Life of an Aussie Battler
This book has two main themes. The first is a response to the evident confusion and uncertainty about economic policy in Australia and more broadly. Who am I to offer such advice? Nearly two decades in the Reserve Bank, mostly in Research Department and 7 years as Head of Research. Since then I have worked in business entities as an executive, mostly as a CFO and then CEO. Latterly as a non-executive director, mostly as Chairman of boards.
Throughout my time in business I retained a keen interest in economic policy, with occasional articles in publications like Quadrant and Policy, with a monthly column in the Australian for eleven years and regular blogs in www.henryThornton.com for around 25 years.
My secondary theme is my life, which I describe as that of an Aussie Battler. My aim is to provide background about my varied full time activities and the insights developed in my chosen field of economics, and also to explain aspects of a personality that has not always pleased people I have worked with. I have some tough issues to discuss including my own shortage of ability to communicate, especially to those more senior to myself, which I hope this book might elucidate.
I hasten to say that I have communicated well with my great friend and mentor, historian Geoffrey Blainey, my boss at Norwich Union in Australia, John Stanforth and his boss global CEO Allan Bridgewater and in the academic world Clifford Wymer. I believe I have been on good terms with Sir Harold ('Harry) Knight, Peter Costello, John Hewson, for a good period with Austin Holmes and Bill Norton at the RBA, John Phillips my best mate at the RBA and even Paul Keating until I dared to tell him (correctly) that he was headed for great trouble. Various others who I shall mention in the text I regarded as great friends and highly competent colleagues.
My main coverage is Australia's economic development since the end of World War II, an event that shortly after coincided with my birth. This has been a great era for Australia, with a surge of post war growth, a sad time in the 1970s, then an era of growth and development overseen by Bob Hawke and then John Howard. From the 1960s there was the era of resource development, which by the 1980s fittet exceptionally well with the development of China and India and the dynamic nations of South East Asia. Agriculture has generally boomed despite drought, fire and flooding rain. In the 19803 and 1990s Australia's development was especially strong, fired by productivity-enhancing policies devised by the Hawke-Keating government and then the Howard-Costello government.
Since the defeat of the Howard-Costello government, the economy has slowed, especially in a relative lack of new policies to increase productivity. I hope that this book will demonstrate the weaknesses in policies of one of the potentially strongest governments in the world. Policies that need to be reviewed and in my view changed include:
* Monetary policy which has one main policy - altering cash interest rates - and a need for two more supporting policies. The monetary authorities need the ability to tax capital inflow when the exchange rate becomes too strong. Also to deal with asset inflation partly by giving the Reserve Bank the flexibility to use cash interest rates to contain asset inflation in support to a new policy to rein in asset inflation.
* Fiscal policy in Australia's modern history has used governor Phillip's policy of 'reduce rations' when the second fleet was late in arriving and early agriculture and stock developing was ineffective. In all crises until the recession of 1960/61the fiscal policy was effectively to 'reduce rations', although the Federal government's policy to allow export of raw materials, a major productivity enhancing policy. By the time of the crisis of 2007/08 the policy of the Rudd government was dramatically 'raise rations'. The Rudd government spent far more money than was needed and sent cash cheques to people who had no need of charity. Schools were given money they did not need for school gates and insulation on the roof space of people's homes.
* Productivity was raised by the Menzies government in 1960/61 and again and more consistently by Hawke-Keating and Howard-Costello governments. Such policies are the most difficult for people to accept as such actions often make some people less well-off and at least discomforted. It is vital for government to develop a clear 'narrative', explaining why changes are needed to make Australia safer and more productive.
If you are lucky, your greatest memories are of your family life. My wife Libby was a great support in my corporate endeavours, a tough critic of my literary efforts, and occasionally praises a painting. I am grateful for constructive criticism from a lady with a mind like a steel trap and a wonderful organiser of our family life and travel pursuits.
David supported my Quixotic attempt to win the seat of Kooyong from Josh Frydenberg in 2010. When very young he persuaded me to dial down my workload and to spend more time at home. Eliza was a loving daughter and (like her Mother) told me useful truths when she felt I needed to hear them. Tim also when he was very young told me to stop trying to change every aspect of the modern world, and (occasionally and reluctantly) helped with an IT challenge.
All of the children fortunately do not take drugs, worked hard at school and university, have good jobs and have fine senses of humour. Sadly, they do not often enjoy my 'Dad jokes'.