If Scott Morrison ever watched Joe Hockey and thought “how much better I could do that”, he’s getting a rough lesson in humility.
First the treasurer ran out in front, pushing for a big bang tax package based on an increased GST. It ended badly, with a displeased Malcolm Turnbull. This week found Morrison at the National Press Club reining in expectations about the tax cuts to be delivered in the May budget – and then mauled in interviews for having had nothing new to say.
Given the circumstances, Morrison actually put in a reasonably solid Press Club performance. As Labor pointed out, when the gig was lined up he would have expected his speech to be preparing the way for his preferred option. By the time the day came, the air had gone out of the balloon – his task was to keep out of trouble, which he mostly did.
But in today’s voracious news cycle and after months of “conversation” about tax, an appearance without an announcement ensured he faced fire in the follow-up media.
Turnbull is relying on his popularity and style to help him through this policy-free period. In contrast, Opposition Leader Bill Shorten, unstylish and unpopular, is seeking to make himself “policy Bill”, with Labor’s proposed tightening of negative gearing his most recent initiative.
It’s obvious that the opposition is now ahead of the Coalition in the tax policy release contest. Whether this ultimately matters will depend on what the government eventually unveils, in the budget and before it. That inevitably will transform the debate – to the government’s benefit or its disadvantage.
Morrison on Thursday flagged an early statement on superannuation, saying the government hoped to “come to a landing point very, very soon” and that both he and Turnbull would like to make an announcement “sooner rather than later”. Superannuation is as sensitive an area as negative gearing so there will be some nerves on the Coalition backbench about where this “landing” will be.
Meantime the government is finding it hard to handle, in public terms, its tax vacuum. Slip ups will occur, as when cabinet minister Michaelia Cash on Monday left the GST rise on the table. Turnbull, who had already killed it, next morning had to put the matter absolutely beyond doubt, declaring “the government will not be taking a proposal to increase the GST to the election”.
Even after his retreat, it is tricky for Morrison to position himself safely until he can be confident precisely where the broad tax policy will settle.
Now that the tax reform challenge has to be reframed around a more modest solution, differences are on show about the nature of the problem.
Morrison is fixated on the threats posed by bracket creep, repeatedly denouncing it as a “growth killer” and a “job killer”. On Wednesday he made it clear that addressing bracket creep was still his priority for whatever cuts are affordable. But Finance Minister Mathias Cormann said pointedly on Thursday that with wage inflation comparatively low, “while the problem [of bracket creep] is there, it is not there to the same extent as it might have been in the past”.
The government will continue to attract negative commentary until it has something to say. But it can’t afford to be saying too much until it has finished policies, or it will just get itself into the sort of trouble that it did over the GST option.
By April 1, when the Council of Australian Governments is due to meet, it will need some answers for the premiers, whose moods must be pretty black. Two of them, NSW’s Mike Baird and South Australia’s Jay Weatherill, who canvassed packages involving a higher GST, were left on a limb by the federal back-off. And Turnbull and Morrison have been totally unsympathetic to the states’ calls for more funds to pay for health and education. With the bigger GST off the table, there wouldn’t be the money anyway.
Apart from delivering the final axe-blow to the already dead GST rise and making some criticism of Labor’s negative gearing policy, Turnbull kept to the margins of the tax debate during the week, much of which he spent with new Nationals leader Barnaby Joyce touring Queensland, where their stops included Cairns, Townsville, Rockhampton, Mackay and Bundaberg.
On Turnbull’s suggestion, at Thursday’s swearing in of new ministers and those with changed portfolios Joyce was sworn as deputy prime minister. This role is not an official one so Joyce, who is keeping his old agriculture portfolio, would not normally have had a formal part in the Government House ceremony. No-one can remember the last time a deputy prime minister was sworn into that position – Nationals sources think it could have been their legendary “Black Jack” McEwen. Joyce was pleased.
The tax debate might look like a bugger’s muddle but there were the beginnings of a Turnbull-Joyce bromance.