Prime Minister Malcolm Turnbull is in serious trouble. Labor holds an election-winning polling lead of 52%-48% less than nine weeks from election day. Voters are rapidly souring on him, and Bill Shorten, once heartily disliked by voters even when Labor was ahead of the Abbott government, is slowly rebuilding his appeal to the electorate. Worse, Labor has bested the Coalition in the battle of ideas and led the policy debate. None of this is what anyone — even Labor — expected when Malcolm Turnbull replaced Tony Abbott last September. Turnbull was expected to easily outshine the stolid Shorten and lead Australia into a new, reform-minded era of smart policymaking and sensible debate.
And the policy landscape has also shifted against the Coalition. Voters are angry about the unfairness of a tax system that allows the world’s biggest companies to pay zero tax and high-income earners to exploit loopholes both abroad and in our superannuation system to minimise their tax. Voters’ idea of tax reform is to make big companies and the rich pay more tax, not less.
Much of tonight’s budget will be devoted to securing the government’s defences against Labor attacks that exploit this. There is expected to be another high-profile crackdown on multinational tax avoidance — something Joe Hockey announced right before the 2015 budget as well (we’ll see if Morrison makes Hockey’s mistake of refusing to put a dollar figure on the sums raised by his measures, depriving the policy of much of its political impact). Labor has had a field day exploiting multinational tax avoidance, painting the government as too close to the big end of town and its mates at the Business Council (which is easily done because that is indeed true).
Measures to curtail the exploitation of superannuation tax concessions by high-income earners are also intended to head off Labor’s success on that front — remember that, at the end of 2013, then-treasurer Joe Hockey and his assistant minister Arthur Sinodinos proudly announced they were abandoning Labor’s measures addressing the exploitation of super tax concessions, and were roundly applauded by the Business Council for doing so. The Abbott government’s attempt to kill off the low income superannuation contribution (LISC) is also set to be reversed (along with a rebadging).
Add in the limited increase in schools funding to deal with Labor’s Gonski funding commitments and the wholesale adoption of Labor’s tobacco excise increase (complete with confected “budget blackhole” story dropped to the media) and this budget — much like last year’s — will look a lot like a stereotyped “Labor budget” of conservative mythmaking: lots of taxes (the government is planning to tax Australia at a far higher proportion of GDP than Labor did under Rudd and Gillard) and lots of spending (ditto). To the extent it also invests in urban infrastructure, that will only reinforce the fact that much of the budget is about stealing Labor’s more fashionable clothes.
These defensive policies aren’t enough — Turnbull needs to get on the offensive. There’s no evidence of any shift in voter sentiment around negative gearing — unsurprisingly, given the government has been unable to focus on its scare campaign for any length of time. There’s still time for that campaign to work. But more disturbingly, it appears from today’s Essential Report poll that Labor’s bravery on climate policy may not merely not be a negative, but might actually be popular with voters.
The budget thus also needs to bring an end to Turnbull’s policy dithering and assert a clear narrative about where he wants to take Australia. “Jobs and growth” won’t do it (they may as well throw in “motherhood” as well). Just as Morrison is rehashing Hockey’s multinational tax hit, there’ll likely be a rehash of last year’s “Tony’s tradies” handouts and more tax cuts for small business — the altar at which all politicians must genuflect. That budget at least staunched the bleeding for the Abbott government, before its own ineptitude restored it to the path of self-destruction. Turnbull and Morrison will plainly be hoping that, at the very least, reheating last year’s approach will work until July 2, and they can worry about the rest after that. But handouts for small business isn’t a compelling narrative of the kind Turnbull seemed to promise when he became Prime Minister, of the kind the absence of which has so disappointed the electorate since then.
The Prime Minister needs to give voters some substance, to offer a clear agenda beyond buzzwords, cliches and attacks on Labor. The extent to which tonight’s effort is able to do that — rather than merely stop the bleeding with some cleverly targeted political measures — is likely to determine whether he can halt the trend to Labor and regain an election-winning lead.
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