John Howard’s Investor State: Neoliberalism and the Rise of Inequality in Australia

Abstract

Recent work has acknowledged the variegated forms neoliberalism takes in different contexts while recognizing the elements that connect them. Neoliberalization has proven a flexible, adaptive and renewable pattern of reform. At the same time, there is increasing evidence for Harvey’s contention that its principal socio-economic outcome is inequality. Accordingly, this article proposes that contextualized understandings of neoliberal formations may shed some light on how inegalitarian upwards redistribution has come to pass. It focuses on the Australian government of John Howard (1996–2007), arguing that its fiscal policies created an ‘investor state’ – a uniquely generous and expensive system of tax cuts and state subsidy for investors and consumers of private welfare services. This fulfilled the general neoliberal imperative to boost markets in a locally adapted way that built on the market liberalization of the previous Hawke and Keating governments. Importantly, however, it also altered the generous welfare system they had established, redirecting state support away from those most in need towards those with capital.