Blame Howard

At the end of the 1990s, Australian life was pretty damn good. Families had disposable income, groceries were cheap. We didn’t know it yet, but we were in the final moments of the Australian dream actually being attainable, with housing being accessible to all. All of that is now gone, in fact all the reality for all those things I listed is almost the exact opposite. For that, we can blame one person. John Howard. 

In 2004, Barnaby Joyce changed Australia’s political landscape. Howard had held power for 8 years at this point, but he never had control of the Senate until Barnaby Joyce unexpectedly won a seat in Queensland for the Upper House of federal parliament. This gave Howard the majority he had chased for close to a decade. His policies would now stand completely unimpeded.

Up until this point Australia had a long tradition of powerful unions. Unlike other western countries, Australia developed with workers holding a far greater share of influence. By 2004, the top one percent in America owned 33.4% of their nation’s wealth, in Australia, they only owned about 18%.

This tradition of worker power started early in Australia’s story. In 1850 Victorian miners rebelled not against taxes like their American counterparts but for a fairer system. Although the Eureka Stockade is considered a military failure, the aftermath is considered a win for workers. Government walked away with the blame and miners gained proper political representation. 

Years later, in 1890 after pressure from U.S. tariffs caused employers to try and slash sheep shearers’ wages, Australian unions banded together to bring the agricultural sector to a complete stop. Agriculture being the number one industry in the country at the time. This solidarity solidified worker representation within our system. It was clear unions needed to not just react to these crises, but to be proactive. 

The Labor party was founded and it gave workers a clear pathway to parliament. The country battled back and forth throughout WW2 and the post war boom in relative balance until the 1970s changed everything. Wage growth was causing rapid inflation. The system that had built a nation was causing it to come unstuck. So the labor strategy changed. Hawke and Keating redefined the objective. Instead of dividing the pie evenly, they wanted to grow the pie overall without shrinking workers share. A bigger pie meant more for everyone. 

By this time award wages acted as a safety floor for workers. Howard hated this, believing in individual contracts over collective bargaining. By 1998, he introduced legislation that allowed workers to sign contracts below that safety floor created by award wages. This put downward pressure on wages. If you demanded an award wage, employers could now go find someone to do it for cheaper. 

With wage growth out of the way, Howard set his sights on your superannuation. Keatings long-term plan was to increase compulsory super contributions to 15% giving workers financial security as they aged out of the workforce. Howard hated this idea and capped super at 9%. Instead, he halved the capital gains tax. Cutting CGT meant that investors kept more profit when they sold property, making the investment much more attractive.

This was a clear shift away from workers (particularly young ones) and towards capital investors. The end result was making property investment far more lucrative and attractive. This was the match that lit the modern property boom. Although the writing was yet to appear on the wall. Families felt wealthier thanks to rising house prices even though their wage growth was about to fall off a cliff and retirement just got further away than ever. 

As Barnaby Joyce took his Senate seat in 2004,Howard finally had the green light for industrial reform at full scale. He took protections away from sole traders (mum and dad businesses) and introduced something known as work choice. Without a lesson on industrial relations, the changes essentially meant that unions could negotiate far less than before. In fact. it explicitly limited them to negotiating on only 5 conditions. This was his killshot to Australian workers. Make unions irrelevant, and it largely worked. Union membership fell heavily because they simply couldn’t protect you as well. 

In 2025, disposable income for the average Australian family has dried up, houses are unattainable and retirement is a pipe dream. Workers are not represented by policy, capital markets are. All these changes were made by Howard. Labor infighting throughout the late 2000s stood in the way of repealing Howard’s policies and the Abbott, Turnbull, Morrison era solidified his changes for around a decade. Australian living standards have been in decline for almost 25 years now. The last 10 years have made it obvious but when we track back the data the culprit is very clear. The symptoms feel new, but their roots go back two decades. Blame John Howard.