This week’s budget has helped entrench Tony Abbott’s leadership. That’s a blow for the Liberal aspirants but not necessarily for Labor, because it would prefer him to be the opponent at the election.
Labor sources think the budget is likely to help Abbott’s claw-back. But they believe an alternative leader would probably see the government better placed, come the poll that counts.
Abbott used to describe himself as a weathervane on climate policy but now that’s been extended to nearly everything.
A first budget laced with right-wing ideology is followed by one that’s being widely described as “neo-Keynesian”, or even the sort of budget a Labor government might have produced.
The public might be cynical about the U-turn but they’ll also be relieved at it. Longer term, however, there is the question of what this does for people’s trust in Abbott.
Voters can be fairly confident he’ll aim to stay in the middle ground until the election.
A timid Tony, however, will have problems with his election pitch and the voters will wonder how to read whatever he says.
The idea of putting up an ambitious tax agenda, for example, seems to have gone out the window. Changing the GST has been ruled out; this week the existing promise not to alter superannuation this term was extended beyond the election.
But if the voters at the election are presented with a timid-Tony set of promises and guarantees (as indeed they were at the last election) what will they make of them?
Will they think: “he’s learned some painful lessons and is a new man”? Or will they wonder whether on re-election he would morph back into tough Tony?
That’s for later. For now, the budget has given Coalition backbenchers something positive to take back to both Liberal heartland and marginal members’ territory.
You can’t go wrong, politically, throwing A$5.5 billion at small businesses. They’re everywhere. Many are run by traditional battlers, now including “Tony’s tradies”; others by smart young things with their bright eyes on the world. The range is endless: coffee shop, smash repairer, fashion designer, IT operator, dog washer.
Bill Shorten didn’t want a fight on this ground. Labor quickly promised to back the assistance, which would cut small business’s company tax from 30% to 28.5%. Then Shorten went further.
In his Thursday budget reply he called for bipartisan co-operation to get the small business tax rate down to 25%. Not that he was actually promising to do this, and certainly he was saying it would take a long time. But it was the ultimate touche.
The fate of much of the budget, especially the child-care package, rests with the Senate and will turn into a haggle over offsetting savings. We won’t know the outcome for quite a while but the Coalition will be set on cutting deals.
The government has made a serious hash of one of its savings measures: its banking of nearly $1 billion over the budget period by ending so-called “double dipping” that allows mothers to enjoy the full benefits of both employer and government parental leave schemes.
This measure was always going to be tricky to justify because it contradicted Abbott’s former stand of wanting to give large sums to higher-earning women.
But Social Services Minister Scott Morrison and Treasurer Joe Hockey didn’t have to suggest the present arrangements amounted to a rort and fraud. And especially best not to when the wives of a couple of their colleagues, Assistant Treasurer Josh Frydenberg and Finance Minister Mathias Cormann, had indeed dipped twice.
Malcolm Turnbull’s nimble dance around the imbroglio sent a message about salesmanship – his colleagues’ and his own. “I respect every mother and I believe people are entitled to use whatever benefits, claims and entitlements, if you like, that are available to them,” he said. “But the reality is we live in a world of scarce resources … so we have chosen to re-prioritise.”
Despite the hypocrisy and stuff-ups, the actual decision is reasonable enough. The double dipping wasn’t a rort, because that’s how the arrangements were structured, but the savings can be justified on fairness grounds.
A ReachTEL poll of 3180 for the Seven Network done on Wednesday night gave a snapshot of people’s early reaction to the budget. Asked whether families or businesses had benefited most, 80% said businesses. And on the sensitive question of whether they and their family would be financially better or worse off as a result of the budget, 53.3% said about the same, 30.3% thought worse off and 16.4% felt they’d be better off.
Shorten had a harder gig than last year in his budget reply. There were fewer new nasties to hit (though he could make much of the recycled ones). Also he is under constant pressure from the government and the media to announce policy, costings and savings.
Apart from the nebulous play over the small-business tax cut, Shorten reached into his policy bag to produce initiatives in hot-button areas – including teacher training in science and technology, and encouragement for entrepreneurship in the new economy. He spent $350 million on the night, which he probably considered a reasonable investment for a budget reply with sufficient substance to get him by.
And what of embattled Hockey, the man who actually delivered the budget on Tuesday night?
The budget has jacked him up from the political floor, although how its numbers will look in a year’s time remains to be seen. But the damage the 2014 budget did to Hockey was so great that it will dog him for the rest of his political career. The best he can probably do is some self-repair – full recovery would take a near miracle.