Crisis Management: The Kennett Government and the neo-Liberalising of Victoria Peter Craig McIntosh BA (Hons) Faculty of Higher Education Swinburne University of Technology Lilydale, Victoria, Australia Being a thesis submitted in fulfilment of the requirement for the degree Doctor of Philosophy March 2010 ii Crisis Management: The Kennett Government and the neo-Liberalising of Victoria Thesis Abstract This thesis is testing Regulation Theory’s expectations of capitalist evolution from a Fordist to a post-Fordist accumulation regime in relation to the establishment of neo-liberal political-economic governance practices by the Kennett Government in Victoria between 1992 and 1999. The thesis will test the veracity of Regulation Theory’s expectations and uncertainties about a post-Fordist institutional fix to the boom/bust cycle of capitalism. Through a series of interviews with strategic participants in Victoria’s political-economy of the time, and with a catalogue of the neoliberal actions, policies and approaches of the Kennett Government, the two arms of Regulation Theory (the regime of accumulation and the mode of social regulation) will be tested and interpreted against the implementation procedures undertaken by the Kennett Government in its attempt to establish a neo-liberal revolution in Victoria. This will involve two different approaches to match the two arms of Regulation Theory. The first will entail an analysis of the Kennett Government’s neo-liberal policies, actions and political strategies supported by the second approach which will draw on a critical discourse analysis of Premier Kennett’s speeches in the form of his Address to the State Council of the Liberal Party (this is a series of addresses given throughout a year to the party hierarchy which catalogues the achievements of the political year against the background of the political philosophy that informed the decisions that were made in that year). This first stage analysis will demonstrate the government’s attitude and role in facilitating the putative development of a new regime of accumulation (in this case neo-liberalism). Secondly, the interview material (together with the Kennett Addresses) gathered from a number of key players in Victoria’s political economy from inside and outside the government (including government ministers, backbenchers, political advisors, past Premiers, Union leaders, iii bureaucrats and business people) will be used to measure the extent to which the second arm of Regulation Theory, the mode of social regulation, was able to offer support to the regime of accumulation process in an attempt to successfully embed (or otherwise) a new form of capitalist accumulation practice in Victoria. If an accommodation between the two arms of Regulation Theory can be shown to have occurred through this research and during the time of the Kennett Government’s term of office then there will be tentative support for its ability to explain the embedding of post-Fordist capitalism in a regional Australian state. In anticipation of equivocal or tentative results, consideration was also given to the agency affect of Premier Jeff Kennett, as an alternative explanation for the outcome of this experience of neo-liberal governance. iv Acknowledgements The fact that I have finished this thesis is a tribute to a number of people who continued to show faith in me, who were inspired in their guidance, who opened a door and who were around for most but not all the journey. Kay Lipson whose faith was tested but was always willing to show more. Janet Gregory who gave me the faith and the opportunity to believe that I could to finish. Steve Theiler who was unwavering and had all the faith, support and friendship I needed. Jason Bainbridge who supplied the genius moment. David Hayward who opened the door to the theory. Danika Benison who nearly made it to the end. In addition a number of people helped me organise my administrative life through the progress of the last stages of this thesis and their help was essential and greatly appreciated. Everarda Cunningham who put “her hand” in “her pocket” to help me finish my interview transcriptions; Dominique Hecq who dealt with the bureaucracy; Ann-Maree Watkins who had a magician’s touch with the formatting tools; and Nadine White who, with great humour and grace, helped me whenever I asked. vi Table of Contents Introduction ............................................................................................................................. 1 The Rise of the Kennett Government ....................................................................................... 2 Jeff Kennett ........................................................................................................................................ 7 The 1992 Election Campaign ................................................................................................................. 9 Political Rhetoric: Creating the Discourse of Crisis ................................................................... 12 Report of the Victorian Commission of Audit .............................................................................. 13 The Execution of the Revolution ....................................................................................................... 15 Concluding Remarks .................................................................................................................... 17 Chapter 1 ................................................................................................................................ 20 Literature Review and Historical Context .................................................................. 20 Introduction .................................................................................................................................... 20 Political Organisation in Australia .......................................................................................... 21 The Neo‐liberal/New Right and its Antecedents ........................................................................ 27 The Regulation Theory Literature and its Concomitants ............................................... 34 Fordism/post­Fordism ................................................................................................................ 37 Neo­liberalism as a Fit for post­Fordism .............................................................................. 39 Regulation Theory, the Regional State and Urban Sociology ........................................ 41 The Local State in Australia ....................................................................................................... 48 Regulation Theory, Capitalist Relations and the Australian Federation .................. 51 Victoria and the Shift to Neo­Liberalism (and a putative post­Fordism) under the Kennett Government .................................................................................................................... 55 Chapter 2 ................................................................................................................................ 63 Regulation Theory .............................................................................................................. 63 Introduction .................................................................................................................................... 63 Regulation Theory ........................................................................................................................ 64 Flexible Specialisation ................................................................................................................. 67 The neo­Schumpeterian Approach ......................................................................................... 69 Post­Fordism, Neo­Liberalism and the Regulation Theory Approach ....................... 73 A Reconstructed Theoretical Approach to the Regional State ...................................... 76 Applying Regulation Theory to the Regional State ........................................................... 77 Critical Discourse Analysis: the Theoretical Context ....................................................... 82 Charisma and Politics .................................................................................................................. 87 Chapter 3 ................................................................................................................................ 89 The Methodology for Uncovering the Neo­Liberal Revolution in Victoria ..... 89 The Critical Discourse of the Kennett Era ............................................................................ 89 Methodology .................................................................................................................................... 90 The Analytical Framework: Critical Discourse Analysis .......................................................... 90 Operationalising the Key Theoretical Constructs ....................................................................... 94 The Regime of Accumulation .................................................................................................... 95 The Mode of Social Regulation.................................................................................................. 98 Social Institutions: the Activities of the State Apparatus ........................................................ 99 Selection Criteria for Informants .........................................................................................