No end to certainty of state paternalism in Australia

Paul Kelly’s book The End of Certainty gives the seminal account of the reforms of the 1980s that helped dismantle the so-called ‘Australian Settlement’ – the White Australia policy, industry protection, wage arbitration, state paternalism, and imperial benevolence.

The conventional wisdom in political circles is that the Hawke government, with the bipartisan support of the Liberal Party, fundamentally revamped some of the key institutions that had shaped national development since 1901. The popularity of this view is a tribute to the influence of Kelly’s tome. But is it entirely correct?

Australian banking was deregulated in the 1980s and the economy was internationalised as tariff walls came down. The effects of the switch in the late-1960s to a non-discriminatory immigration policy paved the way for the emergence of a diverse, multi-ethnic society.

Under Prime Minister Keating in the early 1990s, the Labor Party also began liberalising the labour market. The reorientation of foreign policy away from Britain and towards the United States and other Asia-Pacific countries also occurred under Hawke and Keating.

But conspicuously absent from this catalogue of change is state paternalism, or the principle of promoting ‘individual happiness through government intervention.’

Yet state paternalism is perhaps the most crucial element of the Australian settlement because it set the basic political and economic expectations that determined the role of the state.

At its heart was the ‘free lunch’ mentality, whereby government was held to be a vast public utility whose job was to produce the greatest amount of good for the greatest number of people. It also embodied a fundamental immaturity in the national psyche: a yearning to be molly-coddled and have basic needs provided for.

Today, the same paternalistic mentality continues to animate Australian life.

Most Australians still want government to regulate minimum wages and employment conditions. They also want government-provided health care and education. They even want the government to chip in for the deposit on their first home, and for income tax to be progressively redistributed as generous family benefits to assist with the raising of their own children. All this has huge implications for the size of government and individual freedom.

Clearly, this is the weak spot in the ‘End of Certainty’ thesis. What is dead cert is that state paternalism lives on in contemporary Australia.

Dr Jeremy Sammut is a Research Fellow at The Centre for Independent Studies.
Alexander Philipatos is a Policy Analyst with the Economics Program at CIS.