This is the full text of the Inaugural Sir Henry Bolte Lecture given by the Treasurer, Peter Costello, on August 15, 2001, at the Caulfield Racecourse.>
Text of Henry Bolte Lecture by Treasurer Peter Costello.
Mr Chairman, Ladies and Gentlemen
It is a singular privilege to be invited to deliver the first Sir Henry Bolte Lecture in honour of the greatest and most successful Premier in Victorian political history: six election victories and an unbroken run as Premier of this State exceeding 17 years. With a record like that, it is fitting to hold an annual lecture to perpetuate the memory and extraordinary deeds of a great Victorian and a great Australian. I congratulate those involved in the formation of the Bolte Lecture Trust and we are honoured to have present with us tonight members of the Bolte family.
We are honoured to have present with us tonight Sir Henry’s successor Sir Rupert Hamer, Premier of Victoria from 1972 to 1981. Sir Rupert, thank you for joining us.
We are also honoured by the presence tonight of The Rt Hon Malcolm Fraser and Mrs Tamie Fraser. As all here will know, Malcolm Fraser is second only to Menzies as the Liberal Party’s most successful Federal Leader, winning the profoundly important 1975 election and then being re-elected in 1977 and 1980. Malcolm and Tamie, I particularly want to welcome you here tonight.
We are also honoured to have in the audience Dame Margaret and Stan Guilfoyle. Margaret and Stan thank you also for joining us here this evening.
As this is the first of what I am sure will be many annual Bolte lectures, I thought it might be appropriate to record something of the early life of Henry Bolte and the upbringing which shaped his thinking1.
Bolte’s grandparents were German who fled from Prussian oppression in 1847, married in England and came to Australia around 1850. They settled near Skipton, not far from Ballarat, and had 12 children, the youngest of whom became known as Harry Bolte, the father of Henry.
Bolte’s father ran a gold mine at Pitfield and later acquired the Skipton Hotel before retiring to a small farm in 1924. His mother Anna, met Harry Bolte at Pitfield and they married in 1906.
Harry and Anna Bolte had two children, Henry who was born in Ballarat on 20 May 1908 and his brother, Bill. Henry Bolte’s first school was the Skipton State School and at 13 he was sent to boarding school at Ballarat Grammar. It was at school that he grew to love cricket. His well known love of horse racing was, however, hereditary. His father would take a three week annual holiday to attend the Melbourne Cup Carnival.
When Bolte left school he accepted a job at the Union Bank of Australia in Ballarat, but failed to turn up for work. He is said to have told his mother he would become an auctioneer, a clergyman or a politician. However, those lofty callings would have to wait. He started working as a rouseabout in a wool shed and, later worked in a draper’s shop his parents built in Skipton. He became Secretary of the Skipton Race Club, the local church, he led the football team and played for the local cricket team. This was the age of the volunteer.
In the depression years Bolte and his father went fossicking for gold and at 26 with help from his family he purchased a farm at Bamganie near Meredith which was home for the rest of his life.
In 1934, the year in which he bought his farm, he also married Edith Elder, known as Jill. They became lifelong companions. Bolte attributed much of his success in public life to the strength of his relationship with Jill and the support she provided him. He did not go far to find a bride. It was a case of marrying the girl next door, literally.
When the Second World War broke out Bolte joined the Australian Army on his third attempt, having been rejected on one occasion because he was running a farm and on the second occasion because he had flat feet. He was not allowed to serve outside Australia and spent 3 ½ years stationed at Puckapunyal.
In December 1944 Robert Menzies convened a meeting in Albury of the fragmented non-Labor organisations which formed the Liberal Party of Australia.
In 1945 Bolte (the only nominee to be the Liberal candidate) contested the seat of Hampden for the Liberal Party. He lost to Labor. Two years later he reversed that outcome and at the age of 39, Bolte was elected to the Victorian Parliament. Bolte became Deputy Leader to the Victorian Liberal Leader Les Norman and later to Trevor Oldham. In 1953 Oldham was tragically killed in a plane crash on his way to the Queen’s Coronation. Bolte became his successor and Arthur Rylah was elected as his Deputy.
In April 1955 Bolte moved a motion of no confidence in the Cain Labor Government, on the grounds that it accepted directions from sources which “….endanger the security of the country and the welfare of the State”. The motion was carried and on 20 April 1955 the Labor Government fell. It was the era of the great Labor split.
At the ensuing election which took place on May 28, Henry Bolte led the Liberal Party into government and became Premier of Victoria.
A new era began. Henry Bolte remained Premier of Victoria from June 1955 to August 1972, a record unbroken period of over 17 years. Bolte’s approach to economic management was non-interventionist and pro-private enterprise. At the start of his Premiership he declared: “We are going to prove to the people of Australia that fewer controls will mean greater advancement”. He promoted home ownership at every opportunity declaring: “The Government wants to create a population of little capitalists – home-owners”.
Bolte promoted home ownership wherever he could and encouraged the private sector to build houses and flats. During his period in office he promoted the sale of Housing Commission properties to their tenants. By the time he left office in 1972, per capita home ownership in Victoria was one of the highest in the world.
Bolte brought an extraordinary degree of stability to Victorian politics. In the 12 years prior to 1955, the Premiership of the State had changed eight times. From 1955 onwards it remained in the hands of one man for 17 years.
Bolte loved the medium of television to launch his political campaigns. He would book space on each station at the same time and he would often start his broadcasts by saying, “It’s no use you switching to another station because I’m on the lot. I’ve got you”.
Bolte was one of the first Premiers to promote his State overseas, which he did during every term as Premier. As a result of these trips he successfully encouraged a number of multinationals to expand into Victoria, including Ford and Volkswagen.
He brought the elections for the Upper and Lower Houses in the Victorian Parliament into line so that they would be held jointly; started Melbourne’s freeway system; oversaw the introduction of 10.00 o’clock closing; introduced .05 legislation; oversaw the construction of the Arts Centre; encouraged decentralisation; supported the development of Melbourne’s underground railway system; established the Environment Protection Authority; relaxed trading laws; introduced the consolidation of all Victorian statutes in 1958; set up the Victorian TAB and oversaw the 1956 Olympic Games. In 1969 he responded to a march by striking railway men by saying “They can march up and down till they’re bloody well footsore – it’s nothing to do with me”.
Unlike Menzies, Bolte had not undertaken higher education. Menzies was to say of Bolte’s extraordinary political success: “I have frequently thought about what might be the reasons for that success, and keep coming up with the same answer, that he was himself an average man with an uncommon faculty for communicating to average men: not from a lofty position but from one of equality with them”.
There were a few other secrets to his success. Obviously one of them was the Labor split. The DLP preferences that were directed to the Liberal Party throughout his term of office, were enormously significant. By 1972 when he retired the DLP vote was on the wane. Another was the way that the Liberal Party was able to make the homebuyers and young families of Melbourne’s east and south east suburbs its own whilst retaining a strong rural base in country Victoria best embodied by Bolte himself. Another was the good fortune to be in office during the long stable administration of the Federal Coalition led principally by Sir Robert Menzies.
The period of the late 50s and 60s was one of enormous growth in prosperity and living standards for Australians and Victorians. In 1955 there was one car for every 8 people in Victoria. In 1972 at the time of Bolte’s retirement there was one for every 3.2. In 1955 a standard new Holden car cost the equivalent of 63 weeks of average wages, by 1972 it cost 31. (Today there is one car for every 1.8 people and it will cost around 35 weeks of average wages to buy a new car but unlike 1972 it will have air conditioning, a sound system, and power steering). In 1955 unemployment was just 1.5% and in 1972 it was 2.3%. In 1955 inflation was 6% and in 1972 6.9%.
1972 was a good year to retire. It was the year of Whitlam’s election. In the 1974 Budget Frank Crean increased Commonwealth outlays by 41%. In 1974-75 inflation hit 16.8%.
By 1975 unemployment rose to 4.9%. The Commonwealth Budget which had been in surplus through the 50s and 60s was set on a deficit course for over a decade.
In the 1970s Australia was changing. One of the most controversial events during Sir Henry’s Premiership was the Ryan hanging in 1967. Ronald Ryan was convicted of murder of a warder, George Hodson, during a prison break from Pentridge in 1965. The penalty imposed for murder was death. Sir Henry was adamant that it be carried out. It was. It was the last time the death penalty was carried out in Australia. Sir Henry’s successor Rupert Hamer abolished the death penalty in 1975. Community attitudes had undergone a very profound shift.
And the Australian economy was undergoing a profound shift. Imperial preference was coming to an end as Britain joined the common market, the proportion of output based on agriculture was declining, the rise of Japan was leading to new markets in Asia, modern economies were increasingly diversifying into service industries.
Through the 1980s and the 1990s the step up in the speed of transport and communications fostered the growth of global trade and international investment. Increasingly this development has become described as globalisation.
I have argued elsewhere that globalisation is not a value it is a process. It describes what is happening. This process can be a force for good or ill just as a telephone can be used for good or for ill. It is not reversible. And this process is not new to Australia. In fact we can identify quite precisely when it started. It started on 26 January 1788 when the First Fleet arrived in Port Jackson bringing foreign investment, staple crops (first for subsistence and later to be exported), immigrants (mostly forced labour), and overseas technology.
Technology advances have made it harder and harder to seal off an economy in the modern world. Some have tried like the former East Germany, Albania, Cuba or North Korea. But sealing economies from investment, or technological transfer, or trade, brings enormous costs to a country’s standard of living.
Australia increasingly opened over the 80s and 90s to capital movement and trade and especially to technology. We have become a nation that very quickly adapts and uses new technology – the fax, the mobile phone, the personal computer.
But an open economy places much greater pressure to get economic policy right. External shocks hit trade and investment much quicker. To respond the domestic economy needs to be much more flexible. A country needs a competitive business environment so innovators can quickly take advantage of the opportunities as they open up. And the huge daily investment flows mean that there must be a coherent framework for conducting policy which is consistent and well understood.
That is why this Government after its election in 1996 laid down a medium term monetary policy framework that targets inflation over the course of the cycle. It is why we laid down a medium term budget framework designed to drive the Budget back into surplus. It is why we reformed the Australian taxation system, designed to give our exporters the same advantages that other countries give theirs, it is why we have overhauled corporate regulation.
Our opponents said that economic restructuring would not work. When we drove the Budget into surplus our opponents opposed every step along the way. They said that a balanced budget would create a recession. It didn’t. In fact when the whole of Asia went into recession in 1997 and 1998 Australia alone continued growing, protected by its strong fiscal position. This year will be the fifth consecutive year that the Commonwealth Budget is in surplus. You have to go back to Henry Bolte’s time for the last occasion when that occurred.
As we reformed the Australian taxation system our opponents fought us every step of the way. We put revenue collection on a systematic and broad indirect tax base, cut income tax, cut company tax, cut capital gains tax and abolished narrow indirect taxes. Our opponents said this would overheat the economy. Then they said this would send the economy into recession. Notwithstanding a slowing in world growth Australia’s exports have climbed and our forecast growth rates exceed those of Europe, America and Japan over the next year.
Fiscal and monetary reforms kept Australia’s inflation rate low. Even including the tax changes which have now washed out of the system with little second round effect, Australia’s inflation rate has averaged 2.3% over the last five years. This of course is lower than the inflation rates of Bolte’s time. And low inflation meant lower interest rates, the standard mortgage variable is now at 6.8%. You would have to go back to Bolte’s time to find an interest rate like that.
Although the Government has been frustrated by a hostile Senate we have driven industrial relations reform and made some important gains. Unemployment currently at 6.9% is lower than it has been over the last decade, but still higher than it was at the time of Bolte. Importantly for Australia if we are to reduce structural unemployment we need continuing industrial relations reform.
Australia is not immune from international economic developments. But the changes that we have put in place have put us in a better position than most countries. More importantly they mean we are much better placed than we would have been without these reforms.
Our productivity picked up in the 1990s but especially in the second half of the 1990s. During the 1960s growth in per capita income in Australia was trailing the OECD average by about 1%. During the 1990s, especially the late 1990s it exceeded and passed the OECD average by about ½%. Incomes have risen quite significantly and living standards are higher than they have ever been. Per capita income grew from $12,194 in 1955 to $18,584 in 1972 to $32,539 in 2000. This has brought social returns too. In 1955 the age pension was 20.9% of MTAWE. Today it is 26.1%.
So the first attack by the critics that economic reform would not work economically has been proven wrong. I will not take this further other than to make the obvious point. The idea that we should give away the gains of the past and handicap our opportunities in the future, that we should now rollbackwards, is dead wrong. It is cynical politics and would ultimately hurt those who are least able to protect themselves.
RECOVERING THE SPIRIT OF THE VOLUNTEER
But tonight I want to address another issue. Our living standards are higher than they have ever been, our standard of housing, our cars, our domestic appliances, our health services are better than they have been in previous decades, and our economic abundance has increased. Yet many people feel they are under more pressure than ever before, they feel they are working harder than ever before and they miss the sense of community that comes with a gentler pace of life.
Now some of this is nostalgia. Sometimes we tend to romanticise the past.
Were people really happier without the automatic washing machine when they hand scrubbed their clothes or fed them through the wringer. Were they happier when the standard working week was 44 hours and men went to work at the factory on Saturday morning and shops closed at lunch time, and the pub closed at 6 o’clock and they caught the train home to a two bedroom house with a five person family?
No one would seriously argue that people would be happier if they cut their incomes, moved into smaller homes, had their televisions confiscated and the video and internet banned.
But there is this sense that if there was less home entertainment, maybe less TV, video, Gameboy, CD-rom and internet then the children might spend more time playing games outside with their neighbours and the parents in the street would know each other’s names and the sense of belongingness would increase.
What economic prosperity has brought us is choices. So many choices that sometimes they are overwhelming. Once upon a time you could walk into a shop and order a cup of coffee. Now there is drink in, take out, coffee, mocha, columbian, cappachino, latte, or double soy chino. Will you take that with or without sugar, equal or nutrisweet?
One of the reasons the neighbourhood existed was that choices were more limited. Transport was limited. The neighbourhood was the geographic limits of how far children could go to play with each other or adults could walk to do the shopping. But with transport people can cross the metropolis or the State. They can choose their friends in a radius of 100 kilometres rather than 100 metres.
Of course the advent of the internet means that people can cross the globe pursuing a particular interest and are no longer bounded by any geographic limits at all. The cyber chat room replaces the neighbourhood fence as the place for a social conversation.
The dazzling array of choices means that the level of shared experiences tend to be less. Even our shared information may be declining. Our information is not declining. Maybe our shared information is. Once upon a time the widely read newspaper gave a town or a city a common reference point. Newspapers basically choose content, they prioritise information. Each morning a paper would put a range of information or opinions to its citizens. They might have different views but it gave them a shared reference to discuss or debate. But if I am getting my infotainment from one web page and others I deal with are getting theirs from different web pages there is no commonality, no common reference to discuss. We don’t start with the same menu. So while we are creating more individual choices than ever before this may be leading to a loss of the shared experience. And a feeling of belongingness goes with shared experience.
At this point somebody is going to ask, “Well – what is the Government going to do about that?”.
And here lies one of our biggest problems. The expectation that the Government should solve all of our problems or can solve all of our problems is a big problem.
Governments can deliver services, they should deliver reliable transport services, and high quality health services, and strong educational services. But Governments can’t deliver friendly relationships, harmony between parents and children, happy marriages.
I think there has been a tendency for Government to encourage the belief that it can solve any kind of problem. This inevitably leads to disappointment. People should not look to Government to deal with issues that it is not designed to deal with. I have always been a believer in limited Government. I don’t think it can solve the deep core issues of personal relationships, identity, family and love. If you limit the Government to what it can do it is likely to do that better and likely to do less damage than if it intervenes in areas where it has no competence.
I can remember that under some Whitlam scheme the Government began building community centres in local areas. Now, I have nothing against community centres and believe that fine facilities for games and meetings is a good thing. But there are community halls and mechanics institutes and CWA halls in country towns all across Australia. I’ll bet that in the early days the citizens in the community came together and built them, physically built them, laid foundations and put up the frame and nailed on the boards. And in later years the community would come together and fundraise and employ a builder to build them. And I’ll warrant that if there wasn’t a community before the construction started there certainly was after the locals had spent hours together at fetes and raffles and pie drives, working together to realise a common goal which they owned.
And then the Government began building community centres. And this was no doubt on the theory that if you built a centre a community would materialise to fill it. If you build it they will come. Individuals can build buildings but I don’t know that buildings can build individuals and their relationships. Individuals with a sense of personal responsibility and a shared experience and a commitment beyond themselves build a community.
And that is a phrase that you don’t hear too often in the political lexicon these days:- personal responsibility. There was Henry Bolte at 18, Secretary of the local race club and the church and captain of the football team. He wasn’t sitting around in Skipton waiting for the Government to build the community.
We need to remind ourselves that there is a whole sphere of life outside Government. And this is where important personal decisions are made and personal emotions are felt. There is a place where Government ends and the local church, or the family, or the Immigrant Elderly Citizen Association takes over. This is the place of the shared experience and the voluntary commitment. This is the place of the community. This is the place of the volunteer.
One of the most memorable features of the Sydney Olympics was that of the volunteers, the people who directed the spectators as they got off the train and went into the stadium. I met one lady I knew from Dubbo who had become a volunteer and was standing outside the stadium putting people’s bags through an x-ray machine. She didn’t go to watch the events or cheer in the stadium or earn a little part-time income. She went to Sydney from Dubbo and worked long hours for free because she wanted to give something to the Games. She wanted visitors to have a good time and to like Australia. She wanted to be proud of her country. After the Games were over there was a tickertape parade to thank those volunteers.
Last week at the Stonnington Town Hall I presented badges to volunteers in my electorate. There were over 500 people there, people who don’t get paid, and people who voluntarily choose to be involved in all host and manner of activities. This is beyond Government. This is the volunteer spirit. This is community. This is personal responsibility.
Community is shared experience. These days when schools want to build a shared experience between their students they take them out of their comfortable homes and throw them together on a camp to experience a bit of adversity. Going outside our homes to share an experience with the volunteer organisations of society is a big part of building community. We could revive the volunteer spirit in Australia – we could revive all these non-government community organisations – if each of us were to spend one hour per week in volunteer activity.
I’m not talking exclusively about charity work here, although that is a special kind of volunteer activity. I’m talking about the non-government voluntary organisations of Australia, the Rotary and Lions group, the Churches and Synagogues, the local sporting clubs, the Neighbourhood Watch, Opportunity shops, the Scouts and Guides, political parties, the CFA and SES, the Young Farmers’ Associations, and local libraries and school canteens and school councils, cultural associations and arts auxiliaries, landcare groups, and RSL’s, the book group, the thousands of non-government voluntary organisations that bring people together in a shared experience and build relationships and form a network of joining together, and mutual support, and human contact. It might be an hour a week talking to a neighbour, or spending an hour with a child or older relative.
But it has to be freely chosen and in that sense voluntary. If some one says to me that the Government should do this or that to make this work then I have not made my point. This is something outside Government. We have to celebrate individuals, individuals doing something they want to, which together creates community, practical hands-on, on the ground, community. This is the way to recover a little of what we feel might be lacking:- people who are friendly, neighbours who know each other, individuals that share experience together.
In the midst of our substantial economic improvements we should not forget to celebrate and cultivate the role of the volunteer.
Our economic policy is crucial but we should remember that life consists of other things beyond the economic dimension and beyond government. To realise those many other aspirations of a fulfilling life we need to recover the spirit of the volunteer.
(1) I have drawn this material from Barry Muir: Bolte from Bamganie, Hill of Content, Melbourne 1973.