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How Malcolm Fraser lost his fiscal mojo

28 March 2015

9:00 AM

28 March 2015

9:00 AM

It was not only an evident reluctance to embrace economic reform that blighted Malcolm Fraser’s eight years of government and allowed the Hawke-Keating duo falsely to claim the reform initiative (rather than its implementation, to which they are entitled.) Characterised as a government of missed opportunities, a defining moment in Fraser’s premiership (nowhere mentioned in the Simons/Fraser hagiography) was the significance of the early defeat of the government’s ham-fisted attempt to wind-back the waste of the Whitlam years, which Fraser had been elected with a massive majority (of which I was one) to clean up. ‘He didn’t do anything to fix it’ is the lament from Liberals.

But it was the political discomfort of early party-room dissention that cooled Fraser’s ardour. In only the second party-room meeting in early 1976, Fraser announced the first steps in implementing his anti-waste promises to curb Whitlam’s unsustainable rise in government spending (sound familiar?) On the face of it, the proposal fitted his pre-election rhetoric perfectly; it was to cancel a program that cost more to administer than the beneficiaries received. The problem was that apart from being merely a token gesture (the all-up costs were only about $2 million), this first attack on Whitlam waste was directed entirely at aged pensioners – their $50 funeral benefit (for next-of-kin to ensure they received a proper send-off.) We were saving pennies at the expense of pensioner peace of mind when the fiscal problems were in multi-millions.

We marginal seat holders, all with enough pensioners enrolled to ensure our sacking at the next election, were dismayed that our first anti-waste gesture should be aimed at pensioners in their role as incipient corpses. We expressed the strong view that if this was such a dreadful example of waste, why not make it part of a compendium bill that also had a wider impact, not just on the most vulnerable in society. And for NSW MPs like me, there was also concern over the timing, as the state election was due within weeks and the two most critical seats were Gosford and the Blue Mountains, both heavily populated by incipient corpses.


Fraser was receptive and agreed to defer consideration for a week, but at the following party meeting said the bill must proceed as it was not possible to get a compendium one together in time and a failure to do so would surely be leaked from the party room (Billy McMahon’s photogtaphic memory would even enable the leaking of accurate quotes from every participant in the discussions) and that this would be a disastrous beginning for the government’s campaign to strike at the Whitlam waste.

There were serious rumblings of discontent when I informed the room that a friend in the Department of Social Security had told me the $1 million administrative cost of the funeral benefit was a modest price for saving multi-millions of dollars in pension cheques sent out to recently deceased pensioners that were unlikely to be recovered as relatives making application for funeral benefit were an early warning signal to cancel pension cheques for the dear departed.

Coalition party rooms work on consensus, not votes, but on this occasion the weight of the ministers (all owing their appointment to Fraser) was deemed by the PM to far exceed the view of the backbench. The legislation duly passed the Reps, but when it got to the Senate, six Liberal Senators took the view that the overwhelming objections of the party room should prevail and crossed the floor to defeat it. The funeral benefit survived, at the cost of Fraser’s omnipotence.

So we ended up with the worst of all worlds: we were shown to have been mean and heartless to the poor as well as being incompetent, while the Prime Minister’s authority had been demolished in his first serious encounter with the backbench. And those who wanted action against the Whitlam waste correctly began to lose confidence in Fraser’s capacity to deliver.

To rub salt into the wounds, the NSW Libs lost office by one seat to Neville Wran’s Labor Party to begin a lengthy spell in the wilderness. So the campaign to get rid of the Whitlam waste seemed to fizzle out and government spending ultimately resumed its inevitable rise. Vale Malcolm Fraser.

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