Wednesday, August 01, 1990

Introduction

CONTENTS AND SUMMARY

It is not possible to present the economic and political justifications for Mandate policies fairly in a brief 'executive summary'.  The following detailed table of contents makes it easy to find the sections you are most interested in.  Page numbers are on the left;  the most important policy recommendations are summarised in italics where their tenor is not apparent from the section headings.


FOREWORD


INTRODUCTION

  1. The Problems
    1. Relative Economic Decline
    2. Debt, Deficits and Depreciation
    3. Social Disorder
  2. A Mandate to Govern
    1. The Mandate Government
    2. No Vision Splendid
    3. Liberal Democracy
  3. Priorities
  4. Structure
  5. Omissions

MACROECONOMIC POLICY

  1. Introduction
  2. A Snapshot of the Economy
  3. The Hawke Government's Policy
  4. The Accord and Wages Policy
    A one-year award wage freeze.
  5. Monetary Policy
    An inflation target of 3 to 4 per cent within two years;  the Reserve Bank to set broad monetary targets and conduct monetary policy accordingly.
  6. Fiscal Policy
    1. Revenue
    2. Expenditure
    3. Payments to the States and Local Government
      Tighter restrictions on State borrowings.  The 2 per cent growth formula for State grants should be abandoned.  Direct payments to local government should be phased out.
    4. Other Savings
  7. Conclusion

GOVERNMENT AND ADMINISTRATION

  1. Introduction
  2. Controlling Public Spending
    1. One Percent Real Reduction in Spending
      The Government should promise:
      • Public spending no higher in real terms after three years than on taking office, except for defence.
      • Indexation of personal income tax thresholds and allowances.
      • Honest elimination of the deficit within three years.
  3. Efficiency and Waste
    1. Taxpayers' Money is Special
    2. Other Sources of Public-Sector Inefficiency
      1. The Chimera of Public-Sector Efficiency
      2. Efficient Use of Taxpayers' Money
      3. The Government-Private Interface
        The question should be:  What is government doing that could better be done by competitive private-sector suppliers, if necessary with some form of subsidy to protect the needy?
      4. Privatisation
      5. Competition and Public Enterprises
      6. Miscellaneous Proposals:  Aboriginal Affairs;  Veterans' Affairs;  Sport, Recreation and the Arts
  4. Parliament
    1. The House of Representatives
    2. The Senate
    3. Parliamentary Departments
      1. EPAC
  5. Government Departments
    1. Long-Term Departmental Structure
    2. Short-Term Arrangements

TAX REFORM

  1. Introduction
  2. Minimal Change
    1. Advantages
    2. Disadvantages of the Present System
  3. In Keating's Footsteps
    1. Advantages
    2. Disadvantages
  4. Radical Reform
    1. Advantages
    2. Disadvantages
  5. Conclusion and Recommendations
    1. Depoliticised Tax Reform
      Set up a committee to design a reformed tax, system.  The report and draft legislation should be presented as a package -- take it or leave it.
    2. Minimal Changes
      1. Tax Indexation
      2. Tax Administration

THE LABOUR MARKET

  1. Introduction
    1. Arbitration and the Unions
    2. The Wind of Change
    3. Labour Market Reforms
  2. Digression:  'Full Employment'
    1. The Natural Rate of Unemployment
    2. What the Natural Rate Means
  3. The Trade Unions
    1. The Two Faces of Trade Unions
    2. Voluntary Union Membership
      Legislate to make union membership a matter of free individual choice.
    3. Consequences of Voluntary Unionism
    4. Voluntary Unionism and the States
  4. Limits to Industrial Action
  5. Wages and Conditions
    1. Voluntary Negotiation
      End compulsory arbitration and provide for legally-enforceable contracts of employment.
    2. A New Role for the Arbitration Commission
    3. Wage Guidelines
    4. Constitutional Considerations
    5. Employment Contracts in the Courts
  6. Wages Policy
  7. Superannuation
  8. Public Service Pay and Conditions

FOREIGN AFFAIRS AND DEFENCE

  1. Introduction
  2. Foreign Policy
    1. Reasons for Alignment with the West
      Australia is and must remain a Western democracy, firmly aligned with the other democracies at a broad foreign policy level.
    2. The American Alliance should be maintained and strengthened.
    3. Nuclear Disarmament
      Australia should welcome and assist moves to reduce international tension, including, but not limited to, mutual, balanced and verifiable arms reductions.
    4. 'Nuclear Ship' Visits
    5. Regional Policy
      A prime objective should be to assure regional neighbours that Australia will continue to cooperate in maintaining regional stability and progress.
      1. New Zealand
      2. Indonesia
    6. China
    7. International Organisations
    8. Bilateral Aid
    9. Cultural Diplomacy
  3. Threats to National Security
    1. Present and Future Threats
  4. The Dibb Report
    1. Self-Reliance
    2. A Strategy of Denial
    3. Defence Capabilities and Force Structure
    4. Constraints
  5. Flaws of the Dibb Report
  6. Warning Time and Core Force Expansion
  7. Common Ground
    The first priority must be to find the money to increase expenditure to at least the 3 per cent of GDP assumed in the Dibb Report.  After the failure of Dibb, another attempt at bipartisan defence policy is needed.  Meanwhile, continue with Dibb's equipment recommendations, but paying full attention to interoperability with allied forces.
  8. Other Defence Issues
    1. Service Pay and Conditions
    2. Efficiency
      1. Procurement
      2. The Naval Dockyards
      3. Outside Contractors
  9. Industry and National Security
    1. Civilian Manufacturing Industry and National Security
    2. Australian Content
      1. Offset Work
    3. Government-Owned Defence Industries
    4. Defence Research
  10. The Submarine Replacement Programme

HEALTH

  1. Introduction
    1. Objectives
    2. Health Care:  A Special Case?
    3. Health Care and Market Failure
    4. Defects of the Present System
  2. A Better Health Care System
  3. First Steps towards the Preferred System
    1. Competition for Medicare
      Allow existing health funds to offer full medical and hospital cover, with as wide a variety of packages as they like
    2. Make Health Care Costs Apparent
      End bulk billing and revise the calculation of Medicare benefits.
    3. More Insurers
  4. Other Action Needed
    1. Waiting Lists for Treatment in Public Hospitals
      Shorten them by sending some Medicare patients to private hospitals.
    2. Medibank Private
    3. Availability of New Drugs
  5. Further Steps
    1. Public Hospital Funding
    2. Medicare and Private Hospitals
    3. Taxpayers, Pensioners and the Medicare Levy
  6. Final Transition to the New System.

EDUCATION

  1. Introduction:  Commonwealth Involvement in Education
  2. Objectives of Commonwealth Education Policy
    1. Traditional Policy Objectives
    2. Private and Public Returns on Educational Investment
    3. Teachers, Unions, Ideologies
    4. New Policy Objectives
  3. Educational Standards in Schools
    Institute universal literacy and numeracy testing in schools
  4. School Funding:  Towards Equity and Freedom of Choice
    1. Vouchers
      Replace recurrent funding of non-government schools with a voucher system
    2. Assistance for the Disadvantaged
    3. Further Stages
    4. Effects of the Voucher System
    5. State Governments and Further Reform
  5. Universities and Colleges of Advanced Education
    1. Introduction
    2. Funding Tertiary Institutions
      1. The Case for Fees
      2. 'Full-Fee' Students
      3. Transfer of Responsibility to the States
        End grants to the States for tertiary education and increase general purpose grants in almost full compensation.  States should have to raise about 125 per cent themselves, preferably by way of fees.
      4. Professional Qualifications
      5. Continuing Education
  6. Higher Degrees
    1. Industry-Sponsored Research
  7. Fees at the Australian National University
  8. Assistance to Students
    1. Scholarships
      Introduce Commonwealth Scholarships.
    2. Postgraduate Living Allowance
    3. Loans

WELFARE

  1. Introduction
    1. Terminology
    2. Objectives
    3. Two Approaches to Social Security
    4. Benefits, Pensions and Superannuation
  2. The Impossibility of Welfare Policy
    1. The Paradox
    2. Counterproductive Incentives
  3. Welfare and the Budget
  4. Long-Term Policy Directions
    1. 'Macro' Policy
    2. 'Micro' Policy
  5. Immediate Action
    1. Evaluate the System
    2. Unemployment Benefit
      1. 'Dole Cheats'
      2. School-Leavers' Unemployment Benefit
        Require six months' employment in the previous year for new claimants.  Raise the minimum age to 17.
      3. Work for Dole:  The Corvée
        Legislate to provide that unemployment benefit claimants may be required to do labour in return.
      4. Training and Work Experience
    3. Indexation
      If necessary to eliminate the deficit, skip one or more pension and benefit indexation increases, with no catch-up afterwards.
  6. Medium-Term Action
    1. Simplification of Tax and Social Security
      Remove pensioners' and beneficiaries' income tax liability and taper net income with a revised means test alone.
    2. Pensionable Ages
    3. Equity between Home-Owners and Others
    4. The Pensioner Health Benefit Card
    5. Family Allowance
    6. Family Income Supplement
    7. Supporting Parents Benefit

HOUSING

  1. Government and Housing
    Abolish the Department of Housing and Construction.
  2. Home-Owners and Tenants:  Government Discrimination
  3. Discrimination between Public and Private Tenants
    The current Commonwealth-State Housing Agreement should be the last.  Some of the saving should be used to increase rent allowance and family income supplement.
  4. By-Laws:  Forced Consumption of Housing Services

TRADE AND INDUSTRY

  1. Introduction
  2. The Proper Objective of Industry Policy
  3. Tariffs and other Protection
    1. Introduction
    2. Free Trade and Economic Growth
    3. The Difficulty of Cutting Protection
      1. Example:  Textiles, Clothing and Footwear
      2. The Reason
    4. Free Trade:  the Problem
      Make the popularisation of free trade a major, immediate goal.
    5. Free Trade:  the Programme
      Phase out all protection in ten equal steps over five years.
    6. No New Protection
    7. Free Trade:  Political Will-Power
    8. Problems of Adjustment
    9. Other Import Barriers
  4. Other Trade and Industry Policies
    1. Departmental Reorganisation
    2. The Australian Trade Commission
    3. Mineral Export Controls
    4. International Commodity Agreements
    5. The General Agreement on Tariffs and Trade (GATT)
      Incorporate the free trade programme in Australia's negotiating position in the current round of MTN negotiations.
    6. Foreign Investment
    7. Takeovers
    8. Competition Policy
      1. Product Markets
      2. Financial Markets
    9. Research and Development Policy

TRANSPORT

  1. Introduction
    1. Regulation and the Market
    2. Natural Monopoly as Grounds for Regulation
    3. Government Ownership of Transport Enterprises
    4. Other Arguments for Regulation
    5. When to Deregulate
    6. Pricing
  2. The Bureau of Transport Economics
  3. Aviation
    1. The Department
    2. Major Airports
    3. Minor Airports
    4. Domestic Airline Policy
      1. The Two Airline Policy
      2. Immediate Action
        Set about ending the Two Airline Agreement.
      3. Medium-Term Action
        From the termination of the Two Airline Agreement, there should be no regulation of air fares, routes or capacity, and no restriction on the import and export of civil aircraft.
    5. Australian Airlines
    6. International Aviation
      1. QANTAS
    7. General Aviation
    8. Air Safety
  4. Shipping
    1. Ports
    2. The Australian National Line
    3. Coastal Shipping
    4. International Shipping
  5. Road and Rail
    1. Roads
      1. Fair Competition between Road, Rail and Sea
      2. Fuel Taxation
    2. Railways

COMMUNICATIONS

  1. Introduction
  2. Converging Technologies
    1. Non-Obstructive Technical Standards
    2. New Postal Services
    3. Fibre-Optic Reticulation
    4. More Broadcast Channels, Less Media Monopoly
    5. Direct Broadcasting from Satellites
    6. Pay TV
  3. Posts and Telecommunications
    1. Introduction
    2. Objectives
    3. Regulatory Reform
      1. Financial Structure
      2. Accountability
      3. More Competition
      4. Competition in Postal Services
      5. Competition in Telecommunications
    4. Use of Contractors
    5. Cost-Related Pricing
    6. Removal of 'Public Service' Restrictions
  4. Non-Government Broadcasting
    1. Commercial Television
      1. The Cities
        The Government should rapidly increase the number of TV channels in the cities.
      2. Regional and Country Television
        The Government should find out what country viewers want.
    2. Non-Commercial Television
    3. Non-Government Radio
  5. Government-Owned Broadcasting
    1. The Australian Broadcasting Corporation
      1. Long-Term Plans for the ABC
        Developments in information technology mean there will soon be no need for the ABC.  The objective should be to make it self-financing by 1995.
      2. Short-Term Action
      3. ABC Staff
    2. The Special Broadcasting Service
    3. Radio Australia

PRIMARY INDUSTRY

  1. Introduction:  Depressed Rural Industries
    1. The Case against the 'Second-Best'
    2. What Government should do for Rural Industries
  2. Section 92 of the Constitution
  3. The Department of Primary Industry
  4. Specific Rural Industries
    1. Wool
    2. Red Meat
      1. Meat Inspection
    3. Wheat
    4. Sugar
    5. Dairy Products
    6. Dried Vine Fruits
  5. Fertiliser Bounties
  6. Drought Aid
    1. Fodder Subsidy
    2. Interest Rate Subsidy
  7. Conclusion

THE ENVIRONMENT

  1. Introduction
    1. A Basis for Environmental Policy
    2. The Need for Compromise
    3. Scope and Aims
  2. Economic Effects of Current Policies
    1. Regulatory Effects
    2. Economic Activity in Conservation Areas
      1. Intensive and Extensive Economic Activity
      2. New or Enlarged Conservation Areas
      3. Costs of Conservation:  Onshore Minerals;  Franklin Dam;  Offshore Petroleum
    3. Direct Financial Cost
  3. Impact Statements:  Environmental and Economic
  4. Easing the Burden of Regulation
    1. Common Environmental Guidelines
    2. Settling Environmental Disputes
    3. The Australian Heritage Act
  5. Direct Commonwealth Expenditure on the Environment
  6. General Policy Initiatives
    1. Restricted Transfer of Property Rights
    2. Careful Direction of Funding
    3. Trade-offs in Conservation
    4. The Long Term:  Explicit Linkage of Environmental Funding

POLICY MANAGEMENT

  1. Introduction
  2. Cabinet and Party Room
  3. Parliament
  4. Government and the Bureaucracy
    1. Ministers' Environment
    2. Bureaucratic Power
    3. The Real World:  Ministers and Bureaucrats
    4. The Minister
    5. The Minister's Staff
    6. Managing the Workload
    7. Ministerial Responsibility

APPENDICES

The Labour Market
Welfare
The Environment


FOREWORD

Planning for Mandate to Govern began early in 1991.  The project was inspired by the Heritage Foundation in Washington, whose Mandate for Leadership and Mandate II had a significant and beneficial effect on the Reagan administration after the 1980 and 1984 elections.

There are major differences between the American and Australian projects.  The most obvious are size and cost.  Mandate for Leadership cost millions and ran to nearly 1100 pages;  We do not have Heritage's resources and we felt it important to keep the book small enough to be readable.  More important differences are less obvious.  The Heritage project was explicitly directed at a 'conservative' Republican (in Australian terms, 'dry' Liberal) administration and was published immediately after an election whose date had always been known, but still several weeks before the new administration took power;  Mandate to Govern is being published probably many months before an election whose date is not known, and is not directed at either major party but at an unknown Government.

Many people have contributed to Mandate to Govern.  All chapters were drafted by myself, relying heavily on other people's work.  Where possible, outside authors are named at the beginning of the relevant chapters.  All chapters were commented on by outside experts, and revised accordingly.  Final editing was then undertaken for consistency of content and style, with chapters reaching their final forms in the last three months of 1986.

The policies in this book are practical, sometimes even cynical;  they are written for real politicians facing the constraints and imperatives of office.  Some may seem more cautious than the major parties' platforms:  this is because the platforms are written with a view to what can be promised, while Mandate is written with a view to what can be done.  Once in power, politicians often underestimate what they can accomplish;  exposed to pressure from vested interests, they forget how much they can rely on the intelligence and public spirit of the 'silent majority'.  No one involved in Mandate expects the next Government to implement all the policies in this book, but we would be delighted to be proved wrong:  the Lange-Douglas Government in New Zealand has shown how far and how fast an economy can be freed without loss of public support.

I would like to thank all those who have helped develop Mandate policies in large or small ways, by writing sections or with ideas or comments.  Many must remain anonymous, including Federal parliamentarians from both major parties and both front benches, public servants and staff of Parliamentary Departments, and present and former ABC staff.  Those who can be named are listed below, but a caution is necessary:  few if any of them would agree with everything Mandate recommends, and readers should not assume that anyone named here endorses any particular comment, argument or policy recommendation.  Responsibility for these and for errors and omissions must rest with myself.

It is also proper to acknowledge the freedom-loving philosophers and economists, from John Locke and Adam Smith to the present day, whose work has influenced Mandate.  But the greatest credit is due to those whose financial support of our work made the whole project possible.

Richard J. Wood


1. THE PROBLEMS

1.1 RELATIVE ECONOMIC DECLINE

Australia's basic economic problem is its slow economic growth by world standards since the Second World War.  In terms of per capita income, we were about third in the world in the late 1940s;  we are now fifteenth to twentieth.  Most other economic problems (trade deficits, Budget deficits, foreign debt, government debt, unemployment, etc.) would be much less severe if economic growth had been faster.  Continued slow growth will make things worse, as Helen Hughes points out:

If trends are not changed, then within 30 years, or 50 years -- that is, in the time of children now alive -- in productivity terms Australia could become one of the less competitive countries of East and Southeast Asia.  Some attention is being paid to such a possibility by economists, but the social and political implications of such a situation are being almost entirely ignored.  Yet the social and political aspects of relative decline, not the economic aspects, are those likely to cause serious problems.

At standards of living now achieved by high income industrial countries such as Australia, minor differences do not matter very much.  There is a limit to the number of television sets a family can own.  "The quality of life" is not directly related to per capita income (though the latter places limits on the former).  However, it will matter a great deal if within a generation young Australians have to seek graduate studies and career opportunities in Tokyo or Singapore to be at the frontier of technological trends, or if within two generations unskilled Australian workers have to look for jobs as maids and waiters in Kuala Lumpur as, for example, British workers are today seeking opportunities in continental Europe.

The political implications of a relative decline in living standards would be even more sobering.  Australia today maintains a relationship vis-à-vis ASEAN countries by the relative weight of its total national income.  Australia, with its 15 million people, is small compared to the 265 million or so people of the ASEAN countries, but Australia's total GDP of some US$171 billion (in 1981) remains significant compared to the total ASEAN countries GDP of US$200 billion.  However, at 1970-81 rates of growth, in 30 years time ... Australia's total GDP would be [about US$450 billion and] ASEAN's about US$1730 billion (all in 1981 prices).  In contrast to, say, Switzerland's or Sweden's role with respect to their major European neighbours, Australia's relationship would be more like that of Ireland or Portugal. (1)

The other vital point about economic growth is that the bigger the cake, the easier it is to ensure that everyone receives a satisfactory portion.  Faster growth helps reduce internal as well as external tensions.


1.2 DEBT, DEFICITS AND DEPRECIATION

Since 1973-74, Australian governments have spent more than they were prepared to raise in taxes.  Australians have been living beyond their means, borrowing abroad to maintain and raise their living standards.  Our children inherit a needless and dangerous debt.  The world has marked down our credit rating and depreciated our currency.


1.3 SOCIAL DISORDER

Australia's social problems include the increasing number of single-parent families and the ill-educated and alienated youth produced by the effective abandonment by many parents and schools of traditional notions of learning.

They also include a growing readiness, evidenced by many single-issue pressure groups, to challenge by direct action decisions reached through the democratic process;  and a growing lack of respect for the rights of other people and for the law.  One contributing factor is the poor example set by many people in positions of responsibility.  Another is the very large proportion of modern legislation which deals with matters on which ordinary people have no feeling of right or wrong.  When the mass of law of which people are aware makes sense to them in terms of right and wrong (e.g. dangerous driving) they will respect laws which are not defensible in those terms (e.g. a speed limit of 60 km/h rather than 55 or 65).  But when most law is arbitrary and even more remote from right and wrong than the speed limit, respect for the whole body of it is imperilled.


2. A MANDATE TO GOVERN

The problems are not new, although most have become more apparent in recent years.  The policies to tackle them are not new either, at least in essentials;  some of them in fact constitute a step back to an age of responsible public finance and a stable level of prices.  The trouble is that recent Australian governments have not been able, or have not felt able, to implement them.  A recent and striking example of this is the contrast between rhetoric and actuality in the 1986-87 Budget.  The rhetoric included Mr Hawke's description of the economic problems as the worst crisis the country had faced since the Second World War;  but the Budget measures did not seriously address the country's economic problems. (2)  The Fraser Government often enough showed similar pusillanimity.

Yet if democracy is a viable system of government, it must be possible to persuade people to accept whatever policies are needed to cope with particular situations.  If voters will only ever look at their own, immediate, personal interest and never set that aside for longer-term or more general considerations, democracy is doomed.  There are harder times ahead for Australia, but we still have a choice:  we can procrastinate, attempt to evade, and make things far worse in the long run;  or we can face our troubles resolutely and come through them sooner and with less hurt.  This book would not have been written if its progenitors believed that the Australian people were poltroons and democracy was unviable.

The policies presented in this book are policies which address Australia's most pressing problems and which can be explained to and accepted by the ordinary Australian voters whose acquiescence is vital.  They are policies with which politicians can obtain a true Mandate to Govern.


2.1 THE MANDATE GOVERNMENT

Everything in this book is ostensibly directed at the Commonwealth Government that will take office after the election that must be held, at the very latest, by May 1988.  It is described throughout simply as "the Government":  the Government should, if the Government wants to, and so on.  In fact, of course, the purpose of the book is to influence the political debate before the election as well as the actions of the Government after it.

Great efforts were made to keep Mandate to Govern neutral as between political parties, and the prejudices of the parties were largely ignored as the policies were developed.  The main reasons for this are:

  • The imperatives are for most politicians, broadly speaking, the same:  re-election, power, office, and the national interest, not always in that order.
  • The policy difference between the major parties must always be comparatively small, as they are competing for the same swinging voters.
  • The problems will be the same no matter who forms the next Government.
  • Tackling them will take longer than one term of government, and perhaps longer than one side can retain office.  Even the Mandate Government will make mistakes and grow stale.

In a few places, the special difficulties of one party or other in implementing a policy are discussed.  But in general the Mandate Government is assumed to be one of no particular party, with, among its members, the usual proportions of talented and untalented, of dedicated and of selfish, of idealists and of cynics.  Its advantages over its predecessors are assumed to be only, first, an electoral mandate to implement policies like those in this book and, second and thanks to those policies, a firmer idea of what it wants to bring about and the limits of what can democratically be done than any government in recent Australian history.


2.2 NO VISION SPLENDID

"An idea of what it wants to bring about":  if we do not know where we are going, we cannot tell if we are going in the right direction;  every reformer must have an ideal.  Too often, though, those who promise to lead us to Utopia take us instead to the Gulag.  Concentrating on the light on the hill, even the best-intentioned revolutionaries ignore the suffering they cause around them.

The authors of this book have no vision splendid to share.  All they offer is the inefficient, slow, sometimes squalid mechanisms of liberal democracy.  Winston Churchill put it best:

Many forms of government have been tried, and will be tried in this world of sin and woe.  No one pretends that democracy is perfect or all-wise.  Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. (3)

2.3 LIBERAL DEMOCRACY

There is no simple, universally-recognised expression to describe this ordering of society that despite its faults is superior to any other.  "Liberal democracy" has been used throughout Mandate to Govern.  Other possible terms are:  "parliamentary democracy", which strictly speaking rules out the USA and Switzerland;  "constitutional democracy", except that communist countries tend to have very democratic constitutions on paper;  "Western democracy", not the best way to describe Australia, which lies due south of the Far East;  and Karl Popper's "the open society".

Some examples will help.  One is the quotation beginning section 2.1 of the Foreign Affairs and Defence chapter, contrasting the way Mr Reagan was publicly called to account for the "Iranagua" affair with the absence of similar constraints on Mr Gorbachev.  Another example is provided by this book, which was written and published without the thought of having to get permission from government crossing the mind of anyone involved.  In many countries, permission would be needed;  in more than a few, to express criticism of the kind implicit in such a work would jeopardise the lives or liberty of those involved.  A third example is provided by Prime Minister Whitlam, who, in spite of his rhetoric, in spite of the rage stirred up in his supporters, went peaceably when he was dismissed.

This brings us to a fundamental characteristic of liberal democracies:  effective mechanisms whereby power can and does change hands, and public opinion influence public policy, peacefully and as a matter of course.  Another fundamental characteristic is the rule of law, illustrated by the Reagan-Gorbachev contrast but also including restraints on the power of government and especially on the discretionary power of officers of government.  A third is the presence of numerous, independent centres of power and allegiance, none of them above the law.  There are many others.  But all of them come together into a complex of rights and freedoms enjoyed by individual citizens, which are desirable for themselves and have also brought about the material prosperity that permits the poor in the West a standard of living comparable with the average in communist countries and well above the average in the Third World.  Liberal democracy is a way of ordering complex human societies preferable to any of the others that have been tried.

There is no such thing as a perfect liberal democracy, on earth or in the imaginations of those responsible for Mandate to Govern.  There is too wide a variety of constitutions among existing liberal democracies (Switzerland, the United States, the United Kingdom, for instance) for a preferable institutional structure to be stated;  and in any event it is not the institutions that matter but the outcomes.

In Australia, the outcomes leave something to be desired.  This is true both of the economic and social problems mentioned above, and of the way in which the institutional structure permits many interest groups to influence government in their favour at the expense of the general interest.  Among these groups are the public service bureaucracy, certain business organisations, and parts of the trade union movement.


3. PRIORITIES

The Government's first priority must be to reduce public-sector spending by enough to achieve balanced budgets by the end of its first term (see the Macroeconomic Policy and Government and Administration chapters).  The second must be to unleash innovative and productive forces by removing rigidity in labour market and product markets (The Labour Market, Trade and Industry, and Transport chapters).  Third comes rebuilding a credible defence capability (Foreign Affairs and Defence).


4. STRUCTURE

Each of the next fourteen chapters looks at a major policy area.  They are divided into numbered sections for easy reference.  The final chapter, Policy Management, looks at the problems a reforming government, or reformers within a government, face in implementing their policies.  Each chapter begins with a general discussion of the policy area and the special economic or political problems it presents;  then follow discussion and policy recommendations for particular issues, activities or organisations.

In the policy chapters, major policy recommendations are
summarised in boxes like this.  Explanation and qualification are
in the adjacent text.

A few recommendations are not summarised in boxes:  they are either minor ones or ones that have much more to do with long-term policy directions than with action in the first term of government.

Boxes like this enclose the most important policy recommendations


Boxes like this simply contain facts and figures relevant to the
adjacent text.


5. OMISSIONS

The text of this book occupies 224 pages.  A busy Royal Commission can fill ten times that amount discussing one small corner of government activity.  Much has been omitted, much has been compressed in the task of making Mandate to Govern short enough to be read and cheap enough to be bought.  The aim has been to present the most important policies with enough economic or political background to justify them, rather than just produce a detailed list of "things the Government should do".

There is no discussion of immigration policy.  Not enough work has been done on long-term social and economic effects for policy recommendations to be made with any confidence;  and the sort of policy change that could actually be achieved in the short term would be unlikely to have significant large-scale effects in the first term of government, whatever its direction.

There is no discussion of the Australia Card.  As the book went to press the legislation had recently been defeated in the Senate and seemed likely to meet the same fate if reintroduced in 1987.  The Australia Card itself was in any case a side issue.  The key issues are the extent to which the activities of citizens should be monitored by government, and the extent to which this is made necessary by government's so far insatiable appetite for taxpayers' money.

There is no discussion of "the family" as such;  but many policies, especially in the Welfare and Education chapters, are designed both to support and to benefit from the position of the family as the fundamental social agency.

Most other policy areas omitted have been left out because they are comparatively unimportant, or because they are the responsibility of the States.  After finishing this book the reader should have little difficulty in devising Mandate policies for other areas.


ENDNOTES

1.  H. Hughes, "Australia and the World Environment -- the Dynamics of International Competition and Wealth Creation", in J.A. Scutt (ed.) Poor Nation of the Pacific:  Australia's Future, Sydney, Allen and Unwin, 1985.

2.  See the Macroeconomic Policy Chapter.

3.  House of Commons, 11 November 1947.

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