The re-election of the Labor government of Prime Minister Bob Hawke Saturday is bound to rekindle rather than extinguish debate down under about Australia’s “New Right.” The growing popularity of this movement – which has little in common with its American namesake – was best exemplified by the one area where the opposition could claim popularity: its campaign to lower taxes and cut government spending.

Yet the defense of the statist status quo often has reached the absurd in Australia. For example. we have it on no less an authority than Australia’s leading academic, Veronica Brady, that Mick Dundee, hero of the popular film “Crocodile Dundee,” mirrors the New Right’s approach to life. According to Ms. Brady, Mick Dundee “has a lot in common” with Australian businessmen Rupert Murdoch and Alan Bond in that “he gets what he wants.” What’s more, Mick is not really interested in the social plight of women or Aborigines. He lacks political commitment. All this plus his resort to violence put Mick Dundee well and truly in the New Right camp.

Although such comments are self-evidently exaggerated, they do illustrate the irrationality surrounding the debate on the New Right, a fledgling neoconservative movement in Australia arguing for market-oriented reforms. In particular, this movement has argued for drastic cuts in government expenditure and regulation; substantial reductions in income and company taxation; the withdrawal of the enormous legal privileges trade unions enjoy; the liberalizing of Australia’s rigid and centralized industrial relations system; the encouragement of employee share-ownership schemes to encourage workers to become capitalists: the selling-off of state-owned enterprises: decontrol of restrictions on private firms competing with public ones; a rapid decoupling of industrial protection; and a social program of support for the family, a crackdown on crime and unequivocal support for the Western alliance.

Now, in today’s Australia these are fairly mainstream views, and such popularity as Prime Minister Bob Hawke enjoys owes itself to his party’s drift in this direction. In an economic environment of high inflation and interest rates, excessive current account deficits and increasing debt, moreover, such a program offers a reasoned and moderate response to Australia’s economic crisis. Opinion polls indicate that this market agenda enjoys wide support.

At the same time, however, those who publicly advocate these views – for example, Ian McLachlan of the National Farmers’ Federation and businessmen such as John Elliott – have been vilified, as have the leading Australian figures in the various conservative think tanks. The hostile reaction to such views at times borders on the hysterical.

The debate on the New Right exploded in Australia in mid-1986 at a time of perceived economic crisis. The Australian dollar was plunging and interest rates were soaring. Treasurer Paul Keating took to the airwaves to warn of the possibility of Australia’s becoming a banana republic.

At this time it was becoming increasingly clear that the platform offered by those labeled the New Right offered the only long-term economic hope for the nation. Even the Labor government, originally elected in March 1983 on a platform of high spending and pro-regulatory policies, found itself drawn inevitably to this conclusion, but because it was a Labor government with a strong Socialist faction it was unable to admit this publicly. Indeed, it was Labor (with the support of the conservative opposition) that deregulated the Australian financial system and floated the dollar. These initiatives were widely acclaimed by the free-enterprise lobby in Australia.

When the economic crisis hit in the middle of last year, Prime Minister Hawke had no alternative but to move down the path of reduced spending and lower deficits. Not surprisingly, this plus his other market measures upset the left wing of his party. Thus there was a need for a scapegoat, and the New Right became Labor’s bogyman. By contrasting its own medicine with the alleged poison of the New Right, Mr. Hawke was able to move the Labor Party toward market reforms without totally alienating its own left wing.

The prime minister himself was first into the fray with a hysterical attack on the “political troglodytes and economic lunatics” of the New Right. They were, we were told, “theoretical irrelevancies” but nevertheless “very dangerous ones.” Within days his trade minister, John Dawkins, added that not only was the New Right “unpatriotic” it also was “treasonable.” On it went. A leading trade-union official who was until recently a member of the Australian Communist Party, John Halfpenny, compared the New Right to the Ku Klux Klan.

Nor were they the only ones. Max Teichmann of Melbourne’s Monash University declared on national radio that “if you look at the programs of Hitler and Mussolini… you know… where much of the New Right really comes from.” Then the radical Christians had a go with an article in the journal Australian Outlook warning that it would not be too Jong before the New Right turned the nation into an “authoritarian fascist state.” None of these people ever stopped to think that the Nazis and Fascists were self-professed socialists.

In short, a political label from the U.S.-where it refers to a fundamentalist Christian agenda-has been imported into Australia and applied to a completely (Different phenomenon solely to discredit those arguing for badly needed free-market reforms. This tactic will not succeed in the long run. What was heresy only a few years ago is fast becoming fashionable orthodoxy. To use a familiar phrase, Australians are being mugged by the harsh reality of the world economy. This has had its effect on the economic and political programs of even Labor.

Indeed, within days of its re-election, Mr. Hawke’s government has announced wholesale changes in the Australian Public Service. The existing structure will be rationalized and the number of departments reduced from 27 to 17. Mr Hawke and Mr. Keating now are preparing for the sale, of government assets on a grand scale.

That a Labor government is looking seriously at large-scale privatization and further reductions in the public sector demonstrates how the political tide is changing here. Saturday’s defeat of the conservative opposition parties was not a rejection’ of their policy platform calling for tax cuts and spending reductions – it was a reflection of the electorate’s doubts that such policies actually would be implemented. For all its scare-mongering about the New Right, the Australian Labor government today is adopting many aspects of the New Right agenda, the main exception being industrial policy. The next three years will see even more common-sense reforms, in the Australian economy.


Published in the Wall Street Journal