Green light on Howard's Way

John Howard

If you are a pessimist, John Howard is about to force the disabled out to work, chase single mums out of the home, slash minimum wages to Third World levels, crush unions, turn schools into conservative production lines, throttle student dissent and bring the states to the heel of federal power.

If you are an optimist, Australia's second-longest serving prime minister is going to hand new levels of independence and freedom of choice to his 20 million citizens, unleash their potential, and break the bureaucratic chains that have shackled the nation since it was formed by the melding of six separate colonies just over a century ago.

However you view it, Howard's Way will become reality come July, when the new Government-controlled Senate gets down to business. Government control of both Houses of Parliament, delivered for the first time in two decades at last October's election, gives him the absolute mandate to finish reshaping Australia to his will.

Even without control of the Upper House during his three previous terms, Howard has, since 1996, dramatically changed Australia, overhauling tax and industrial laws, forming family policies to a new conservative mould, and infusing his vision into everything from the constitutional relationship between Canberra and the states to foreign policy.

Howard, once a staunch defender of states' rights according to grand Liberal tradition, is now assuming more power for central government than any prime minister before him.

It is a battle of ideology as much as of wills. "After nine years in office, we are more determined than ever to engage in the battle of ideas," he said in a major policy speech this week, outlining a programme that is now being described as "new federalism".

Dismissing claims that he is embarking on a huge transfer of power, Howard said his aim was instead to release the tourniquet on national potential: "Where we seek a change in the federal-state balance, our goal is to expand individual choice, freedom and opportunity, not to expand the reach of the central government ... The goal is to free the individual, not to trample on the states."

In Western Australia, Premier Geoff Gallop summed up the feelings of his fellow state leaders, all of whom, like Gallop, are Labor: "There's no doubt about the fact that what John Howard's talking about is a grab for power, pure and simple. John Howard is drunk with power."

The sentiment has been echoed by unions, teacher and student organisations, pensioner groups and social welfare and community organisations. This week Treasurer Peter Costello browbeat the states into submission on tax reform by threatening to cut off the flow of federal funds; yesterday the federal Cabinet met to discuss sweeping changes to social welfare to drive tens of thousands of disability and other pensioners back into the workforce.

Much of Howard's agenda is already in place. Compulsory student unionism is now banned, and conservative values have been imposed on education through new policies for literacy and numeracy, assessment and presentation of reports, teacher training and school curriculums. Flagpoles are compulsory.

States have been bypassed by Canberra's decision to abolish the federal-state National Training Authority and to set up separate Commonwealth technical colleges. Funds for local councils will also flow directly from Canberra, rather than through the states. Federal workers' compensation schemes will further draw employers away from the states.

Howard is not the first prime minister to vent his frustration on the states rights under the constitution.

Bloodletting between Canberra and the states has been a constant since federation, creating a maze of differing laws and regulations and adding billions to the cost of providing essential services through duplication and horrendous inefficiencies.

Labor's Bob Hawke, the nation's third-longest serving prime minister, told a conference in Auckland in March that the nation had been "buggered up" by a system that reflected the meanderings of colonial explorers, and that New Zealanders would be out of their minds to inflict that on themselves by seeking political union with Australia.

Howard's view was that while Australia may have done things differently if it had its time over again, federalism was a fact of life and he had no intention of attacking it. Instead, he made it clear it was all a matter of interpretation.

The federal constitution sets out a form of separation of powers between Canberra and the states, all of which retain their own separate constitutions, vice-regal representatives, parliaments and laws. While the constitution lists 40 areas in which Canberra can pass laws, the legislative powers of the states are not defined.

In practice, if there is a conflict between federal and state laws, Canberra wins. It can use international treaties to force its will, as Hawke did to protect Tasmania's Franklin River in the 1980s, or other, broader, powers, such as Howard intends to do with corporations law to abolish state-based industrial awards.

The most recent battle over state taxes demonstrates just how powerful is Canberra's hand when matched with an iron will. When GST was introduced, the states agreed to abolish a range of taxes in return for a share of the ensuing river of gold. This week, after years of wrangling, Costello simply said, "dump the taxes or go broke". Resistance collapsed.

"When I think about all this country is and everything it can become, I have little time for state parochialism," Howard said.

NOWHERE is this more apparent than in the looming battle with the unions. Howard has already severely curtailed their power by banning compulsory unionism and encouraging non-union employment contracts. Now, with the Senate in his palm, he will attack protections against unfair dismissal.

Even more significantly, he will effectively kill state-based awards and radically reform the national wage-setting machinery.

This week the Industrial Relations Commission began hearing what might be its last minimum wage case, in which the Australian Council of Trade Unions (ACTU) is arguing for a 70Ac (75c) increase in the minimum A$12.30 ($13.09) an hour rate. Employers and the Government want less than half that.

Howard intends changing this system. Unions have made much of Workplace Minister Kevin Andrew's statement that minimum wages were A$70 ($74.51) a week higher than they should be, and Howard's intention to use corporations law as the constitutional tool to force workers out of state and into federal awards.

Once there, ACTU secretary Greg Combet warns, the Government would legislate to hinder pay increases and abolish conditions such as work-related allowances, bonus payments, higher pay rates for skilled work, jury service leave, public holidays and notice of termination. Collective bargaining would be discouraged, and union rights and access in workplaces would be severely restricted.

The Australian Council of Social Services (Acoss) also warns of risks to working Australians, especially if the system setting minimum wages is curtailed or abandoned. "In the US a low-skilled worker works five days a week to earn the same wage an Australian worker on a minimum wage earns in three days," Acoss president Andrew McCallum says.

"You can imagine what such a change would do to our national poverty levels. It would be shameful."

Beyond industrial relations, Howard intends tackling social welfare to both lower its burgeoning cost and to push more people into a workforce acutely short of skills and whose participation rates fall below those of countries such as New Zealand.

Yesterday the Cabinet was discussing plans to cut benefits paid to sole parents and disability pensioners considered able to work in a bid to force them into jobs. The measures will aim to cut pension spending by up to A$288 ($306) million in the next financial year by severing existing rates of indexation and instead tying them to inflation, with lower rates of increase.

To offset this and help 230,000 single mothers with school-age children into the workforce the Government also intends a major increase in the number of subsidised places at childcare centres.

Whatever the cries of outrage, Howard believes he is on a mission of liberation and that these changes represent opportunity and freedom of choice. "Australians are a non-ideological, pragmatic and empirical people," he said. "They want governments to deliver outcomes, not make excuses. They want governments that take responsibility, not states of denial."

With the overwhelming vote that last October gave him both Houses of Parliament, few could deny that he has both the mandate and the power to do what he wants.