The Money Men Chris Bowen (the red fox clan .txt) 📖

and understanding that Hayden brought to the portfolio came too late to save the Whitlam government. Hayden would never have allowed the lunacy of the Loans Affair to occur on his watch. There were a few attempts from loan intermediaries to embark on these sorts of ventures when Hayden was acting treasurer. He would say that ‘a zoot-suited spiv selling the Sydney Opera House on a quiet Sunday afternoon would have been capable of making a more convincing offer’.29 Hayden understood that regardless of where the loan was sourced from, and which intermediaries were used, it was (to put it mildly) extremely ill-advised to borrow so much money for such a quixotic and unnecessary exercise as the government purchase of major stakes in mining enterprises. He also would have brought the federal Budget under control earlier in the term of the Whitlam government.

In considering Hayden’s legacy, it should be noted that his success in getting economic policy under control was partly due to the fact that having had three treasurers in three years, Whitlam could not afford to lose him. When Hayden indicated he would resign if not given the authority he needed for the job, Whitlam had little choice but to capitulate. If Hayden had been treasurer earlier, however, his bargaining power would have been reduced and he may have needed to follow through on his threat.

Both Crean and Cairns had, in their own ways, a troubled relationship with the Treasury, which did not serve the Whitlam government well. Crean would advocate the Treasury position in Cabinet but did not have enough sway to prevail. Cairns often did not bother to advocate the Treasury position, given he was just as likely to disagree with it. But Hayden had a good-enough understanding of economics that he could and would vigorously test the advice he was being given by Treasury. He also had enough standing to win the Cabinet over with the Treasury line when he advocated it.

There is much that Australia and Labor can thank Whitlam for. However, it is very clear that Whitlam needed a strong treasurer, with a clear and orthodox understanding of economic policy, to counteract his own predilection for grand schemes and nation building at almost any cost. He needed someone to apply economic rigour to his sweeping visions. Whitlam goes to considerable lengths in his autobiographical account of his government to defend his grasp of economics, to the point of being defensive on the subject:

It is fair comment that my own preoccupations and predilections lay beyond the narrower field of economic theory. I shared that with all Australian prime ministers. It is true that my education and self-education did not encompass deep study of economic theory. I shared that with most Australian treasurers.30

Not all of Whitlam’s colleagues took such a generous view. In one Cabinet debate, Whitlam dismissed Clyde Cameron’s contribution by asking, ‘What would a bloody shearer know about economics?’ Cameron was withering in his reply: ‘About as much as a classical scholar.’31 Hayden was confronted by Whitlam’s contempt for the restrictions of an orthodox approach to finance when Treasury opposed the prime minister’s plans to nationalise a private shipping company. Whitlam exploded: ‘Jesus Christ you Treasury people lack imagination: you lack creativeness. What I want is ideas. What I want is the dramatic gesture: like Disraeli buying the Suez Canal!’32 A prime minister with a ‘certain grandeur’ like this desperately needed a strong and rigorous treasurer to help sort out the worthy dreams from the catastrophic. He didn’t get that person until far too late in his government, when the damage was done.

Hayden wrote in his autobiography:

If we had served out the remainder of the term, another two years, I have no doubt as Treasurer I would have turned the economy around … Indeed the discipline embodied in the budget and the correct direction it took shocked Fraser, for he recognised that once it commenced to take effect the opportunities for defeating Labor would recede.33

Whitlam certainly agreed with this analysis, arguing in 1985 that Hayden’s Budget ‘showed the clear promise of further improvements in our economy. As most commentators accepted and as the Opposition privately admitted, the Budget had the stamp of responsibility. Fraser had to force an election before the Government regained the lead in public opinion.’34

Former Liberal adviser Gerard Henderson confirms that ‘there was some concern among some Liberal advisers that Bill Hayden’s promotion to the treasurership—and the arrival of Jim McClelland in the Whitlam ministry—would make it possible for Labor to get control of economic policy and help restore its own political fortunes’.35 It is worth noting that Paul Kelly disagrees with this view, arguing that Fraser blocked supply because the scandal of the Loans Affair guaranteed victory, not because he was concerned that the 1975 Budget threatened to turn the government’s fortunes around.36 It is likely, on balance, that Fraser would have blocked supply even without Hayden’s responsible Budget. However, it made the likelihood of Fraser blocking supply a certainty.

Whitlam was right when he described Hayden as the best treasurer of the 1970s (John Howard being his only serious competitor for the title). How much better would he have been, and how much more impact would he have had, if this man, the best treasurer of the decade, had had more than six months in the chair he was so suited to occupy? History should judge the brief but high-impact period of Bill Hayden as treasurer very well.

9

JOHN WINSTON HOWARD

A Treasurer Frustrated

Born: July 1939, Sydney

Treasurer: 19 November 1977 – 11 March 1983

THE ECONOMIC RUCTIONS of the 1970s did not provide smooth sailing for any of the eight people who served as treasurer over the course of that decade. John Howard, the last and longest-serving treasurer of the 1970s, was no exception. Young and relatively inexperienced, it took time for Howard to find his way, though his rise to the top of the economic portfolio was rapid: he was appointed treasurer at the age