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Grattan on Friday: Can Malcolm Turnbull manage months of a deregulated tax debate?

Malcolm Turnbull, in Jakarta on Thursday with Indonesian President Joko Widodo, removes his suit jacket and tie in the Tanah Abang market. AAP/Eka Nickmatulhuda

Grattan on Friday: Can Malcolm Turnbull manage months of a deregulated tax debate?

Malcolm Turnbull, in Jakarta on Thursday with Indonesian President Joko Widodo, removes his suit jacket and tie in the Tanah Abang market. AAP/Eka Nickmatulhuda

It’s unlikely many ordinary people will care about a new revelation in the tale of the Turnbull coup, despite it causing something of a flurry among Abbott loyalists.

Wayne Errington and Peter van Onselen have reported in Battleground: Why the Liberal Party Shirtfronted Tony Abbott that Murray Hansen, chief-of-staff to deputy Liberal leader Julie Bishop, attended a crucial meeting of plotters the night before Malcolm Turnbull’s move against Abbott.

This fuelled the continuing anger of Abbott loyalists, who hold grudges against both Bishop and Scott Morrison for not making themselves human shields for the failing leader. Bishop was forced on Thursday to defend her actions, and her staffer’s presence at what she rather quaintly referred to as a “drinks night”. Turnbull had to fend off questions when he arrived in Jakarka on the first leg of his overseas trip.

But for most voters, the coup is now history rather than of contemporary relevance. The point is that people were glad to see Abbott ousted – in contrast to their shock at the 2010 dispatch of Kevin Rudd, who had lost popularity but retained a considerable degree of connection with the public.

While some Liberals will, not surprisingly, continue to chew a cud of bitterness as more tidbits emerge, out in the electorate people have moved on from the ins and outs of Abbott’s removal to what his popular successor will do.

From now until the election Turnbull does not have to watch his back or take too much notice of some malcontents in his ranks.

He has much bigger challenges.

Turnbull might have long dreamt about being prime minister but landing in the job with only a year of the term left means his government finds itself behind on major policy development. It has a formidable amount of work to do and a very short period to get it all done.

That’s one reason against an early election, even if Turnbull wanted one – and there is no evidence he does.

There has inevitably been policy slippage. The tax green paper was due out this year; now it has been pushed to next year, assuming the government doesn’t decide to skip straight to the white paper.

On a separate front, the defence white paper, delayed under Abbott but now written, is also in a timing limbo. There is the question of whether the new team wants to change the version prepared for the old team. Turnbull has been through the paper but needs to give it further attention; tyro Defence Minister Marise Payne has to do a lot of preparation for the public and diplomatic discussion that will come after its release.

The Turnbull government put aside the university deregulation plan it could not get through the Senate but has yet to replace it. This is a matter for the December budget update as well as an education issue – the government must decide what higher education savings it will continue to bank.

Turnbull is away from Australia until the week after next; he then quickly leaves on another trip which takes him to the Commonwealth Heads of Government meeting in Malta and the Paris climate conference. Keeping a hand from afar on the domestic tiller is never easy, and especially difficult when he and many of his team are new in their jobs.

One policy that is said to be commendably well advanced is the innovation statement. Most of the work is done, and the expenditure review committee has already considered it, with Turnbull present.

Innovation is a Turnbull signature area: when he is in Germany on Friday it will be a matter for discussion and announcements. The pre-Christmas statement will be a test for Turnbull – but a test on his strong ground.

A different order of challenge will be presented by the tax package, when the government next year finally has to rule in and rule out measures.

One of many complications is that tax is interwoven with the review of federal-state relations, which Abbott set up. And that review is said to be presently undercooked. The Turnbull government has opened a new front by putting pressure on the states to consider their own tax bases in looking for ways to fund their future spending needs.

The government’s softening up process on tax reform is to let the debate run but this carries the danger of losing control of it, including within its own ranks.

In the Coalition parties meeting this week, some backbenchers warned against an increase in the tax take, and arced up against any rise in the GST.

It is unclear whether there are differences between senior ministers over tax – for example about whether there is a revenue problem (denied by Morrison) as well as a spending problem and whether the states have a case for extra funding.

Abbott bought into the tax debate via an article in The Spectator, writing:

As a potential reformer, Malcolm Turnbull has the advantage of being relatively unbound by previous commitments but still faces the problem of how to deal with the ‘no one can be worse off’ mindset that makes serious reform so hard.

Precisely.

Reflecting both desperation and hope, Labor has obsessively homed in on the prospect of change to the GST as one of very few things going for it in the Turnbull era.

There is no doubt any robust tax package will be a tough sell for Turnbull, providing Labor with a readymade campaign pitch. But more notably, in opposition circles there is an air of resignation – a feeling that, as things stand, the ALP’s chance of winning the election has likely evaporated with the fall of Abbott. In Labor, as in the community, the zeitgeist has changed, but for it, not in a good way.