I see a lot fo discussion here about what previous governments can or cannot take credit for. Unfortuantely this rarely ventures beyond how well the economy did during their terms, which is largely outside the sphere of influence of a government. There have however been major changes such as floating the dollar and taking down trade barriers, which have influenced the economy from when they were implimented until this day.

What do you think were the most significant (good or bad) reforms that have happened since WWII?

freediver wrote on Jan 2^nd, 2008 at 12:25pm:

I see a lot fo discussion here about what previous governments can or cannot take credit for. Unfortuantely this rarely ventures beyond how well the economy did during their terms, which is largely outside the sphere of influence of a government. There have however been major changes such as floating the dollar and taking down trade barriers, which have influenced the economy from when they were implimented until this day. What do you think were the most significant (good or bad) reforms that have happened since WWII?

Without doubt two of the most successful reforms have been A New Tax System (Goods and Services Tax) Act 1999 and the Workplace Relations Amendment (Work Choices) Act 2005.

These two acts have been instrumental in massive prosperity for Australia.  Both were introduced by the coalition and both were strongly opposed by the anti-progress Liebor Party.

The floating of the Australian Dollar in 1983.

Reserve bank independence (Keating, c. 1987) is another important reform. Prior to this, governments did a lot of long term damage to the economy by trying to boost short term employment figures just before each election. They did this by getting the reserve bank to lower interest rates, which lead to high inflation in the long term.

Removing high tariffs - Hawke and Keating. Many industries that were being 'nurtured' never managed to stand on their own two feet. Textiles, clothing and footwear was a good example. Under high tariffs, Australians were paying very high prices for locally made goods when imports were much cheaper in real terms, but out of reach due to the tariffs. The TCF industry was always a burden on Australians and is a good example of why industries need to be weaned off government support very early.

Our dollar was floated by Hawke in 1983. Prior to this the government created major problems by setting the exchange rate based on political rather than economic goals. For example, while LBJ was in power in the US, he tried to fund the Vietnam war and big domestic projects by printing money. Inflation followed, which meant a devalueing of the US$. Our dollar was pegged to it so it went down in cost too, but not value. So people started buying AU$ because they were being sold for less than what they were worth. This was made worse by the large number of American soldiers here spending money and buying up land and other assets. The Coalition should have raised the exchange rate, but Doug Anthony, leader of the Country Party (equivalent to modern National Party) threatened to leave the coalition if that happened, because farmers would not get the benefit of the undervalued Australian dollars (and screw anyone who wants to buy anything imported). He didn't exactly say what the CP would do if they left. It's not like they would have teamed up with Labor. Anyway, at the time a 5% increase was necessary. Specualtors got in on the action and started buying even more AU$ because they knew it had to go up soon. This made the problem even worse, until the federal reserve had over two years supply of foreign currency sitting in vaults. All sorts of absurd solutions, like forcing people bringing in money to leave 1/3 sitting in the bank were dreamt up and rejected. Eventually it was left to the Whitlam government (c. 1972) to raise the exchange rate. By then, it had to increase the rate by 15%, which left the farmers worse off than they would have been if Doug Anthony hadn't intervened on their behalf.

Privatisation - Telstra, Quantas, CSL, CBA,

GST - 2000, Howard. This reduced the distorting impact of taxes on the economy. Taxes should be spread thinly and evenly, as their negative impact on the economy is proportional to the square of the tax rate. Australia is still heavily dependent on income and business taxes, even after the GST was implemented. Many people think there has been a long term regressive trend, however the GST really just replaced a lot of the old tariffs.