Thirty years ago (2 March, 1996), the defeated Prime Minister Paul Keating said: “When you change the government, you change the nation.” It was one of the most profound and prophetic statements in Australia’s political history.
As what remains of the Liberal Party celebrates the anniversary of the ascension of John Howard as its second-longest-serving Prime Minister, it is worth pointing out that longevity in office is not worth celebrating in Howard’s case. Indeed, the longer he was in office, the more damage he did.
Virtually every social and economic ill in Australia today has it genesis in the policies of the Howard Government. Let’s itemise them.
Population, housing, and employment. Howard ramped up immigration at the behest of business which wanted cheap labour. Howard was ideologically obsessed by reducing the power of unions. That policy had some merit in moderation, but the wholesale destruction of secure employment with decent conditions (which Howard’s Work Choices did) had no merit.
The side effect of disempowering unions through mass cheap immigrant labour was manifold. It spawned the gig economy, job insecurity, stagnant wages, and lower productivity. It caused huge pressure on infrastructure, health, and education. It gave fodder to the racism of Pauline Hanson and One Nation.
To make the high-immigration policy palatable, Howard had to be seen to be harsh on refugees to politically counter the Hanson slogan of Australian “being swamped by Asians”.
Yes, the massive boat arrivals had to be controlled, but it was at the expense of humanity and taxpayers through the bribing of Nauru to take refugees and the wasteful funding of contractors to keep them imprisoned. It made vilification of refugees acceptable.
The 2002 $3000 baby bonus added fuel to population fire. Immigration has never since been ramped back down to a level that helps rather than burdens the nation.
Tax and housing. High immigration put enough pressure on housing, but the 50 percent capital gains tax concession in 1999 made it worse. In effect, higher income investors could buy housing, deduct the outgoings including the interest on the loan against existing income, sell later, and pay tax on only half the capital gain.
In short, income that attracted high tax could be converted to income attracting lower tax.
People flocked to invest in housing to take advantages of the concessions. Howard turned a housing market where people bought a house in which to live into a vehicle for tax-minimisation. The capital-gains concession turbo-charged the use of negative gearing. And Howard’s big first-home-buyer grants just added fuel to the flames.
Superannuation. Howard was so obsessed with union power that he and his successors were determined to undermine Keating’s universal superannuation scheme which was designed to provide a decent retirement income for working Australians (which had been denied them for decades). Unions had representation on the boards of many industry funds.
In 1999, Howard legislated for self-managed superannuation funds. They turned into tax-minimisation and estate-management vehicles rather than provisioning for retirement. They also became targets for scammers.
Tax. The 11 years of the Howard Government saw a shift of the tax burden towards younger salary and wage earners and away from older wealthier Australians. Giving cash tax rebates on franked share dividends to people who had little or no taxable income ballooned from about $500 million to about $7 billion today.
Negative gearing, superannuation, capital gains, and cash rebates on franked dividends now cost the Budget about $115 billion a year. That amount could easily be halved.
In mid 2003, after meeting industry lobbyists, Howard abandoned the Liberal Party’s proposal for a cardon tax. Combined with a failure to effectively tax resource extraction, it led to decades of bumper freebies for share-owners (mostly foreign) and upper managers to the detriment of middle- and lower-income Australians and people who rely on government services.
Howard’s policies made for great inequality and intergenerational unfairness.
Privatisations and out-sourcing – ramped up by Howard – had a similar effect: wealth transfers to the already-wealthy.
On the other side of the coin, was Howard’s contraction of government help to those who needed it most – the aged (kerosene baths in privatised nursing homes), toddlers (privatised, poorly regulated childcare), the sick (trashed Medicare), the unemployed (frozen benefits), students (huge funding boosts for elite private schools and higher HECS debts), and consumers (regulators defanged).
In the late 1980s and early 1990s, Australians had free, quality and timely health care. Howard measures such as the Medicare surcharge, freezing of benefits, and the private-insurance premium penalties for those who have not been insured from age 30 led to an unnecessary shift of money to the more inefficient private sector with virtually no control over rampant gap fees.
The Australian health system is looking more and more like the profit-obsessed American system under a process put in train in the Howard years.
Under Howard, federal education funding was skewed to elite private schools who did not need it for education. It was a gift to the already wealthy. It resulted in the starving of public schools who needed money for basic education. And Australia’s international education ranking plummeted.
Yes, gun control and the GST were worthwhile reforms, but were never followed up in subsequent years and are now not working well.
Overall, the Howard Government did not make the lives of the broad mass of Australians better. The policies were not even aimed at that. They were aimed at helping business supporters and well-off older voters.
Howard was the worst Prime Minister in Australia’s history. At least Billy McMahon had the ineptitude to do nothing, rather than using astute political artistry to dress up policies as favouring “battlers”, but in reality, making life easier for the wealthy by imposing on the broad mass of the Australian people the rotten fruits of a malignant ideology.
Wherever and whenever you go in Australia today, the individual stories tell the national story. Gap fees. Wait times. Inequality. Can’t get a house. Big student debt. Poorer public schools. Stagnant wages. Growing inequality. These things were not the case before March 1996. Since then, the nation’s total wealth has certainly gone up, but that is because of the much greater wealth of a few. Whereas because of the policies Howard set in train, the majority are relatively much poorer, more divided, more unequal, and more resentful.
The nation changed.
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 24 February 2026.