Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

When the former Senator Nick Minchin retired from politics, he was sure to let everyone know that he was doing so as the country's longest serving finance minister. When asked who was the best in this role in Australian history, Minchin named Peter Walsh.

I rise to pay tribute to a man who, through his stubbornness, rigor and commitment to Labor values, changed Australia for decades. As the finance minister for the bulk of the Hawke-Keating period in government, he provided the fiscal foundation for one of the most successful economic reform periods in Australia's history. The decisions made during his time as Minister for Finance set Australia up for 25 years of rapid and consistent economic expansion.

The Hawke government is well known for its bold economic reforms—the floating of the Australian dollar, financial deregulation, compulsory superannuation, the accord, substantial tax reforms. These bold and difficult economic reforms shook Australia out of its protectionist hibernation. However, the effectiveness of these reforms would have been greatly undermined if they had been accompanied by fiscal profligacy; the Australian economy of the 1980s could not have handled the additional stress of an out of control federal budget. As the Member for Brand told the House yesterday:

Significant expenditure cuts were required from 1986 in order to weather collapsing terms of trade. The government adopted a simple trilogy: not to raise taxes as a share of GDP, not to raise outlays as a share of GDP, and to reduce outlays in real terms. For four years, using IMF expenditure definitions, Peter fulfilled that trilogy. He produced four budgets which reduced outlays in real terms—something no other government or finance minister has done more than once.

Peter Walsh was the king knife in the Expenditure Review Committee; Paul Keating called him the 'Sid Vicious of Australian politics' and his fiscal discipline in the ERC imposed rigor throughout the policy design and implementation process.

On Walsh's retirement from cabinet in 1990, The Australian ran the headline: 'The man who made Keating look soft'. Rent seekers and ministers having a try on with a weak program were in for a tough time when Peter Walsh was in the room. In many cases it was this fiscal discipline that drove many of the Hawke-Keating governments' greatest policy innovations. For instance, Walsh insisted that the funding for the explosion of university demand, triggered by a rapid growth in high school completion rates under the Hawke-Keating governments, needed to be met from other revenue sources and not from existing on-budget spending. This led to one of the great policy solutions of the period, the introduction of HECS—income-contingent deferred repayment for higher education loans—an innovative policy that delivered fiscal responsibility while also creating a more equitable system of higher education funding.

Walsh despised populist politicians, fashionable causes and political correctness. He did not like what he called the 'compassion industry', where money was funnelled to the disadvantaged only to further entrench that disadvantage. He hated rent seekers in all their forms; he saw them as stifling the creation of rational public policy. Instead, Walsh was committed to fairness and decency. After his passing, politicians from both the left and the right praised the man who earned the respect of his colleagues and his adversaries.

A view was expressed by some after his passing that: 'Peter was such an outstanding finance minister, and I think would have been accepted as the Minister for Finance by the coalition parties as well as the Labor Party.' And, with respect, I would have to disagree with this sentiment, though I take it in the spirit that it was given. As the Member for Watson recently said:

It must not be forgotten the fiscal discipline from Peter Walsh was always underpinned by a fierce determination to deliver priorities for those who needed help most. His commitment to responsible savings and eliminating wasteful expenditure lay at the heart of his commitment to a Labor agenda.

Walsh showed how important it was to embed progressive values within the constant task of fiscal responsibility.

Comparisons with Thatcher's UK government at the time are symbolic. Both Australia and the UK had simular structural economic problems in the 1980s. Whereas Thatcher's policies tore at the fibre of British society, the Hawke-Keating governments delivered economic reform and fiscal responsibility in a way that protected equity and equality of opportunity. On the one hand, Walsh tackled the government's fiscal problems through innovative revenue measures like the petroleum resource rent tax. At the same, he was able to accompany those changes with improving support for people on low incomes and extending fee relief to parents with children using private child care, all the while reducing Commonwealth budget outlays in real terms—four times, as noted by the member for Brand.

Our progressive community, our economic prosperity and our fair society we owe today in no small part to the work of Peter Walsh.

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