Wayne Swan”s apparent addiction to Bruce Springsteen certainly cut through last week. Very few treasurers get such media attention away from the budget or a financial statement. And very few orations receive the coverage obtained by the 2012 John Button lecture.

What was revealing, however, was not what Swan said about the rock star called “The Boss” but what he did not say about the person Labor comrades call “The Leader”. Namely Gough Whitlam, Labor prime minister from December 1972 until November 1975.

Swan pointed out that his direct involvement in politics began in May 1974 when he joined the University of Queensland Labor Club. He remembers this as “the time of the double dissolution election that Gough Whitlam fought and won”. And so he did. Labor was returned to office but failed to obtain a Senate majority.

That”s one way of remembering 1974 and all that. There is another: 1974 was the year that Whitlam Labor lost control of the economy. By 1975, following the appointment of Bill Hayden and Jim McClelland to senior economic portfolios, Labor was beginning to get the economy under control. But, politically, by then the damage had been done and the end was near.

The statistics tell the story. In 1974-75 Commonwealth outlays increased by close to 50 per cent. This equated to an increase in spending of more than 5 per cent of gross domestic product in just one year. Taxes rose by close to 30 per cent and the budget deficit increased substantially. The economic disaster that was 1974 is documented by John Kunkel in the December 2004 issue of The Sydney Institute Quarterly.

The economic failure of Whitlam Labor had a searing effect on an earlier generation of Labor leaders – particularly Bob Hawke and Paul Keating. In The Hawke Memoirs (1994), the former prime minister wrote that Whitlam “was frightened by economics and finance” and accused his government of “fiscal profligacy”.

Writing in the Herald on November 13, 1987, Keating maintained that Whitlam Labor saw spending initiatives as “the principal means of achieving greater equality”. When the international situation deteriorated, “the new spending programs and the ballooning wage claims surged on regardless”. As Peter Walsh (the former Hawke government finance minister) wrote in 1995, Whitlam Labor”s economic problems were “largely of its own making”.

When successful Labor politicians of the Hawke/Keating generation look back to 1974 they see chaos and ineptitude. But when successful ALP politicians of the contemporary era look back four decades, they rejoice in Labor”s victories of 1972 and 1974 and regret Whitlam”s dismissal and subsequent election defeat of late 1975.

For example, the likes of Kevin Rudd and Julia Gillard claim that they would never have gone to university if it had not been for Whitlam”s decision to introduce free tertiary education. This initiative was continued by Malcolm Fraser but scrapped by Hawke. The fact is that, as bright students, Rudd and Gillard would have won scholarships under the Commonwealth Scholarship Scheme which came into operation in 1951 under the Robert Menzies led Coalition government. This scheme covered tuition fees and provided a means-tested living allowance.

Just as Rudd and Gillard are reluctant to recognise the contribution to greater equality made by the Menzies government, Swan refuses to pay credit to the achievements in this area by John Howard. This is the case despite the evidence of his own speech. In his John Button lecture, the Treasurer commented that “while median household wealth in the US declined by 30 per cent between 2004 and 2010, here in Australia it had increased by more than 20 per cent over the same period”.

The last three years of the seven-year period occurred on Labor”s watch; but the first four were under the Coalition, where economic policy was driven by Howard and Peter Costello. Swan fails to publicly accept that Australia”s relatively strong economy has been built on the economic reforms that took place under the Hawke, Keating and Howard governments.

In his 2005 book Postcode: The Splintering of a Nation, Swan made some positive, albeit brief, references to the economic legacy of Hawke and Keating. But not Howard.

The essential problem with Labor since its election in November 2007 is that it is more like Whitlam than Hawke/Keating. Rudd and Gillard have significantly increased regulation across most areas of the economy, particularly with respect to industrial relations. In Whitlam”s time, the cabinet minister Rex Connor regarded the mining industry as led by hillbillies.

Today Swan is obsessed with castigating the likes of Twiggy Forrest, Clive Palmer and Gina Rinehart.

And Labor seems to be committed to a worthy but expensive National Disability Insurance Scheme, without having determined how it will be funded.

“The Boss” does not really matter in the Australian political debate. But the economic legacy of “The Leader” is still capable of doing real harm.

Gerard Henderson is executive director of The Sydney Institute.