Policy debate in the Rudd years.(Kevin Rudd)

DESPITE AUSTRALIA remaining one of the world's most prosperous nations, its ability to maintain a high standard of living for all Australians (particularly low-income earners) is being tested. Problems receiving greater attention in recent years include greater home unaffordability; increasing disparity of wages between high- and low-income earners; decreasing purchasing power for low-income earners because of higher prices for food, petrol and utilities; and an increasing reliance on credit.

Such trends have emerged despite the Howard government's considerable efforts and achievements, as seen by the high level of economic growth (compared with most other developed nations), lower unemployment rates, numerous budget surpluses, and record amounts of revenue being spent on various social welfare programs (including the environment).

So how best can government help the most vulnerable in line with Australia's continued support for freer trade? And do the above negative trends indicate a limitation upon the government's ability to temper the ill-effects that result from greater economic competition between nations?

Answering such questions should be an essential aim of political enquiry, and would go much further than general support for freer trade and the virtues of liberal democracy. My own interest in politics since the early 1990s was inspired by concern about income disparity both within and between nations, and environmental degradation, the two issues that will define the progress of humanity in coming centuries.

Offering insight into future Australian political trends will also counter the simplicity that continues to emanate from Australia's supposed left-wing intellectual elite. For instance, Phillip Adams may believe that the past policy mixes by Whitlam and Keating were superior to Howard's supposed "wedging, vote-buying and sundry pork-barrelling", and that Rudd has merely outmanoeuvred Howard as a "doctor of spin" (Australian, August 20), but he displays little capacity to explain why Australian political leadership has changed or whether recent policy trends can be tempered.

But given the many problems that have emerged in Australia in recent years, supporters of freer trade and liberalism have an obligation to address some of the key concerns made evident by recent trends and their impact on the future capacity of Australia's liberal democracy to meet a variety of economic, social and environmental needs.

As I have noted in previous Quadrant issues, policy trends under both Labor and Coalition governments since 1983 represent much more than a supposed decline in the standard of Australia's policy solutions, as many would have us believe. Facing relative economic decline, Australian governments had little choice but to adopt significant economic reform if the nation was to remain competitive, including the promotion of the private sector rather than the further expansion of government outlays, lower tariff protection and taxation rates, and greater labour market deregulation. Given the ongoing promotion of freer trade from the 1950s and the limitations of protection that were made evident by the early 1970s, such policies were deemed necessary to uphold the national interest while Australia remained committed to promoting peace and prosperity between nations through the promotion of liberalism.