Analysis
Posted
Members of the House of Representatives had mostly
left Canberra by Friday morning, leaving their colleagues in the Senate
to go through the last spasms of Estimates committee hearings about the
Budget.
There was a strong sense of time-filling around Parliament
House as everyone waited for the Prime Minister to finally put the 45th
Parliament out of its misery and go and see the Governor-General.Pragmatists in Government ranks shrugged their shoulders and predicted Labor would win by at least 10 seats.
Some even quietly welcomed the prospect of a generational clean-out, after the bitterness that has left the Coalition struggling to govern coherently for much of its time in office since 2013.
But let's not get ahead of ourselves about the election campaign just yet.
There's been a Budget, and a Budget speech in reply this week, and much else besides, that tells us a lot about how the two sides of politics go into the campaign, and what we are going to hear about for the next month or so.
But the past week has also given cause to consider how crippled our policy debates have become in the face of internal party dysfunction; how politicians, struggling to maintain some ultimately non-credible face of unity, drag tired old political cliches off the shelf and try to shape them into something befitting the times. Which they rarely do.
The presumptuous tense
Having carried on so much about the importance of getting the Budget into surplus before it got into office, you could understand why the Coalition has been so fixated on "achieving" that feat.Except, of course, the only feat it achieved was forecasting a surplus for next financial year.
All that use of the present, or even past, tense (for example, "we are back in the black") was spectacularly presumptuous.
Equally, despite the promise by Tony Abbott and Joe Hockey in 2013 of a budget surplus equal to 1 per cent of GDP within 10 years, it seems reaching that goal is still not as imperative as offering tax cuts to voters.
So the 1 per cent target was pushed back in this week's Budget from 2024-25 (10 years after the Coalition's first Budget) to 2026-27.
As is so often the case these days, that's so far away in political time as to be depressingly laughable: at least two more elections and goodness only knows how many treasurers and prime ministers away.
The downside to long-term thinking
Making promises so far down the track is one of the reasons why voters don't listen to politicians anymore. And that applies to everything from budget surpluses to tax cuts to infrastructure projects.
But making those long-term promises — in the interests of looking like you are reaching your own goals — also has a terrible effect on our public discourse. Talking long term should have some upsides, you might think, because people are thinking long term. But when they are just talking long term because they are stretching out stuff they can't do in the short term, that isn't the case.
Take tax cuts as an example. Josh Frydenberg's Budget this week essentially matched tax cuts that Labor had promised voters at the low to middle-income end of the tax scale in response to Scott Morrison's Budget last year.
But it also foreshadowed big tax cuts for high-income earners down the track.
Let's face it, since not many people think the Coalition is going to win the election, there has been even less focus than usual on its long-term plans, just assessments of how its offering up front might affect its campaign competitiveness.
As former treasurer Peter Costello observed this week:
"We've stopped promising things for the year head, we've stopped promising things for the next term, we've stopped promising things for the term after the term, even. We're promising things in the term after the term after the term."But the plans to lift the top threshold of the 19 per cent tax bracket from $41,000 to $45,000 in 2022-23, and then, in 2024-25, reduce the 32.5 per cent tax rate to 30 per cent, would represent a huge change in the progressive nature of the tax system and make it, instead, very flat.
"From 1 July 2024, Australians earning between $45,000 and $200,000 will face a marginal tax rate of 30 per cent," the government handouts pledged.
Yes, and the result would be a tax cut of $11,000 a year for people earning $200,000 a year.
It might be a great promise to people on $200,000 a year. But it is being made at a time when arguments about inequality shape the political landscape.
The progressiveness or flatness of our tax scales was something that was hotly contested through much of the 1980s and 1990s. But somehow the never-never sense of such reforms now has deprived them of the political urgency they once had.
But for a Government that doesn't have a lot that it can safely talk about without starting an internal war, the conflicting goals of budget surpluses and tax cuts are juggled off into infinity to give a veneer of structure to its reason for existence.
The Shorten difference
Of course, it is important to throw in a significant dose of "congestion-busting" infrastructure for good measure. But this too runs into time difficulties when you are arguing for smaller government (when it comes to taxes) while boasting about the value of government spending (when it comes to building infrastructure).So most of the Coalition's infrastructure promises this week also don't really kick in until four years from now — when they don't have to be brought to account in the current Budget numbers.
The Coalition seems to have painted itself into a fiscal corner of tightness akin to so many of its other policy positions, such as those on energy and climate change.
And that, apart from voter dislike of unity, is the source of one of the biggest threats posed to the Government by Labor and Bill Shorten.
The Coalition can yell all it wants about Labor's $200 billion in extra taxes. But the Opposition Leader isn't pretending that Labor isn't going to try to raise more revenue. He's just now able to boast about what he will do with it. And how he would do it from the day Labor would win office.
As Peter Costello would put it, Shorten is promising things for the year ahead and for the next term. He's promising a government that will do stuff.
His biggest challenge will be overcoming the cynicism of voters who have been told for too long to look into the never never.
Laura Tingle is 7.30's chief political correspondent.
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