savings system, loosening infrastructure bottlenecks, teaching children basic literacy and numeracy skills essential for higher learning, restoring monetary policy to its appropriate role of maintaining price stability and much more.”
There is also a cultural opening. While, again, identity politics is not (yet) as pervasive as in the US and the UK, there is an opportunity to attract more conservative working class voters. In a Howardesque manner, the Liberal Party needs to “remind fellow citizens that defending the things that unite us all are more important in a democratic society than our differences, especially our shared freedoms of speech, thought and conscience.” With business also increasingly going woke, Tom writes, “it is not unreasonable for political leaders to call them out and stress that companies, like sporting codes, should be part of a truly civil society. They should operate as places where all citizens can overcome our political differences and instead come together for genuinely public and inclusive purposes.”
The chapters that follow focus on more discrete areas of policy and philosophy and how liberalism shapes them.
Chapter six by Australia’s longest ever serving Foreign Minister, The Hon. Alexander Downer AC, focuses on his area of expertise, external affairs. He explains that the Liberal Party ascribes to the realist school of foreign relations – it believes in the promotion of self-interest – while pursuing three key objectives: protecting security, enhancing prosperity, and supporting a liberal democratic world. Our national security has been pursued through alliances, particularly with the United States, but also other Western partners like the UK. The Liberal Party has also been a strong proponent of free trade agreements. Both of these directions have been often opposed by Labor. In the third area, “Liberal governments,” writes Alexander, “have stood up for the human rights of individuals because those human rights reflect one of the core values of the Liberal Party: that is a belief in the equal value of all individuals regardless of race, nationality, religious belief or political persuasion.”
Future Liberal governments should build on these three prongs. China provides the greatest challenge through its efforts to create a regional sphere of influence. This would not be in Australia’s interest. To counteract it, we need to ensure that regional political equilibrium is maintained, chiefly by keeping the United States engaged in Asia-Pacific. Secondly, China needs to be made to understand that invasion of Taiwan is unacceptable and will be resisted.
The Liberal Party needs to continue previous policies of strong engagement in the region. This is complicated by instability of many small actors – particularly in the Pacific. Writes Alexander: “Future Liberal governments will have to be prepared not only to invest heavily in the South Pacific through the aid program but also to ensure that both the Australian Federal Police and the Australian Defence Force continue to have contingency plans for any breakdown in law and order in the region.” Our traditional allies (US, NZ) are not always reliable in the Pacific – Australia will need to maintain sufficient independent defence capacity to project power in the region. To that end, Australia will need to spend 2-3% GDP on defence – concentrating on acquisition rather than creating (more expensive) local industrial capacity.
Chapters seven and eight focus on fiscal policy. Chapter seven, by former Assistant Treasurer, The Hon. Rod Kemp AM, on why debt and deficits matter, draws on Rod’s able contribution to this policy area during the early fiscal consolidation period of the Howard Government, complemented in chapter eight by The Hon. Nick Minchin AO, former Leader of the Government in the Senate and Finance Minister during the second half of the Howard Government. They both implore the Liberals to advocate and deliver smaller government, less spending and less debt.
Rod argues that fiscal discipline, which involves running budget surpluses and reducing government debt, is one of the key liberal principles as it produces a smaller and less intrusive government and allows individuals to spend more of their money as they see fit. Tight finances also provide solid foundations that enable governments to pursue significant economic reforms.
Alas, after all the hard and successful work by the Howard Government in restoring government finances and eliminating debt, the situation has worsened again, with spending in excess of revenue and ballooning debt in the last fifteen years. Such financial mismanagement creates intergenerational injustice, reduces freedom, and damages the economy by putting pressure on inflation and interest rates and crowding out private investment. The recent trends in this area have been worsened by the Covid emergency and the popularity of flawed Modern Monetary Theory. The Albanese government’s policies will lead to more unsustainable spending and debt.
Liberals, writes Rod, need to regain credibility on managing debt and deficit. They should oppose increases in spending and try to bring under control major welfare programs that are growing out of control, notably the NDIS, as well as off-budget financing vehicles like the NBN. Growth in public service and discretionary grants programmes has to be halted. Further reforms at the intersection of welfare and training, tax system, and industrial relations are also needed to encourage increased and longer employment.
Nick’s chapter is grounded in the belief that limited government is one of the key principles of liberalism and a Liberal Party core value. This involves low taxation and low government spending confined to key areas of government responsibility only. He acknowledges that while the Howard Government had some great wins in fiscal policy – eliminating debt, running surpluses, establishing Future Fund – it was not completely immune to the siren song of increased spending. The size of government is increasing across the Western world, driven by spending in areas like health, education, and social benefits. In Australia this is compounded by the Federal Government assuming fiscal responsibility for many areas that rightfully belong to other levels of government.
Democratic governments, writes Nick, face incredible pressure to spend more since MPs and candidates see themselves as advocates for all sorts of causes and projects in their electorates – and parties want to win marginal seats. Ministers likewise are faced with a constant barrage of requests for more spending from their stakeholders and are judged in their performance by how much they listen and deliver. A future Liberal government has to recommit itself to the principle of small government. This includes preselecting candidates that are devoted to this end and can resist rent-seeker pressure. Moreover, there is an important role for liberals to educate the public about the importance of fiscal responsibility. Politicians need to again start applying cost benefit analysis to spending proposals. Furthermore, new spending should be counterbalanced by spending cuts elsewhere. The Auditor-General needs to be placed at the forefront of the fight.
Chapters nine, ten and eleven all look at areas of the economy where our national prosperity is at risk. Chapter nine, co-written by leading Australian business figure Hugh Morgan AC and myself, reminds us of the importance of the mining sector that underpins our export earnings and therefore our national living standards, and examines the risks to our national prosperity from rapidly declining and poor competitiveness and productivity.
International competitiveness underpins national prosperity. The economic success that Australia has enjoyed over the past several decades was achieved on the back of important reforms that kept our economy healthy and our export industries able to best others on price and quality. But the trends have been worrying. In the year 2000, Australia was ranked 4, 5 or 6 in most global competitiveness and “doing business” indices, up from mediocre standings in the mid-teens in the early 1990s. Now Australia struggles to crack the top 20. The mining industry, in particular, is beset by challenges - red and green tape, over-regulation, ESG sabotage, government intervention – that pose serious threats to the its future and consequently to the national prosperity that it underwrites. Most recently, while others stepped up to the plate, Australia has not been able to take advantage of the opportunities presented by the disruption to supply chains caused by the Russian invasion of Ukraine.
“Australia,” we argue, “desperately needs a revitalised – and real - economic and fiscal reform agenda.” What are its key elements? Fast-tracked development approvals that cover all levels of government within fixed and shortened timeframes. Long term taxation, including royalty, “agreement” policies that combine competitive international regimes with investment certainty. Flexible industrial relations policies built around high-wage, high-productivity individual agreements tailored for site specific requirements. A rational energy policy that allows our plentiful resources endowment to be developed and abundant low cost power to be delivered to industry and households. Vigorous advocacy and defence of open international trade. Sound, sustainable fiscal policies that bring government expenditure back under control, ensure our tax system is fit for purpose, and end budget deficits and growing public debt. We also need to remove legislative restrictions on developing a domestic nuclear energy industry together with developing the full cycle of the uranium use and disposal industries.
The tenth chapter advocates bringing back our sclerotic industrial relations system on to the reform agenda. Written by leading economist and former company director Dr Judith Sloan, it puts forward sensible and moderate proposals for greater flexibility to the system. Industrial relations is a policy area that has been of interest to the Coalition, but has seen little attention since the trauma of WorkChoices almost 20 years ago. This needs to change, in part to appeal to a core constituency of the Liberal Party: small and medium-sized businesses, particularly those family-owned and -run.
There are two principles, argues Judith, that should govern policy thinking in this area: the freedom of contract and the freedom of association. They should be further underpinned by the principle of a safety net (the National Employment Standards, etc.) so as to blunt some of the opposition to further reforms. There is much scope to remove red tape and esoteric features of the current regulations. Awards could be potentially phased out, with some matters (such as leave) moved to the NES. “Allowable matters” should be reintroduced to further simplify the existing awards. Some of them, particularly in retail, food and hospitality are so complex that even big employers often end up in breach (for example for underpaying). What hope then have smaller employers with no HR departments?
Judith also explains why the rights of independent contractors to enter into mutually beneficial arrangements with employers should be upheld. On the organised labour level, competitive unionism should be encouraged by enabling new unions to be registered even when one that workers can “conveniently belong to” already exists. Last but not least, some of the overreach by the Albanese Labor government (for example multi-employer bargaining) will need to be rolled back by future Coalition governments.
Chapter eleven, by Daniel Wild, the Deputy Executive Director at the Institute of Public Affairs, addresses the crucial topic of energy and climate change policy. In his chapter, Daniel warns that climate and energy policies pursued by both the Coalition and Labor, particularly through the now bipartisan commitment to net zero emissions, risk damaging Australia’s middle class, which is the cornerstone of our liberal democracy. Not only are the rising energy prices a threat to prosperity, they are also likely to prevent Australia rebuilding, post the COVID and Ukraine war shocks, our sovereign industrial capacity.
Daniel argues that the Coalition’s pre-2022 election commitment to net zero has been a gross political mistake. Not only hasn’t it stopped the Coalition losing government, in the process losing some of its heartland seats, it has also eroded the Coalition’s credibility. Opinion polls and analysis suggest that voters support policies like net zero in principle but are unwilling to personally incur costs associated with their implementation. By jumping onboard net zero, the Coalition denied the country a proper debate about costs and benefits of such policies. Now the Liberal Party in particular risks compounding its electoral troubles by chasing after a small number of Teal votes at the expense of much larger working class and middle class constituencies – the two broad demographics most likely to suffer under net zero policies.
With negligible environmental benefits, net zero threatens to impoverish Australia while growing the power and reach of government. If liberalism and democracy are to survive and thrive, the Coalition needs to get real about climate and energy policy.
The twelfth chapter is by former Deputy Leader of the Government in the Senate and long-time Communications Minister in the Howard Government, The Hon. Richard Alston AO. Richard’s chapter is devoted to the key liberal democratic principle of freedom of speech.
Richard argues that freedom of speech is one of the key liberal principles, part of the institutional package that more successfully than any others in history has delivered freedom and prosperity, mostly throughout the Western world. He warns that free speech is currently being challenged by identity politics, where expression is stifled to ostensibly prevent harm to minorities. This is most pronounced at universities but has now expanded to other institutions. Australia has seen recent controversies surrounding section 18C of the Race Discrimination Act. Freedom of religion is likewise constantly threatened, since many religious beliefs now offend various groups, while the integrity of the parent-child relationship is being circumscribed by the trans ideology. Meanwhile, the ABC routinely ignores its Charter obligation to be balanced and impartial, and disregards adverse findings against it.
Richard proposes that rather than legislate to protect freedom of speech – the Bill of Rights problem, which invites judicial activism - the Parliament should instead legislate to prohibit specific threats to free speech. The Parliament should also legislate to finally protect freedom of religion in Australia to safeguard the expression of religious beliefs in the public square, the ability of religious institutions to hire according to their beliefs, the right of state school students to access religious instruction, as well as the right to access medical/psychological treatment in accordance with one’s faith. He concludes by advising that the universities should also be brought to heel to ensure freedom of speech is respected on campus.
Richard’s chapter provides a good segue into the final, thirteenth, chapter by John Roskam, Senior Fellow at the Institute of Public Affairs, on education policy. “If politics is downstream of culture,” writes John, “then culture is downstream of education. The failure of successive Liberal governments to make schools and universities a political priority is one of the most disappointing features of the modern-day Liberal Party.” As funding continued to increase over the years, the outcomes have declined and the sector has been completely captured by ideologues who are fighting culture wars against Australia’s culture and heritage. The education sector is now under the thrall of left-wing ideologues, teachers’ unions and environmental activists.
John argues that reform of education – primary, secondary and tertiary – should be a top priority for a future Coalition government. Such reform should be guided by four key principles: the paramountcy of interests of students as determined by parents, a greater emphasis on non-government ownership and operation of educational institutions, funding following the student and not institution, and genuine diversity in educational visions as possible consistent with a liberal democracy.
In practice, this means policies such as school vouchers, the encouragement of parent-owned and controlled schools, and the abolition of all but minimal government control of the curriculum. Universities, which are currently too big and too monolithic, should be broken up and greater diversity of institutional models and funding encouraged.
While there is sombre, even dire, warning in John’s and other chapters, there is also the cases for optimism. The story of liberalism is a positive one, it is an uplifting one, and it is a moral one – values and virtues worth fighting for. Liberalism has been the best approach for promoting prosperity and equal dignity for all Australians. A classical liberal economic and cultural agenda that focuses on the individual versus the collective, the family versus the state, and the small enterprises versus the entrenched big unions and big businesses, might just be the formula for a successful Liberal renaissance.
Sir Robert Menzies in one of his departing remarks from public office in 1967 stated “the great issue to which Liberalism must direct itself is Socialism”. The more things change … That battle continues to rage today, and we must recommit to winning it.
This is an edited extract of the foreword to Dignity and Prosperity - The Future of Liberal Australia edited by David Stevens.
The book was launched in Canberra on 25 July by John Howard and John Anderson. Read a summary of the event here.