The Mega Perspective

Good journalists still exist. It’s just that these days,with few exceptions, they tend to exist despite, rather than because of, the media organisations that employ them.

One is Laura Tingle, who continues to write penetrating and original analysis of politics. Another is George Megalogenis, whose sober, measured style and grasp of historical detail make him one of the few remaining reliable chroniclers of Australian political economy (and one of the few reasons, if any, to read The Australian).

Megalogenis’ new book ‘The Australian Moment: How We Were Made For These Times’ provides what’s missing from most of the heavily spun factoids and cut-and-paste narratives of the daily media noise: historical perspective and global context.

While most economic commentators in Canberra write as if the world ends at the outskirts of Queanbeyan and as if that world is made anew each day, Megalogenis appreciates both the global forces that pushed Australia around like a cork on an ocean these past four decades and, correspondingly, the courage of those who reformed policy amid uncertainty.

In his reading of the early ’90s recession (one that was more severe in Australia than in America), Megalogenis notes that this was the downturn that purged inflation from the system (Keating’s ‘recession we had to have’), just as the legendary Federal Reserve chairman Paul Volcker had done in the US more than a decade before.

“While the inflation-beating…Volcker became an international hero,” Megalogenis writes,”Keating’s equivalent contribution in Australia in the early ’90s receives no praise because it suits the conservative side of politics to treat him as an ogre, and because there was an undoubted element of policy error involved.”

Again and again in the book, George highlights times when our politicians made courageous policy decisions that tested the support of the core constituencies, but which nevertheless proved in time to have been the right thing to do. On the flipside, he shows how a lack of courage due to short-term political considerations had long-lasting negative consequences.

For John Howard, both tendencies were evident – the first, in his staring down of the gun lobby after the Port Arthur Massacre; the second, in his refusal to condemn Pauline Hanson – an opportunist response that Megalogenis says created a monster. Again, the latter tendency was evident later in his prime ministership, when he frittered aways the windfall of the first mining boom by throwing billions at the electorate.

Indeed, Megalogenis – in the sweep of the book – reveals how both good and bad policy outlives the political cycle. So while Howard benefited from Keating’s inflation-purging recession, he also had to take the hard choice on introducing a consumption tax that Keating had been unable to get past Hawke.

And while Rudd benefited from a budget returned to surplus by Costello – so he could take Ken Henry’s advice and “go hard and go early” with stimulus when the GFC hit – he should have more of a warchest than he did. That was because Howard, in his late term counter-cyclical giveaways, had spent the proceeds of the first commodity boom before the money had arrived.

“The Rudd government deserves credit, primarily because it took the advice given to it to deploy the fiscal buffer it had inherited from the Howard government,” Megalogenis says. “A re-elected Coalition government might not have been so willing to listen.”

Megalogenis spares his biggest praise for the unsung heroes of  Treasury and the Reserve Bank, who through several crises over recent decades, have provided astute counsel to politicians and proved resistant  to international policy convention (like when the RBA refused to panic and raise interest rates during the Asian crisis of the late 1990s as the Aussie dollar dropped precipitously).

Ultimately, the book reveals that Australia’s relative fortune in recent decades has been as much about hard work and courageous policy choices as about good luck. It shows how much of what has happened has been shaped by large, historical and global forces that make change inevitable. And it shows how politicians can either direct those forces for the benefit of the greater good, or leave the resulting mess to someone else.

This book is an antidote to the misleading and misinformed, short-termist political noise that comes stillborn out of Canberra every day through the media. By showing the historical arch of our modern economic story, it exposes the self-serving fakery of so much of the stale two-party political “conflict” we live with each day.

My recommendation is swear off the media for a week and read this.