View from The Hill

Election this year? It seems unlikely

Prime Minister Tony Abbott and his government have been encouraged by the budget’s initial reception. AAP/Sam Mooy

A soft budget - if you overlook the nasty bits still there from last year – with more giveaways than takeaways inevitably fanned talk of a possible double dissolution this year.

The speculation had been already running. One theory was that it would be Tony Abbott’s way of holding off a leadership challenge. Also, it was noted that Abbott believes he could come from behind to beat Bill Shorten.

But, while anything is always possible, a 2015 election seems unlikely.

As a means of self-protection for Abbott, it lacks a certain logic. If things had got so dire, he’d probably lose the election. Then he would go down in Liberal history as a selfish bastard who put himself ahead of his party.

On Wednesday Abbott said: “We were elected to govern for three years. We were elected to implement our commitments over three years and that is certainly my plan”. He also said the election (due in September 2016) would be “about the middle of next year”.

‘Plans’ can change, and Abbott’s past words on various matters haven’t necessarily been an accurate guide, so what he says will be taken with caution. But when Joe Hockey addressed the subject there was a note of conviction and common sense in his response.

“You don’t give up government easily, I mean, by god you don’t,” he said. “I’ve lost government before, it’s a painful process in opposition… Damn hard to get back, you don’t give it up easily.”

Note Hockey’s emphasis on ‘losing’. An election this year would be high risk for the government, even if the budget becomes a positive, not least because it would test the patience of a cynical public usually not keen on being forced to vote prematurely. Queensland’s Campbell Newman thought it might help him to rush his poll – it didn’t.

While some argue that speculation about an early election keeps the Coalition troops in order, there can be a downside for a government desperate to boost business confidence.

Election talk encourages caution. As Business Council of Australia’s CEO Jennifer Westacott says: “business does need a period of stability… We’ve got a budget that I think will restore business confidence, but business needs the headroom now to say - particularly small business - do I put on extra staff? Do I upgrade my office? Do I grow my business?”

Although an election this year appears unlikely, the budget heightens the continuous campaign that dominates a large part of the modern electoral cycle. Being on the hustings has been Abbott’s strength in the past and for him a ‘faux’ campaign is next best to the real thing.

The government has been encouraged by the budget’s initial reception.

The big winners were small businesses; they were targeted for economic reasons but also because this sector is a vital part of the Liberals’ natural base.

Abbott is talking about “Tony’s tradies” being encouraged to “have a go”.

Labor is on board with the small business stimulus, but remains trenchantly against last year’s proposed changes to family tax benefits (FTB) which are now slotted to pay for the child care package. Given crossbench worries about the FTB cuts, the government will have to be flexible to get a deal with crossbenchers. Independent senator Nick Xenophon is already canvassing about alternative savings.

The Senate will be easier (but not easy) with this budget. Finance Minister Mathias Cornmann on Wednesday was talking up the prospect of a better relationship with the Greens now Richard Di Natale is leader. Cormann will be looking to the fuel indexation rise already operating that requires validating legislation within months.

The government’s crackdown on so-called ‘double dipping’ on parental leave is causing it grief, because it went back on everything Abbott stridently proclaimed on PPL until recently. The issue blew up on Wednesday in parliament when Abbott claimed the opposition was misquoting Social Services minister Scott Morrison and Hockey. The ministers had argued that ‘double dipping’ was a rort and a fraud (Hockey had agreed with the interviewer’s use of the word “fraud”). Liberal senator Arthur Sinodinos later said pointedly: “it’s not a good look to be having a go at the young mothers or new mothers of Australia and I think some of the language has been a bit unfortunate.”

On Thursday night the attention switches to Bill Shorten, when he gives his budget reply.

These are tricky exercises, especially to get the right balance between negative and positive pitches. Shorten will focus on the future and on jobs, highlighting peoples’ worries about their kids’ employment prospects. He’ll put out some policy, to meet the expectations of the occasion. Budget replies have become more important in recent years, and this will be a significant moment for Shorten in the ‘faux’ campaign.

Listen to Michelle’s podcast coverage of the budget, with interviews with Finance Minister Mathias Cormann, Labor’s finance spokesman Tony Burke and BCA chief Jennifer Westacott, here or on iTunes.