The dismal beginning to the Fraser years.(Politics)

ON DECEMBER 5, 2006, the National Archives Office released to accredited journalists, under embargo until January 1, the Cabinet papers for 1976, the Fraser government's first full year. The Archives Office had invited Malcolm Fraser to attend and, if he desired, speak to his government's record. Unlike Gough Whitlam, who had accepted similar invitations in the preceding three years in order to re-write his administration's history, Fraser had the decency to decline.

His place was taken by Dr David Kemp, a member of his private office staff in 1976, and later the Member for Goldstein (1990-2004) and a minister in successive Howard governments. His address provides a tendentious account of the Fraser government's 1976 performance. It levels serious charges against then Commonwealth public servants, including the Secretary to the Treasury, Sir Frederick Wheeler, and the Governor of the Reserve Bank, Sir Harold Knight. From those allegations, Kemp also draws general conclusions that are unfounded.

Many of Kemp's claims beggar belief. However, when writing in the Australian on January 1, "Devaluation of a Fiscal Legacy", I had to focus, within a 750-word constraint, on the broad course of events during 1976, and was unable to deal with them in any detail. They are, however, too serious to lie unchallenged on the public record. This article seeks to correct that record.

First, however, I need to say something about David Kemp. We first met, I believe, after his arrival in Canberra in late 1975 on Fraser's staff. However, during the 1960s I had been privileged to get to know his father, the late C.D. (Ref) Kemp, whose friendship I enjoyed for many years thereafter until his untimely death. His son, a political scientist by training, is an intelligent, and I have always thought decent man. But I came to believe--and his remarks last December amply confirm--that in 1976, at the age of thirty-four, he was not equipped to serve as an influential private adviser to a prime minister, and particularly not to one as dominant as Malcolm Fraser.

That said, I should not fail to acknowledge Kemp's remarks about myself. Since I take them (I hope, accurately) to be flattering, I shall not repeat them.

In what follows I first recall the economic scene confronting the incoming government. I then describe the modus operandi of the government, and particularly of the Prime Minister, as that unfolded during 1976, and comment upon those "frustrations" to which Kemp refers. Next I note the essence of the then economic problem (inflation), the remedies available for dealing with it, and the debate then current about those remedies. In describing the public service and political processes involved in the May 1976 Economic Statement and those leading up to the November devaluation, I note the light those processes shed on Kemp's very different account of them.

To the extent that such generalised allegations permit, I shall also rebut Kemp's aspersions on public servants of the time. Finally, I note the unfortunate connection between those aspersions and Kemp's much later role (1997-2001) as Minister Assisting the Prime Minister for the Public Service, when his legislation completed the task (already well advanced by Hawke, Dawkins and Keating) of largely destroying the apolitical nature of Australia's Public Service.