Lenore Taylor Political editor Tuesday 14 April
There remains a disconnect between the PM’s new positive messaging, as it applies to the budget, and what his economic ministers are saying
Prime minister Tony Abbott and treasurer Joe Hockey: different stories over how many ‘losers’ there will be. Photograph: Mike Bowers for the Guardian
Tony Abbott’s “look busy, don’t look like a loser” strategy has stabilised his position in the opinion polls, but his reassurances to voters may be setting up another gap between what the electorate is expecting and what the Coalition’s second budget will deliver.
When leadership speculation was rife in early March and the government was still struggling with the political death throes of savings measures from its previous budget, Abbott spelled out his immediate strategy to his party room with commendable candour. He was changing focus, he said, from policies the government was unable to get through the “feral Senate” to smaller things that didn’t need Senate approval, but would appear “meaningful” and “positive” to the person on the street.
Headlines about policies rejected by voters and defeated in the Senate were duly replaced by scores of announcements about taskforces on the ice epidemic, crackdowns on childhood immunisations, inactive bank accounts, country of origin labelling on food, codes of conduct for supermarkets and sod turnings for new roads.
It was a deliberate plan to ease the sense of crisis engulfing the government, soothe the party room panic and restore some semblance of normal, to use the short attention span of the 24-hour news cycle to the government’s advantage by filling it up with small, positive things while the large unsolved budgetary questions were considered in the background.
And to an extent it has worked. The Coalition still trails in the polls, by varying amounts, but it has improved from the total wipe-out territory earlier in the year.
But there remains an apparent disconnect between the prime minister’s new positive messaging, as it applies to the budget, and what his economic ministers are saying.
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On Monday morning, Abbott repeated to Channel Seven’s Sunrise viewers his promise for the 2015 budget.
“The assurance that I give to your viewers, the assurance that I give to you, is that we aren’t going to tackle our budget problems at the expense of families’ budget problems,” he said.
Almost at the same time, on the ABC, his treasurer Joe Hockey was telling breakfast viewers the government was determined to achieve that same quantum of long-term budget savings as it had outlined last year.
“It’s easy to be popular if you say things that people always want to hear, but when you do the things that are necessary for the country then sometimes you cop flak for it. But, my God, we are in this business to do what is right for Australia and, personal popularity or not, it is about doing what is right … We need to undertake structural reform, we must.”
In an interview with the Australian Financial Review, Hockey again outlined his structural reform strategy – the unpopular savings from last year’s budget would “stay on the books” until the relevant minister negotiated an alternative.
“The moment you walk away from structural savings is the moment that you concede that you’re never going to get back to surplus,” he said.
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The prime minister isn’t explicitly saying that households won’t be worse off as a result of this budget, but he’s certainly giving that clear impression. But under the treasurer’s budget narrative there would be many “losers”. The losses might be more fairly weighted towards higher income earners, to increase the chances that they will be accepted by the electorate and pass the Senate, but households would still be losing things they currently receive.
The shift forced upon the government by the community’s rejection of last year’s budget is stunning – but it’s not clear whether it involves abandoning some of the cuts to government spending, or implementing the same magnitude of cuts with a fairer distribution. If it’s the latter there is surely an argument that a government still needs to lay the groundwork for change.
On pensions, for example, social security minister Scott Morrison is considering a proposal, put by the Australian Council of Social Services in its last three budget submissions, to tighten the pensions assets test and increase the taper rate so that eligibility for a part pension cuts out sooner. It could deliver similar savings to last year’s budget announcements, which included the controversial change in pension indexation, and would hit wealthier retirees, rather than all pensioners.
But it was, according to the Sunday Telegraph , rejected by cabinet last year precisely because it meant some retirees would lose their part pension (and some full pensioners would be forced onto a part pension) and this was seen as an even clearer breach of the prime minister’s election promise not to change the pension than a long-term change to indexation rates.
The government is now torn between waiting for a full review of pensions and superannuation policy and including some pared back version of the old Acoss plan in this year’s budget.
On childcare, Morrison is negotiating a new policy based on a model from the Productivity Commission which deliberately looked at how existing spending could be better used, and proposed that some existing subsidies should be transferred from wealthy families to poorer families. By definition, the scheme leaves some families worse off – particularly higher income earners, families using centres that charge more than a new “benchmark” price and low income families that have taken advantage of an existing system that provides them with 24 hours of care a week under the means tested child care benefit, without the parent having to work or study in order to be eligible. It is almost certainly fairer, but some households are likely to lose out.
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And while the government has gone quiet on the GP co-payment, its determination to wring savings from Medicare remains, with the health minister Sussan Ley now considering a total revamp of the Medicare benefits schedule as well as the freeze on rebates, which doctors claim could usher in a co-payment “by stealth”. This could be a more equitable way to find savings than hitting low income earners with a co-payment for every visit to the doctor, but it is still likely to prompt a backlash.
Critics of last year’s budget would welcome a new-found fixation on fairness, if that is what the budget eventually contains. And fairer cuts would certainly be more difficult for Labor to oppose. But given that few voters would rapidly self-identify as unworthy recipients of government largesse, some pre-explanation would probably be smart – even if it interrupts the pre-budget season of small, daily offerings of “good” news. Alternatively, if all household budgets are safe from the budget axe, Abbott should tell his ministers.
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