Australia's Economy
The Hawke-Keating Reforms
How Labor governments under Bob Hawke and Paul Keating from 1983 cut tariffs, deregulated finance and made wage deals with unions, transforming Australia's economy.
From 1983 to 1996, Labor governments under Bob Hawke and Paul Keating transformed Australia’s economy.
Before
Australia had high tariffs, regulated finance and centralised wage-setting, and slow productivity.
Reforms
- Floated the Australian dollar (1983).
- Deregulated banks and allowed foreign banks.
- Cut tariffs sharply on manufactured goods.
- Privatised some state firms like Qantas and the Commonwealth Bank.
- Introduced compulsory superannuation (1992).
- Created Medicare (1984).
The Accord
The Prices and Incomes Accord with unions traded wage restraint for social benefits like Medicare and superannuation.
Keating’s warning
In 1986, Keating warned Australia risked becoming a “banana republic” if it didn’t reform, galvanising support.
Results
Productivity rose in the 1990s, setting up decades of growth.
Comparison
Similar in spirit to India’s 1991 reforms, but with a centre-left government working with unions.
When tariffs on imported cars fell, Australian consumers paid less for cars, while local carmakers had to become more efficient.
Australia's Labor governments led major reforms.
- Hawke and Keating reformed Australia from 1983 to 1996.
- They floated the dollar, deregulated banks and cut tariffs.
- The Accord traded wage restraint for social benefits.
- Productivity rose in the 1990s.
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