How Kennett gets away with it

[Green Left Weekly, #161, September 28, 1994]

Jeff Kennett's resounding election win in October 1992 marks a watershed in postwar politics in Victoria. The cutbacks and changes that his Coalition government has rammed through over the last two years have had a deep effect on the lives of the mass of ordinary Victorians.

At a basic level, there is no real incompatibility between the state Liberal-National Party agenda and that of the federal ALP government. Likewise, there are many important elements of continuity between the essential thrust of Kennett's policies and those of the preceding Cain and Kirner Labor administrations. However, utilising the confusion, disillusionment and demoralisation wrought by his ALP predecessors, Kennett has been able rapidly to push things a lot further.

Not so long ago, the term reform signified some measure that improved the quality of life for ordinary people. Today, in an Orwellian perversion of language, the media invariably describe every vicious, retrograde step of governments as a "reform". Cutbacks in social spending, privatisation of public assets, attacks on workers' wages and conditions — all these are "reforms" in the political dictionary of the media hack and the "free market" ideologue.

It is quite striking how the Kennett government has been able to implement a "reform" program of such massive scope and profound impact without any serious opposition and — at least, until the last few months — at minimal cost to its electoral popularity.

There is no doubt that since Kennett was elected, life for most Victorians has become more difficult, more uncaring, more stressful and far less certain.

The cost of 'reform'

Even a brief survey reveals the ruthless and far-reaching character of the Kennett government's austerity program.

Following its election, industrial relations was the Coalition's first priority. While the government's individual contracts system has had only limited success, with many workers transferring from state to federal awards, in other areas Kennett has achieved more definite results. By the middle of 1995, by the government's own estimates, some 40,000 fewer people will be employed in the public sector than in 1992 — a 20% reduction. The workers compensation system has been restructured by forcing out 16,000 injured workers and sharply reducing the options available for those injured at work.

In education, the government's own documents list its remarkable "achievements": teacher numbers reduced by 11,400 as of last July, $205 million cut from recurrent spending, capital spending to fall by $135 million annually by 1995-96 and some 260 primary and secondary schools closed (out of a total of about 2000). Class sizes have risen sharply. Cleaning and maintenance have been privatised, with predictable results. Principals have more power but despite the rhetoric of "devolution", ministerial control over the curriculum has increased.

By imposing the "case-mix" system of funding on hospitals, over $300 million has been slashed from the health care budget. Many hospitals, especially in rural areas, will be forced to close. Patients are being discharged prematurely. Hospital departments and services are being privatised. Services that aren't recognised under case-mix are being cut.

The ambulance service has been attacked through funding cuts and the licensing of private operators. A series of tragic patient deaths earlier this year showed just what this restructuring means.

Community services have been ravaged. Hundreds of welfare, rights and advocacy groups working with the disabled, tenants, youth and other disadvantaged sectors have lost all funding or suffered crippling cuts.

Thousands of public transport workers have been forced out of the system, and services have been cut. Tram conductors will soon be history. More stations are unstaffed. Some train lines have been closed or privatised. The bus system has been sold off. Fares have risen. Naturally, patronage has dropped.

While running down public transport, Kennett's enthusiasm for the motor car is undimmed. Through Vic Roads, the government has embarked on an orgy of freeway construction. A quarter of Melbourne's children suffer from asthma as a result of particulate vehicle emissions. On most days the city lies in a haze of smog.

Despite all their undoubted limitations, local councils do give residents some possibilities for trying to achieve positive changes or, at least, for attempting to stop negative ones. In a veritable coup, Kennett has forcibly amalgamated municipalities across Melbourne and replaced elected councils with appointed commissioners. Before the end of the year this scenario will be repeated throughout the rest of the state. There is no timetable for a return to elected councils.

Despite all the hype about tremendous savings and reduced rates, the new system will mean heavy cuts in services. The government has projected slashing 10,000 workers from local government payrolls (25% of the total).

The amalgamations and the regime of commissioners are explicitly focused on creating a friendly environment for big business. The ability of residents to stop commercial developments will be drastically reduced.

Urban-planning agenda

Imposing its big business-inspired urban planning agenda is at the heart of the government's restructuring of local government. Under the guise of stopping urban sprawl and increasing housing densities in the inner and middle suburbs, the government's VicCode 2 planning statute makes it radically easier for developers to override local opposition to the construction of highly profitable townhouse and apartment blocks.

The issue has become an acute one for residents in such comfortable eastern suburbs as Camberwell, Hawthorn, Kew and Malvern. Discontent even surfaced at the recent Liberal Party state conference.

Not only the housing developers but McDonald's and other fast food chains are seeking open slather in Melbourne's suburbs. In several recent high-profile cases, fierce opposition from residents forced local councils to reject applications from McDonald's. But projected new planning regulations will make it far easier for the fast food giants to open new outlets across the city. With McDonald's alone planning to open 12 new restaurants in Victoria each year over the next five years, the issue is obviously an acute one.

As well as easing the way for business in the suburbs, the Kennett government is promoting a number of huge projects in and around the central city: the Grand Prix (for which Albert Park is to be sacrificed), the newly opened Crown casino, Southgate and so on.

Privatisation of state utilities and other publicly owned assets is a key element in the Kennett agenda (as it is for the Keating federal government). The TAB has been sold off. Of somewhat greater consequence is the impending break-up and sale of the State Electricity Commission.

The government is committed to breaking up the present integrated system into six separate power generation companies which will then be privatised. While it raised tariffs by 10% last year, the government is now promising consumers that the cost of electricity will fall in real terms over the rest of the decade.

But, quite apart from the irrationality of the project from the viewpoint of society as a whole, it is very hard to reconcile such claims with the imperatives of privatisation. As Kenneth Davidson has argued in the Age, in order to give investors a satisfactory return, either electricity prices will have to rise significantly or the SEC's assets will have to be massively discounted to prospective purchasers.

For a government forcing through such a reactionary program, with such heavy social consequences, the law and the police assume an even greater importance than is normally the case. In these areas also, Kennett has pushed through big changes.

The government has chosen to regard its parliamentary majority as an absolute mandate to implement its program regardless of any opposition. It has sought to restructure or eliminate any bodies with a degree of independence which might in some way hinder it or serve as a focus for discontent with its policies.

Last year, for instance, the Equal Opportunity Commission was restructured and progressive commissioner Moira Rayner forced out. But attorney-general Jan Wade was forced to back away from an attempt to nobble the director of public prosecutions by giving him a government-appointed deputy with a veto.

Controlling both houses of parliament, the government has the power unilaterally to amend the state constitution. It has done this on 34 occasions, mostly to limit the ability of those affected to contest its actions.

The government's legal innovations have strained its relations with sections of the legal profession and the judiciary.

Prison sentences have been significantly increased, and the police have been given sharply augmented powers. The police can now demand that suspects provide their names and addresses and can take their fingerprints, by force if necessary.

'Vic Ltd'

Around the world, the broad agenda of capitalist public opinion is the same: slash the state sector, eliminate budget deficits, reduce social spending and radically cut the welfare system, privatise publicly owned assets, force down wage costs and make labour more "flexible". This "neo-liberal" or "economic rationalist" agenda flows from the needs of big capital — the giant corporations whose insistent demands dominate economic and, ultimately, political life in all Western countries.

Big business is demanding access to all profitable or potentially profitable sections of the public sector, lower wage costs, concessions and subsidies and reduced taxation.

Both the ALP and the Coalition seek to represent the interests of big business. Judging that the Cain and Kirner governments had sufficiently prepared the ground among the electorate, business turned to Kennett to launch a much more full-blooded attack on the working class of Victoria.

A revealing insight into just who is who in Jeff Kennett's Victoria and how the whole set-up works was provided last April by Rupert Murdoch's Herald Sun. Over several issues, this highly improbable source ran a "special investigation" into what it dubbed "Vic Ltd". A series of articles revealed "key links between the Government, private business, the bureaucracy and beyond".

Vividly illustrating these links is the "Rumour Tank", a monthly lunchtime gathering of key players from these milieus. As Kennett disingenuously put it, this forum "allows people, when they are free, to get together and discuss matters of shared interest".

Members of this powerful and exclusive club include:

  • Jeff Kennett;
  • Andrew Peacock, federal Liberal MP until his retirement last week and a political confidante of the premier;
  • Ron Walker, federal treasurer of the Liberal Party, former Melbourne lord mayor, a key figure in Crown Casino operator Hudson Conway and the prime mover behind the Grand Prix.
  • top business figures such as Tattersalls head David Jones, Western Mining's Hugh Morgan and Laurie Kerr, founder of International Public Relations and the person who originally set up the Rumour Tank;
  • media figures such as John Fitzgerald, a former editor of the Herald and an associate of Laurie Kerr, and Ranald McDonald, a 3LO broadcaster and former publisher of the Age;
  • retired Supreme Court judge Sir James Gobbo and QC John Winneke.

The Herald Sun reported:

As one leading businessman, not a Tank member, put it, they may not be the alternative cabinet but 'when they put their collective minds to it, doors open, cheques are signed ... things happen'.

It was at a Tank meeting that plans were hatched to snatch the Grand Prix from Adelaide, moves made to privatise Melbourne Airport and lobbying done for radical changes to local government.

Suggestions for who might make suitable candidates for key jobs are also tossed around.


Despite all the dramatic changes made by Kennett and the heavy burden they have placed on ordinary Victorians, support for his government has remained reasonably solid. However, the last few months have brought a significant slide in its popularity.

The latest Saulwick Age poll (September 14) shows the Coalition's primary vote standing at 46%, compared to 49% in August and 52% at the October 1992 election. Over the last month, Labor's primary support has risen four points to 38%, about what it received in 1992. However, not all those turning away from the government are embracing the ALP: many are looking to the Democrats, Greens and independents, whose combined basic support is now 16%.

Nevertheless, on a two-party preferred basis, the trend is clear: in July the Coalition led Labor 63 to 37%, now its margin is only 52 to 48% — a drop of 11% in three months. The main issues of concern for voters are clearly the deteriorating state of the health and education systems.

Age journalist Shaun Carney once referred to the "edifice-like" quality of the Kennett government. There were no scandals or, at least, none that did any serious harm, and there were no damaging public conflicts within the basic team. Kennett has indeed managed to run a very tight ship.

The government faced its biggest test at the beginning of September, when the National Party threatened to split over Kennett's decision to abolish the 76-year old uniform electricity tariff between city and country consumers.

Prior to the present coalition, the Nationals had not been in government for 40 years. Ironically, after resisting a partnership with the NP through the 1980s, when the Liberals finally did make a deal, they could have won comfortably in 1992 on their own.

But looking toward what is likely to be a much closer election in 1996, Kennett would have been extremely unwise to have dispensed with the Nationals. He worked out a peace deal with NP leader Pat McNamara: the uniform tariff will go, but not until the end of the decade, and a package of capital works and other initiatives will be developed for the country.

Kennett conceded very little to the Nationals. He was able to preserve the Coalition because the National Party MPs simply wanted something with which to cover themselves in front of the voters. As an Age report put it: "Many Liberal MPs were surprised that [National] MPs who had criticised the SEC plans now came out in support of what was basically the same deal."

Another Thatcher?

The British experience has some lessons for us. Margaret Thatcher dominated British politics for over a decade. Her success impressed itself upon both admirers and opponents. A real cult developed around her in some quarters; even sections of the left began to see her as the harbinger of a new wave of right-wing populist politics which the left could ignore only at its peril.

Four years after she was dumped by her own party in the wake of the poll-tax fiasco, it is plain that her "successes" were somewhat overstated. Her successor, John Major, inherited massive problems and has recorded the lowest popularity ratings of any prime minister since polling began.

Thatcher was able to get away with it for so long above all because of the right-wing policies and completely ineffectual opposition of the British Labour Party and the trade union officialdom.

One example illustrates this with complete clarity: in 1984-85 the country was rocked by the powerful miners' strike. The government went all out to break it. Masses of ordinary people solidarised with the embattled workers, but the Labour and union tops refused to give them any meaningful support, and in the end they were defeated. It could well have gone the other way for Thatcher, but she knew very well the mettle of the Labour and trade union leaders.

Hopefully, Jeff Kennett won't be around long enough to inspire a cult. However, his success so far or, at least, the lack of effective opposition, rests heavily on the right-wing politics of the Victorian ALP and the do-nothing, pro-ALP line of the Trades Hall Council. Moreover, it was the financial scandals of the Cain and Kirner ALP governments which provided Kennett with the opportunity he needed to win office in the first place.

There is no serious opposition in public life to the neo-liberal arguments which saturate the media. Endlessly we are told that the public sector is inefficient and that it must be run on business lines, that only the private sector is really efficient, that economic efficiency is the decisive criterion for everything — hospitals, transport, education. Just about the only journalist consistently sounding a dissident note amid this crescendo of right-wing propaganda is Kenneth Davidson in his Age column — and he is a Keynesian, not a socialist.

Critical moments

On November 10, 1992, just one month after Kennett was elected, there was a huge outpouring of opposition to the government's first batch of reactionary, anti-worker industrial legislation. Perhaps as many as 250,000 people demonstrated in Melbourne and other centres across the state. The protests were led by the Victorian Trades Hall Council and its secretary, John Halfpenny.

It was a critical moment for Kennett. His media supporters, while sympathising with the government's direction, advised caution.

It was also a critical moment for the anti-Kennett movement, the direction of which rested with the THC leaders. The only way to stop Kennett would have been to make Victoria ungovernable until the legislation was repealed. This was arguably a realistic possibility: the mass anger and outrage were certainly there. But the THC systematically diverted the movement into ineffectual and completely harmless channels.

There were several further mass protests in 1993, but these had a purely ritual character and merely served to underline the fact that the THC leaders did not want to fight Kennett. The sole perspective of Halfpenny and his colleagues has been to return a Keating government in Canberra and to elect an ALP government in Victoria.

However, at this stage, an ALP win at the next state election is far from a sure thing. Moreover, there is no reason to assume that a future Labor government would reverse any of Kennett's legislation or his sell-offs, closures and cuts. In fact, Brumby and the shadow cabinet have put forward a "financial management" document which, in a pitch for business support, commits a future ALP government to the same kind of economic rationalist agenda as the Coalition. Its fate will be decided by the party's state conference.


Kennett has had a very easy ride. He has implemented a program of deep spending and service cuts with minimal manifest opposition. Yet what are the longer-term political implications of Kennett's assault on the people of Victoria?

Even among people who have accepted his rationale for reducing government outlays, there are many who feel that things have gone too far. A Saulwick Age poll at the end of July asked respondents to rate government spending priorities. In Victoria 48% ranked reducing waiting lists for elective surgery as the main priority (compared to 39% Australia-wide). A further 24% put reducing class sizes as the number one aim. (More police was the top priority for only 15%.) The September poll again shows health and education as the key issues of public concern.

The generations coming to maturity in the postwar period expected that their children would live better than they did. Today these hopes are crumbling. It is futile to hope for a rebirth of the welfare state: it was the product of a long economic boom which will not come back. The only future facing ordinary people in this society is one of increasingly harsh austerity: "Vic Ltd" is a preview of things to come.

There is surely a huge store of resentment and anger building up in the community, even among sectors which have hitherto supported the government. The Labor Party hopes that this will bring it victory at the next election — irrespective of what it actually does.

Whatever the electoral outcome, two sets of illusions which have hitherto sustained the whole "free market" system are being eroded as never before, and this is profoundly positive. As austerity bites deeper and deeper, the brutal realities of capitalist society are becoming increasingly clear for more and more people.

At the same time, the sharp rightward shift of the Labor leaders and their trade union counterparts is exposing the futility of looking for any hope in that direction.

Beyond the pain and the confusion of the moment, the objective conditions are being created for the construction of a new, radical left-wing political party which can lead the fight to put the needs of people ahead of those of big business. Albeit unwittingly, Jeff Kennett is making his contribution to this process. That, we can safely say, is his only merit.