The release of the tax policy discussion paper by Treasurer Joe Hockey more than 18 months into the life of the Abbott government offers important clues to the problems the Coalition has been suffering since it took office in September 2013.
When it comes to producing a comprehensive, far-reaching policy regime – a coherent vision for Australia’s society and economy and how to turn it into reality – the government is only getting started. Having spent the first half of its first term going in one direction, killing off Labor’s carbon and mining taxes and thoroughly mismanaging its attempts to hack into the budget deficit, it has stopped and is looking for another path.
It is now in search of an agenda.
The tax paper was initially set to be released before Christmas. But it was delayed for a variety of reasons, many of them political. Campbell Newman’s Liberal National government in Queensland was contemplating an early election, which eventuated in the bizarre and ultimately fatal decision to run a January campaign.
Then there was the matter of the Intergenerational Report, which by legislation was required to be released at the beginning of February. But it too was delayed, causing Hockey to technically breach the Charter of Budget Honesty. Eventually it was released on March 5.
Clearly, there was a logjam of policy reports. Further delaying the public delivery of the tax paper was the fixed election date in New South Wales last Saturday. The federal government would not have done well to issue a document that even hinted at such proposals as an increase in the GST during an election campaign.
And so, finally, with the Baird government re-elected, the discussion paper, canvassing all elements of the taxation regime, emerged into the light on Monday. Unfortunately for the government and for the voting public, it is just a discussion paper, posing a series of questions about the tax system.
The clock is ticking.
The government’s plan is for there to be a “conversation” throughout 2015 before another paper puts together policy proposals that the Coalition can take to the election scheduled for 2016.
It looks orderly and well-considered, but is it? It’s not certain that the government will wait until next year to hold an election. Prime Minister Tony Abbott and his treasurer are in survivalist mode, fighting for their own political lives. A snap double dissolution later this year cannot be ruled out.
Three Senate crossbenchers have told upper house colleagues in recent weeks that they were advised by government members during negotiations on the university fee deregulation bill that an early election was a genuine possibility.
The government has not gone public with this talk, but the prospect of an election is a time-honoured method for threatened leaders to try to relieve pressure and frighten off challengers. This was what Julia Gillard did in January 2013, announcing an election date almost eight months’ hence to demonstrate how decisive and “different” she was (that is, not a conventional politician), and to stave off, yet again, Kevin Rudd’s push against her leadership.
A few pieces of recent good news, and the willingness of the mainstream media to frame them as big positives for Abbott, will do little to discourage the contemplation of going early. Last week’s Newspoll, showing the government on 49% of the two-party-preferred vote, and the New South Wales election result, which can be portrayed as good for Abbott because it did not produce a Coalition defeat, assure Abbott of a few calmer weeks.
But the polls will resume after Easter, there is the task of putting together the 2015-16 budget and there remains the untidy matter of the abandonment of the government’s initial budget strategy.
This is a remarkable situation. A government that was elected on a promise of a budget surplus in its first term has dropped that pledge and is now saying a surplus will happen “as soon as possible”. Abbott, in trying to regain some sort of control over expectations of the government’s performance, declared that a government debt-to-GDP ratio of 60% would be a pretty good result because that’s around the OECD average. This is after stumping the country for years excoriating Labor for a debt ratio that was much less.
The danger for the government is that as it ditches policies and rhetoric, it will come to be seen as an administration with no discernible purpose, no overarching reason for holding office save for being preferable to the other guys. It must be said that this worked in the past; it is what motivated the Coalition on its path to power in 2010-13.
The chief message from Abbott, sold convincingly to a majority of voters, was exactly that: Labor is a disaster and we won’t be.
But electoral politics demands more than that after the transition to power. It’s one thing to neglect to put out an expansive plan for the nation before taking office. But it’s quite another not to try to take the people with you in the early months after an election win, when it should be easier to come clean about your intentions with a suggestible and relieved public.
Three years is an almost impossibly short period in which to present policy, sell it and enact it, much less see some results. All people who have experience inside government will tell you that there is not a moment to waste in office and there are very few chances to retrieve a botched policy.
Having sought to remake the role of government in their first budget – and having lost the political argument attached to it, along with the practical battle to implement it – Abbott and Hockey are cutting it very fine as they try to come up with new ideas and refresh the government’s reason for being.