Every Liberal MP knows the budget is about shoring up Turnbull, but it could all unravel

Extract from The Guardian

Katharine Murphy

Tuesday’s abrupt recasting of the government as the voice of fairness leaves it vulnerable; one wrong move and it could go south

The budget’s aim was to bury the catastrophic cock-up of 2014 and creep back to the political centre with a degree of contrition. Photograph: Joel Carrett/AAP

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Friday 12 May 2017 13.18 AEST 

For a budget credited with reset powers – with the potential to revive the Turnbull government’s ailing political fortunes – the backbench was curiously disengaged in parliament this week.

There were lots of heads down diligently tending correspondence during the two question times immediately following the budget. A studious absence of emotion.
If you call around a cross section of government people you piece together the “why” of the disengagement.
Everyone sitting behind Malcolm Turnbull knows this budget is about shoring up Malcolm Turnbull, and this roll of the dice, this abrupt recasting of the central character of the government, will either work – the rising tide will lift all boats – or it won’t.

As one government man puts it, this is the no spare tyre budget.

The government, since the catastrophic cock-up of the 2014 budget, has been bumping along on an unsealed road. There was one spare tyre, and the government used it, when Malcolm Turnbull returned to the Liberal party leadership.

 2017 Budget in 60 seconds – video explainer

Now they are all out of spare tyres. This significant shift in storytelling will work, and Turnbull will work, and the government as a whole has a chance of a political comeback, or it won’t.
No spare tyres. One thing goes wrong, and that’s it, it all unravels.
Stressful business. I’d have my head in constituency correspondence too.
The Coalition has used the budget to recast itself as a government that cares about fairness, and a government that isn’t afraid to do things; build things, stand up to the banks (possibly the only constituency in the country less popular than them, apart from used-car salesmen and journalists), take tough decisions, like raising taxes to fund the National Disability Insurance Scheme.
It’s the right call. Creeping back to the political centre with a degree of contrition, genuinely seeking the middle ground, is the only hope the government has of connecting with voters.
The sloganeering, the ideological posturing, and the manifestations of bizarre reactionary right-wing victimhood, might please the after dark ranters and monologue merchants on Sky News, creating a toxic feedback loop in conservative circles – but no-one else cares.
But it’s fair to say conservative MPs don’t like this week’s change of emphasis, and some are actively holding their noses. Tony Abbott’s endorsement of the budget was through entirely gritted teeth. No-one at this delicate point wants to play spoiler. But recently history tells us that will change, and rapidly, if anything with this budget starts to go south.
So where could things go south?

While most Australians hate the banks, if the banks decide to weaponise their campaign against the $6bn levy, if they go down the mining tax route with advertising, and make the new profits tax an issue of basic competence and sovereign risk, that will potentially activate the Coalition base. John Howard was an interesting barometer of that this week.
The other area of vulnerability for the government is the “we are fair story” – one of the central narratives of the budget – has a few obvious wrinkles.
The government coughed up its revised ten-year figure for the cost of the company tax cut on Thursday – a whopping $65.4bn. Big companies are getting a tax cut (Senate willing). People on incomes over $180,000 are also getting a tax cut from 1 July with the end of the 2% deficit levy.
But the government proposes to increase the Medicare levy right down the income scale to fund the NDIS, because it’s fair that we all kick in. It is fair, conceptually, that we all kick in, but the distribution of the pain matters.
Let’s also take a quick look at a specific cohort. University graduates also face a big squeeze. A calculation by the West Australian newspaper this week suggests university graduates on incomes of $44,000 will cop a big hit courtesy of the government’s higher education changes and the Medicare levy increase. That analysis suggests a single person will pay $660 a year in extra tax from 2019-20 – which is quite a whack, particularly when you factor in the price of housing in the capital cities.
It will take a while for all the elements of the budget to filter through into public consciousness, and for voters to form judgments, and as I said on budget night, I’m not sure yet how receptive the voters are to listening, particularly when the budget has several messages rather than one, clear, cut-through message.
If you are consuming all this at a distance, you might struggle to articulate what the past week was all about.

Despite the government moving aggressively to reframe the political contest, by attempting to neutralise the areas where Labor’s attacks have been most effective, Bill Shorten managed to get through the week on his feet, mostly by sticking relentlessly to Labor’s plan, and by deconstructing the fairness narrative.
Shorten’s budget reply speech was too much in the mode of hectoring with a loud hailer on the back of a flatbed truck – he has an affectation with his delivery which makes him sound performative and staged rather than real – but the speech was relentlessly on message, goading Turnbull to bring Labor a fight on fairness.
Labor is confident it can win any political fight in that frame.
But Shorten has his own challenges. While the government has used this week to try to reset the political centre, inside Labor, there’s a rolling conversation about a couple of important things.
The first is where the economic policy centre of gravity for them should be at the next federal election – Australia’s own version of Clinton v Sanders; and the second is just how heavy you go on all the new nativism and jingoism the political hard heads feel is essential to winning seats in regional Queensland – the “Aussie, Aussie, Aussie; oi, oi, oi!” rhetoric might resonate in situ but feels way out of sync with the sensibilities of inner city progressives.

Those conversations are still playing out.