Tony Abbott has removed a big uncertainty for voters, and simplified the opposition’s task, with his promise to retain the carbon tax compensation even after he gets rid of the carbon price.
The Coalition’s previous line that it would scrap “unnecessary” compensation but give people some unspecified tax cuts and welfare was always messy.
The opposition had not produced any detail about amounts or mechanics of implementation. Now it has cleared away a potentially difficult issue, although doing a somersault is always embarrassing.
The A$4 billion cost is being covered by some $5 billion savings, a number of them recycled from earlier announcements.
A significant new saving would be a two year delay in increasing compulsory superannuation from 9% to 12%. This was originally a measure supposed to be financed out of the mining tax, which the opposition decided at the time it it was politically expedient to accept. The delay would mean 12% would not be reached until 2021-22.
Abbott said the money for the ramp up came largely from business, not from government, and “our economy needs encouragement as mining investment starts to wane and new sources of growth are needed.”
It’s unlikely that the Coalition will take significant political heat over the delay because of the long time lag in the super measure. The security given by the compensation promise is likely to more than offset the negative from stringing out the super increase.
More politically controversial could be another clear indication from Abbott that he wants to shake off inheriting the Gonski school funding program.
This is in limbo with NSW Liberal government signed up, but other states still tooing and froing, and a deadline of June 30. Victoria has been making some negative noises this week.
Earlier, the opposition did not seem to want a battle over Gonski to be at the heart of the election but Abbott is showing every sign of not caring. This is an interesting political judgement.
In more “me too” politics, the opposition has sensibly accepted the government’s range of budget cuts. Using the fig leaf of this being a “budget emergency” it will “reserve the right to implement all of Labor’s cuts.”
In fact, Abbott and his colleagues must be privately thanking Labor for bringing in some difficult measures - the Coalition can use the funds from them while blaming its opponents for doing such things.
With the opposition taking on board the budget cuts, the government last night tried to turn the heat onto the Coalition’s cuts. But Finance Minister Penny Wong didn’t sound all that convincing. She was forced to resort to raising a scare about the Coalition’s planned commission of audit.
Abbott’s budget reply, by clarifying the Coaltion’s position on the future of the compensation payments, answered one significant question about his policy in government. But he still has much to reveal – including what would be his path back to surplus - and it will be well into the formal election campaign before we get the full detail.