View from The Hill

View from The Hill

Horror budget gets a bitter reaction from public and premiers

There isn’t much in the latest Nielsen poll for Prime Minister Tony Abbott to smile about. AAP/Lukas Coch

The Abbott government does indeed face a budget emergency – how to handle a massive public fallout and a full-scale revolt by the states.

The Nielsen poll shows the cost to the government and to Tony Abbott of breaching trust.

Who would have believed that Bill Shorten would now be leading Abbott 51-40% as preferred PM? Probably not even Shorten, whose performances haven’t received rave reviews.

That Labor has a 56-44% two-party lead, with the Coalition’s primary vote down 5 points to 35%, is a measure of people’s disgust with how they have been lied to and treated derisively, as well as their reaction against specific nasties in the budget.

It has shades of the Keating government’s 1993 trauma, though after that horror budget the ALP’s primary vote was down 10 points.

A conflicted Abbott continues to try to dismiss or get round his deceit. Interviewed on the ABC on Sunday his words from opposition were played to him. “If we do win the election and we immediately say, ‘We got it all wrong, we’ve got to do all these different things,’ we will instantly be just as bad as the current government has been and I just refuse to be like that.”

Confronted with this, what did he say? “I believe that we have fundamentally kept faith with the promises that we made pre-election. … We did say that we were going to get the budget back under control and I believe that this was what the people of Australia elected us to do.”

In that interview, he also said that “people hear different things”.

This is adding insult to injury. If, when he made his promise not to raise tax (to say nothing of a raft of other undertakings), it had been put to him that this had no status, that he was really only saying he’d fix the budget, he’d no doubt have reacted with outrage.

The bottom line is that Abbott cannot be expected to have his word taken seriously again.

His confetti of pre-election promises restricted what could be done in the budget and then the breaking of so many of them cast a pall over the whole exercise and diminished his authority as leader.

The government has a huge task ahead to repair its position. It’s hard to know where it can start.

This had to be a tough budget but many of the government’s problems with it are of its own making. Things didn’t have to be this bad for the Coalition.

Apart from the falsehoods, the government failed to sell its “narrative” in the run-up to the budget and in its delivery because the story was exaggerated and over-hyped.

Clearly the budget is in need of fixing, especially in the medium term. The Nielsen polling finds that one in two people believe the budget is economically responsible.

But the crisis atmosphere the government tried to drum up was unconvincing, inviting public scepticism.

Joe Hockey’s talk that “everyone in Australia has to help to do the heavy lifting” made it sound as though the nation was engaged in some collective body-building exercise.

And the government’s insistence that its income tax surcharge (which has 50% public support) was all about fairness could not head off the correct perception (by 63% in the Nielsen poll) that the budget is unfair. Those at the bottom are being asked to “lift” weights way out of their class.

The public are also being asked to swallow propositions that stretch logic. Hockey on Sunday defended putting all the government’s savings from the Medicare co-payment into a new medical research fund by saying: “If we invest in the cure and discoveries now in relation to cancer, or Alzheimer’s or heart disease, if we find the cures, it will make massive savings for the health system down the track.

"We know one day someone will find a cure for cancer. Let it be an Australian and let it be us investing in our own health care.”

A huge part of the medical research world is looking for such cures. Wherever they were found, they would help enormously all countries’ heath budgets. But to link a boost in Australian research, desirable as that is, in such a direct way to later savings in the health budget is optimism over probability.

Publicly, the government is as dismissive of state concerns as it has (so far) been of those of the public.

When premiers and chief ministers, who convened on Sunday, called (for the second time) for a special meeting of the Council of Australian Governments (COAG) they got another “no” from Abbott, who would prefer to try and divide and conquer the state leaders.

His problem is that three of them are Liberal premiers with fast-approaching elections, who will be not just concerned at lost money but perhaps, at a more general level, that the currency of promises has been so spectacularly devalued.

The united approach across the political divide makes the states’ attack more potent (only West Australia was missing), as does the fact that Queensland’s Campbell Newman, no slouch when it comes to cutting, is the leader of the push.

The premiers are agitated not just that they face a massive $80 billion in cuts over a decade but that some of these will hit from July 1.

Abbott (speaking before the premiers’ meeting ended) said there was no hurry to discuss these cuts because they didn’t start for some years. The states quickly called him out on this.

In response to the Hockey strategy of trying to get straitened states to ask for changes to the GST, both states and voters have sent messages: the states have no intention of playing that game at this point and Nielsen found two-thirds of voters are against raising the GST.

As for the chatter last week that Abbott might consider a double dissolution at some time to deal with Clive Palmer: that could be about as foolish as making some of those wild promises - with more serious consequences. PUP increased its vote by 2 points to 6%. A quota in a double dissolution is 7.69%.