In his political history of the 1980s and early 1990s, The End of Certainty, Paul Kelly articulated the tectonic shifts that occurred in Australian politics as a result of the breaking of the political settlement that had existed since Federation.
‘Labor and non-Labor underwent internal philosophical revolutions to support a new set of ideas – faith in markets, deregulation, a reduced role for government, low protection, and the creation of a new cooperative enterprise culture.’
These philosophical revolutions appeared to overturn the bipartisan consensus of the ‘Australian Settlement’, where both sides of Australian politics agreed on a framework of protectionist and paternalistic policies. The Australian Settlement – formulated around the White Australia policy, industrial protection, wage arbitration, state paternalism, and imperial benevolence – was ‘about the division of national income more than the generation of national income’.
The apparent new political settlement that emerged through the Hawke, Keating, and Howard governments did not just happen. Like the Australian Settlement it was replacing, it was the result of a debate about the different pathways for development open to Australians.
Kelly wrote that the ‘1990s will answer the fundamental question raised by the 1980s – whether this decade laid the foundations for a new settlement or was merely a misguided aberration’.
For a short while, it did seem as though Australia had come to a new political settlement in the Hawke through Howard era. But I don’t think there can be any doubt that this was, as Kelly posited might occur, simply an aberration. Really, the only open question is when it ended, with the Howard government or with the Gillard government (this is a topic for another, longer post, but I would argue that the beginning of the end, if not the end itself, was with the Howard government).
That is why when we wonder what the 2025 election means, the answer is not a lot. It could matter, but it doesn’t as much as it should. I don’t believe that if the current Liberal-National coalition won the next three years would look drastically different to what it would if the Labor Party wins.
As I have written previously, to many Australians ‘elections may feel like deciding which side will implement a mutually agreed set of outcomes rather than a contest of ideas and ideals’.
It is no wonder that Australians are dissatisfied with the two major parties, increasingly voting for independent candidates.
Australian politicians reached a new political settlement (or perhaps returned to a variation of the old Australian Settlement) believing that they can make state control of the economy and intervention in industry work this time around because they have a level of scientific and technocratic expertise that will allow them to manage things in a way they couldn’t before.
Both major parties support the goal of Net Zero carbon emissions by 2050, for example, which requires at best wholesale intervention in every industry and market, and at worst outright state control of society.
But it’s about more than Net Zero. When was the last time a Liberal, National, or Labor politician in Australia was asked to make some policy intervention and responded, ‘No, I don’t believe that’s the proper role of government and we will cause more harm than good if we try to do that?’
We are rarely treated to philosophical debates about the role of government or the place of government in society. We have come a long way from John Howard saying in 1983 that ‘the time has come when we have to turn Mr Justice Higgins on his head’. It’s mostly now just advertisements about who can better manage a mutually agreed set of policies.
This was pithily summarised by Joe Aston in the Australian Financial Review with an accurate but imagined exchange between Anthony Albanese and Peter Dutton:
Anthony Albanese: ‘I’ll spend another $8.5 billion on Medicare.’
Peter Dutton: ‘I’ll spend $9 billion on Medicare plus I’ll take back the port of Darwin.’
Albanese: ‘I, too, will take back the port of Darwin.’
There was a brief moment when it appeared that Peter Dutton was willing to do things differently. As I wrote in December last year:
The current Liberal-National coalition under Peter Dutton has shown signs that it may have the courage to break from the recent bilateral big state consensus. Not because of its announced economic policies, but because of its emerging cultural confidence.
In the Voice referendum and in the matter more recently of standing in front of the Australian flag to the exclusion of all others, Dutton appears willing to engage in a cultural fight with the Labor Party.
Ultimately, the question of state interventionism and bureaucratic technocratic managerialism is more of a cultural than an economic one. The economic outcomes of socialist systems have been completely discredited, but the ideology and values underpinning them was never defeated. They only can be in a cultural battle.
Whether or not Dutton (or anyone else) is willing to properly confront this in Australia before there is an actual crisis remains to be seen.
The debate about the Voice to Parliament was the first time in a long time that the major parties have had a substantial, philosophical disagreement about the future of Australia. The 2025 election campaign unfortunately did not contain a similar kind of philosophical debate.
By tomorrow evening, we’ll likely know who will govern Australia for the next three years. But we’ll have to wait a little while longer for who that will be to make a substantial difference.