Schoolboy Bernie Fraser might have become a train driver. Or a fitter and turner in Junee’s big railway workshop, such was the career trajectory for many local boys in the 1950s on completing their Intermediate Certificate.
But Bernie found a different path.
Of the more than 60 students who completed their Intermediate Certificates at Junee Intermediate High School in 1955, only five went on to complete the Leaving Certificate. Bernie was one of them.
His father had rather hoped Bernie, the eldest of five children, would join the workforce.
“We were pretty hard up,” Bernie says. “My parents grew up during the Depression years and had little chance of a decent education. As an unskilled worker, my father earned a modest wage and getting through from one week to the next was quite a battle.”
Bernie attributes his completion of high school to the encouragement of several committed teachers, and the “unyielding support and sacrifices of his mother”.
Armed with a NSW Government teacher’s scholarship he “lobbed up at UNE” in early 1958 on the eve of his 17th birthday, after a two-day train trip from Junee. He says being accepted to study at UNE was “one of those rare, life-changing strokes of luck”.
“Without that scholarship there was no way I could ever have got to university,” he says. “I had grown up in a book-free household and at UNE I was keen to learn everything I could. I relished the hours spent in the well-stocked library, and spending the annual scholarship allowance (of about 20 pounds) on textbooks at the campus bookshop.”
Bernie spent his first year at UNE living in a share house in Beardy Street, with seven other first-timers, two to a room. In his second and third years he enjoyed a brand new room at Wright College, all to himself. “With showers down the corridor and a short walk to the university buildings, it was heaven,” he says.
Bernie’s Arts degree had a focus on economics and history. At the end of his third year he opted not to pursue a Diploma of Education or teaching career. Instead, he joined the Commonwealth Public Service in January 1961, “with a view to serving the public and earning some money”.
His public service career spanned almost 40 years and included stints in the departments of National Development, Treasury (with three years as Treasury Representative in London) and Finance, and three years as Director of the National Energy Office. Bernie served in two of Australia’s most senior monetary roles – as Secretary to the Treasury and Governor of the Reserve Bank, from 1989-96, during Prime Minister Paul Keating’s “recession we had to have”.
It was a challenging time. “The deregulation of the banking industry and resulting increase in competition saw banks focused more on maintaining and increasing their market shares than on properly managing the risks of their lending,” Bernie said. “This environment enabled property speculators like Bond and Skase to borrow large sums and invest in property. The Reserve Bank repeatedly raised interest rates to head off the speculators, but as property prices continued to rise faster than interest rates, it was a hard contest.”
Bernie recalls that the cash rate was 18% and inflation was running at 7-8% when he arrived at the RBA. “The situation was clearly unsustainable and Australia duly experienced a short but sharp recession in the early 1990s. The challenge for the Reserve Bank was to reduce those sky-high interest rates to avoid severe and extended reductions in economic growth and employment, while at the same time maintaining sufficient interest rate pressure to lower inflation.”
Thirteen consecutive reductions in the cash rate brought the cash rate down to 6% in the early 1990s, and the inflation rate declined to within the RBA’s newly adopted target of 2-3%.
Bernie believes the RBA’s performance over the past three decades has been “pretty good”. “That performance, based in large measure on the bank’s independence, sound judgement and flexible inflation targeting, has contributed significantly to Australia’s relatively strong economic growth,” he says. “How that growth has been distributed is another story.”
