In today’s AFR, Senator David Leyonhjelm wrote a very compelling and considered review of Prime Minister Howard’s legacy – Don’t be nostalgic for John Howard: he was a big-spending, big-government PM .
Like much of Senator Leyonhjelm’s writings, I found it difficult to argue with. But in as much as Senator L’s critiques of Prime Minister Howard seem justified, there is one thing that cannot be said of Prime Minister Howard; his governments did not turn the Sovereign Risk dial up to EXTRA HOT as have his 5 successors (counting Prime Minister Rudd twice).
And when I say sovereign risk, I mean more than just the risk of the government defaulting on its debt – which went from a net negative under PM Howard to a projected $600 billion under PM Turnbull in less than 10 years.
The randomness and caprice with which recent Australian governments have attacked citizens and private enterprise in the past 10 years has been breathtaking. In a very very light Venezuela style, but still Venezuelan.
Let’s have a look:
- Internet services previously provided by private enterprise now to provided by a state owned corporation.
- A new international airport to be built, owned and operated by the Commonwealth Government.
- Mining leases in NSW confiscated by the government without due process (ICAC is an arm of the executive and not the judiciary).
- Retrospective taxes on deployed mining investments.
- A government bank regulator forcing banks to increase retained earnings followed by a government hitting total (now increased) retained earnings with a new tax.
- Assets sold to foreign buyers with pre-approval by FIRB subsequently blocked.
- A new domestic gas reserve policy with gas extractors having entered into sale agreements.
- A national energy policy adding inconsistency and unreliability to the network.
- A bias to increased business taxes and business regulation
For a country that is so so so depended on foreign capital, it is amazing how inhospitable our governments a making us.
One has to wonder what is going on when it increasingly appears safer to invest in Argentina than in Australia.