Loss of vision.

Australia’s leaders forgot how to lead.

When Paul Keating moved out of the Prime Ministerial Lodge in Canberra on 21 March 1996 after showing John Howard around, a period of reform and vision ended and a new era of Australian political history began.

In all those 30 years, the ideas and promise of that period have never been recovered.

The story begins long before that time. It’s the story of how imagination and purpose created a new and better nation, and how that sense of purpose became corrupted, turning in upon itself as ideas of bold and risky reform gave way to comfortable stasis.

It had happened before. In 1949 the Liberal Party, created by Robert Menzies out of the shards of previous conservative groupings, gained power and stayed there for the next 23 years. The most notable event of its time in office was the attempt to ban the Communist Party.

Australian communists were far from the bomb-throwing murderers of popular imagination but they had gained power and influence in the trade union movement and in academia, but not in mainstream politics. They were riven by schism, particularly after Russia’s invasion of Hungary in 1957. Their real influence on Australian affairs was, at most, minimal.

But mere reality did not prevent the communists from being used as a convenient scapegoat. In 1951, just a year after Menzies became prime minister, the Communist Party Dissolution Act passed the federal parliament. But it wasn’t as simple as it looked: the High Court ruled that the Act was unconstitutional and a referendum seeking the power to ban communists, was rejected – albeit narrowly – by the Australian people.

For more than two decades after, the alleged communist influence within the Labor Party kept the ALP out of government; but when the change finally came, it was a big bang. Gough Whitlam became prime minister and a bewildering range of reforms occurred within the short-lived, chaotic government’s three years in office: universal healthcare, free universities, ending conscription and leaving the Vietnam war, an independent foreign policy, no-fault divorce, banning racial discrimination, legal aid, abolition of the federal death penalty, lowering the voting age to 18, aboriginal land rights, recognition of China, independence for Papua-New Guinea, environmental protection, arts funding … and so on.

Some of those reforms were rolled back by the Fraser Liberal government after Whitlam’s dismissal by the governor-general in 1975. But most of those were reinstated by the longer-lived Hawke-Keating government, elected in 1983.

Hawke and Keating, even more than Whitlam, changed Australia. That 13 years was the longest period any Labor government had spent in office. Perhaps most significantly, that government, with Paul Keating as Treasurer and then as Prime Minister, radically changed the nation’s financial structure. The dollar was floated, no longer tied to either the British pound or the US dollar. Compulsory superannuation was introduced: the pool of retirement savings now stands at around $4.5 billion. Regulations limiting the role of banks were wound back. Fringe benefits and capital gains were taxed for the first time. Tariffs were slashed, opening up the economy to competition. And industrial relations shifted from centralised wage-fixing to a system based on each enterprise, and on a wages and prices accord signed with the unions that limited pay increases in exchange for a better “social wage” – including Medicare and public education.

Then, in 1996, it stopped. John Howard, the incoming Liberal Prime Minister, described himself as the most conservative leader the Liberal Party had ever had. A decade earlier, he joined in the Asian immigration debate on the side of Geoffrey Blainey and Pauline Hanson. Howard used carefully coded language:

“I wouldn’t like to see it get greater,” he said. “I do believe that in the eyes of some in the community it’s too great, it would be in our immediate term interest and supportive of social cohesion if it were slowed down a little, so that the capacity of the community to absorb was greater.”

In few other areas of policy has the gulf between the two sides of Australian politics been more pronounced. Bob Hawke, as Labor Prime Minister, embodied the opposite attitude to Howard’s: generous rather than mean, open rather than closed, welcoming rather than rejecting.

“The web of consensus that protected and fostered these principles [of multiculturalism] for so long,” Hawke said in 1988, the bicentennial year, “has been tragically and dramatically ruptured by some members of the opposition parties who should have had the wisdom to avoid that rupture. The opposition parties have allowed the extreme views of a minority to fuel the same groundless fears and prejudices that spawned the White Australia policy so many decades ago. In doing so they have, directly or indirectly, fuelled the latent racism of a hostile minority in the community. There has been, during the period of this debate, a disturbing increase in the occurrence of racist incidents abuse, graffiti, broken windows, slashed tyres.”

Pauline Hanson was disendorsed by the Liberal Party for the Queensland seat of Oxley before the 1996 election for her openly racist remarks. But she stood, and was elected, as an independent. Her maiden speech was notable for its explicit racism:

“I and most Australians want our immigration policy radically reviewed and that of multiculturalism abolished. I believe we are in danger of being swamped by Asians. Between 1984 and 1995, 40% of all migrants coming into this country were of Asian origin. They have their own culture and religion, form ghettos and do not assimilate. Of course, I will be called racist but, if I can invite whom I want into my home, then I should have the right to have a say in who comes into my country.”

The reaction against an open nation and a non-racist immigration policy had simmered for a decade but, with that speech, came to a head. Its traces can now be seen in the current discussion of housing shortages, which are almost solely being blamed on immigration.

But a look at the evidence shows how hollow that accusation is. Governments have withdrawn almost entirely from providing new public housing, leaving a gap that cannot be filled entirely by profit-driven property developers. In the 1950s, one new dwelling in three was being built by government. Today, that’s down to 2%.

There are political risks in demonising migrants, as One Nation (and its poor-relation followers in the Liberal Party) are doing. The Liberals, at least, ought to know better, having lost a large proportion of migrant voters who once voted for them but who now support Labor. That dynamic was plain to see at the last election, when migrant-heavy seats helped the Albanese government back into office with a thumping majority. The most notable switch in support came in seats with large Chinese-born populations.

Despite claims by Pauline Hanson and others that migrants form ghettos, they mostly don’t. With the exception of Tasmania, the migrant population is fairly evenly spread across the nation.

Nor is it true to say, as Hanson did, that Australia is being “swamped” by Asians. It’s true that in some places Asian people are visible: in the Sydney CBD on an ordinary day, the next face you see is as likely to be Asian as Caucasian. But so what? There is no evidence of any recent significant or disruptive “ghetto” formation: the most recent that could get that reputation were refugees from South Vietnam at Cabramatta and Lebanese people in south-west Sydney, fleeing their country’s murderous civil war. But that was in the 1970s, half a century ago. Overwhelmingly Asian people fit easily into Australian society. Geoffrey Blainey thought the culture would be disrupted. In fact, it’s doing fine. We are still Australians, no matter where we were born.

The figures easily show that if Australia is being “overwhelmed” by anyone, it’s by … Australians. No other region of the world accounts for more than a small fraction, and the biggest of those fractions Europe. That includes Britain and Ireland.

Despite never-ending invitations to panic, migration continues to have strong support. The evidence shows the support has not materially changed over the past 20 years, despite the bursts of “populist” rhetoric. How popular, then, is this form of populism?

Breaking the figures down further shows the diversity of Australia’s immigrant population. This is not a monolithic crowd of lookalikes. In 2024-25, net overseas migration data showed that just over 300,000 people came from the whole of Asia, including both India and China. That represented just over two-thirds of all migration for that year.

Acceptance – and rejection – of the government’s migration policy have shown unusual gyrations, disrupted first by the pandemic lockdowns (when migration was stifled to almost nothing) and then by the post-pandemic catch-up and then by the issue’s shrill politicisation by One Nation and by the Liberals following in One Nation’s wake.

The underlying impact on public opinion is more difficult to see. Generally, support for migrants and migration has barely shifted, beyond the pandemic-induced bump.

The lack of vision is evident across the spectrum of Australian politics and is now producing cruel dilemmas, particularly in immigration but in many other areas too. The situation of permanently-temporary migrants is one. Right now, there are some 1.7 million people – six per cent of the population – on temporary visas. Many are working in jobs well below their skill capacities. They have little or no access to healthcare, secure housing or job security. The visa system gives to employers opportunities for gross exploitation. But Australia relies on these people to undertake a vast range of jobs, particularly in service industries like health and hospitality.

The current political debate is a classic case of victim-blaming. One Nation, followed by the Liberal-National coalition parties, want migration to go into reverse, despite clear evidence that the nation would suffer badly under such a scenario.

Research by the Committee for the Economic Development of Australia concluded that “recent waves of migrants have not had an adverse impact on the wages or jobs of Australian born workers”. So if migrants are not occupying jobs that Australians want, who would do those jobs if migrants weren’t available?

It’s basic stuff. But the centre-right of Australian politics is blindly pursuing populism rather than looking like an alternative government and the centre-left is all but mute. Vision?

But political vision implies that governments will do more than they do more at the moment. That means money, which also means, usually, taxes. The money has to come from somewhere.

For the federal government, welfare is the biggest expense (36% of the total) and health is second (15%). For the states, it’s health. In both areas, spending has risen sharply, far overtaking any increases in tax revenue.

A recent report from the Grattan Institute outlined the problem, and offered solutions:

“Over the past two decades, Australia’s national public debt as a share of the economy has increased almost five-fold,” the report said.

“Outside of the COVID pandemic, the last time Australian governments owed this much, the country was still paying off debt from a world war. And spending pressures will only build over the decades ahead. An ageing population will drive healthcare spending higher, and more frequent and severe natural disasters caused by climate change will present mounting bills for all governments.

“Australia’s current tax system can’t meet this fiscal challenge.”

The institute recommended significant tax increases, together with some offsetting reductions. But those recommendations will go nowhere. They are too politically difficult, and the Albanese government doesn’t like political difficulty.

As the chart above shows, the states’ share of debt is also rising rapidly. For the states, that’s disproportionately caused by rising healthcare costs.

As a nation, we need to raise more tax. The most obvious source is from exports of natural gas, currently taxed at minimal rates. The Australia Institute has calculated that a 25% tax on gas exports would raise $17 billion a year (almost $50 million per day) – enough to put the whole nation on a very difference fiscal course. That money could fund (for instance) free tertiary education for the whole of Australia. But the industry and its foreign owners, predictably, objected, and the government supported the global mining giants instead.

The Prime Minister, speaking to a mining industry conference in Western Australia, quickly ruled the option out. “It shows the Albanese government’s capture by the gas industry,” said independent senator David Pocock.

Once again: where’s the vision?

The examples keep on coming, but they add up to two things.

One: a government merely concerned with minding the day-to-day administration, blind to fundamental challenges, knowable and unforeseeable, that cannot be shirked forever.

And two: the people of this country have stopped believing their government will do the right thing. In 2010, OECD data showed 63% answered positively to this question. In 2024, 49% did. The trajectory is heading downwards.