Fightback! (policy)

Fightback! was a 650-page economic policy package document proposed by John Hewson, federal leader of the Liberal Party of Australia and Leader of the Opposition from 1990 to 1994. It represented the start of their new "dry", economic liberal future policy direction, very different to the keynesianism they previously practised. The package was part of their unsuccessful policy platform at the 1993 election.

Key elements

The key elements of Fightback! were:

• Radical changes to industrial relations, including the abolition of awards and the elimination of automatic entitlements to unemployment benefits after nine months;^[1]
• Radical changes to Medicare, including the "abolition of bulk billing except for veterans, war widows, pensioners, health card holders and the disabled" and the "provision of gap insurance for medical bills".^[2]
• The introduction of a goods and services tax (GST) at a 15% rate;
• A $13 billion personal income tax cut, directed largely at the middle and upper-middle income earners;
• A $10 billion cut in government expenditure partially offset by increasing other areas, including $3.6 billion in selected government programs on social welfare;
• The abolition of State payroll taxes and substantial cuts in petrol excise duty and proposed schemes for savings;
• The sale of a number of government-owned businesses.^[3]

Response

The 15 percent GST was the centerpiece of the policy document. Through 1992, Labor Prime Minister Paul Keating mounted a campaign against the Fightback package, and particularly against the GST, which he described as an attack on the working class in that it shifted the tax burden from direct taxation of the wealthy to indirect taxation as a broad-based consumption tax.

After a negative reception to the Fightback policies, Dr Hewson reconsidered Fightback! and relaunched it in December 1992. The major changes were to remove the goods and services tax on food and child care through zero rating and provision for a Rebuild Australia fund for new public works. Changes to Medicare, the $10 billion cut in government expenditure and Jobsback package of labour market reforms remained unchanged.^[3]

Hewson's difficulty in explaining to the electorate what food would and wouldn't have the GST applied was exemplified in the infamous birthday cake interview, considered by some as a turning point in the election campaign.

Aftermath

Keating won a record fifth consecutive Labor term at the 1993 federal election. In April 1994, Dr Hewson declared the Fightback! policy to be 'Dead and Buried'.^[3]

One month later in May 1994. Alexander Downer replaced Hewson as Leader of the Liberal Party.

A number of the proposals were later adopted in to law in some form, to a small extent during the Keating Labor Government, and to a larger extent during the Howard Liberal Government (most famously the GST), while unemployment benefits and bulk billing were re-targeted for a time by the Abbott Liberal Government.

See also

• Early 1990s recession in Australia

References

1. http://www.henrythornton.com/article.asp?article_id=3506
2. http://www.smh.com.au/articles/2003/05/16/1052885399735.html
3. http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/Publications_Archive/Background_Papers/bp9798/98bp01

External links

• Boyle, Peter, Hewson is a health hazard, Green Left Weekly, 24 February 1993
• Harrison, John, The GST Debate - A Chronology, Australian Parliamentary Library, Economics, Commerce and Industrial Relations Group, Background Paper 1 1997-98, 22 September 1997.
• Painter, Steve, What the Liberals would do to our lives, Green Left Weekly, 3 March 1993.
• Quiggan, John, Fightback and One Nation: A comparative analysis, Australian Tax Forum 9(2), 12754, 1992.
• Quiggan, John, Fightback without the Food Tax, Australian Financial Review, 12 December, 1992.