Lenore Taylor, political editor
theguardian.com, Friday 16 May 2014
The Coalition is trying to sell a budget with contradictory internal logic which also spectacularly breaches faith with the electorate
Tony Abbott may have overestimated his own formidable skills as a political campaigner. Photograph: Alan Porritt/AAP
Paul Keating underestimated John Howard. John Howard underestimated Kevin Rudd. Kevin Rudd certainly underestimated Tony Abbott. It’s not clear whether Tony Abbott has underestimated Bill Shorten. But he may have underestimated the extent to which Australians value affordable healthcare and education, and a social safety net they can rely on. Not to mention the extent to which they value truthful politicians.
At the same time Abbott may have overestimated his own formidable skills as a political campaigner as he tries to sell a budget with contradictory internal logic which also breaches faith with the electorate just as spectacularly as Kevin Rudd did when he shelved his emissions trading scheme.
That the Coalition may have underestimated Labor’s ability to reap political capital from the budget is understandable. While the government has been faring poorly in opinion polls, support has not been shifting to Labor, with voters instead nominating the Greens, “others” or, if it were available, one suspects, “none of the above”. Even Shorten’s colleagues have been fretting that their leader has been sounding hollow, half-hearted, as if he “hasn’t quite switched on yet”.
Shorten’s budget speech in reply was his best performance yet. It should have been. Given the budget’s content, he was shooting at an open goal. But the speech had resonance because it channelled the shock many Australians were feeling at the deep ideological shifts suddenly confronting them and because the basic message about inequity is backed by state premiers, doctors, educators, welfare groups and disability groups.
Many of the measures included in the budget were among the least popular of the mooted spending cuts or revenue rises, according to recent polls.
The difficulties the government has created for its own side of the argument are less explicable.
In the lead-up to the budget, the basic narrative seemed clear. The government argued that it needed to cut spending and increase taxation to reduce the deficit and pay down debt over time. The “pain” would be shared and the “gain” would be budget “repair”.
But people never really bought the idea of an immediate crisis, despite the government’s best efforts.
In a recent Essential poll, 56% said “cost of living” was their most concerning economic issue. Only 6% nominated the budget deficit and a tiny 5% were most concerned about the national debt. That makes it harder for the government to say that by blocking budget measures Labor is “in denial” about the “debt and deficit disaster”.
And the budget pain was not shared. It clearly hit the disadvantaged hardest, and much of the money was not directed at improving the bottom line, but rather at different priorities such as building roads and setting up a new medical research fund to try to find a cure for cancer and other diseases. “What?” you could almost hear from lounge rooms around Australia. “We’ve got a crisis so bad I have to pay more for a whole bunch of things but we can somehow find $20bn to cure cancer?”
The budget also breaks pre-election promises on almost every front. The only thing more likely to offend voters than obvious multiple broken promises is the government’s attempt to argue that it hasn’t broken any.For example, arguing that somehow Abbott’s endlessly repeated “no new taxes” promise has been kept because the “overall impact of revenue measures” is $5.7bn lower” is cold comfort to people contemplating the very specific impact of revenue measures such as a deficit tax, a Medicare co-payment or a fuel tax hike, which will definitely be “higher” for them.
(The “overall impact” figure is calculated by looking only at the impact of specific government decisions and including the abolition of the carbon and mining taxes, which were in last year’s mid-year economic statement. But the “overall impact of revenue decisions” taken in this budget alone is a $5.5bn increase, and revenue as a percentage of GDP is also forecast to increase every year until 2018.)
It’s also tricky. Ripping $80bn out of forecast funding for the states so that the premiers are forced to make the public case for an increase in the goods and services tax, or another tax, is like a big kid pushing the little kids out to do their dirty work, and given how mad the premiers are, it is also likely to be seen that way.
The government’s strategy is clearly based on a deep confidence that it has time, that it won’t be forced back to the polls by a recalcitrant Senate, that it will have years to reach a rapprochement with the angry states and that it will bring down two more budgets before it has to face the voters.
Its immediate tactic seems to be to legislate the budget in two tranches. It has already quietly introduced the appropriations bills and the legislation for the deficit tax or “temporary budget repair levy”.
With the Greens likely to vote for the fuel tax rise and Labor for the deficit levy, this means key elements will have been passed before the new Senate sits, and the Palmer United party won’t get anywhere near a decision on supply. Many of the other budget measures do not take effect for some time and do not need to be legislated with the same urgency, giving the prime minister time to develop new skills in parliamentary negotiation.
The tactics may avert a parliamentary crisis.
The challenge for the government is to avert a crisis of confidence in the electorate about what it is doing, and why. It may or may not have underestimated Bill Shorten and the Labor party, but it may well have underestimated the Australian people.
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