Every budget is a combination of political theatre and hard policy. What sets each one apart is which element gets the most emphasis. It is now part of the national legend that the Abbott government’s first budget was overwhelmingly a policy exercise. In it, Treasurer Joe Hockey got to try out all of the memes and “tough” policy choices that he’d played around with in his head during his time in opposition and perhaps even well before that.
Medicare was declared unaffordable, so Australians would have to pay more to go to the doctor. The age pension was also becoming unaffordable, so the way in which future rises were calculated was to change too. Welfare costs were unsustainable, so under-30s would have to wait six months before qualifying for unemployment benefits.
University fees were to be uncapped. The Gonski funding plan for schools would be dumped in 2017-18. Thresholds and access to Family Tax Benefit B were to be tightened.
For those who had paid attention to Hockey’s 2012 speech to the Institute of Economic Affairs in London, these measures, along with many others contained in that budget, would not have come as a surprise. In the speech, Hockey declared an end to “the age of entitlement”.
As treasurer, Hockey applied a more positive spin on the same idea in his budget speech, saying of Australians:
We are a nation of lifters, not leaners.
The implication was clear: the bludgers in Australian society had a target on their foreheads.
It could be said that Hockey and Abbott’s policy toughness was itself the key theatrical element of the 2014-15 budget, that in making the “hard choices” they were demonstrating their political courage and resoluteness. It’s quite possible that in the cocoon in which leaders of modern governments operate, with their every public appearance being organised and sanitised by their advance staff so that no nasty surprises ever await them among the great unwashed, this was what Abbott and Hockey told themselves as they prepared the budget.
The backlash and the backdowns
But it was never going to fly. Despite the steady dismantling of conventional communications through the heritage media and the collapse of membership across all of the older political parties, there remains within the public a strong desire for accountability and authenticity from our politicians. If a leader and his chief economic spokesman spend three years in the lead-up to an election guaranteeing that they will repair an ailing public balance sheet simply by being elected, without the need to embark on cuts in services or new imposts, they cannot deliver a first budget that goes back on those repeated undertakings.
And yet that is what Abbott and Hockey did. They said there would be no surprises and no excuses for as long as they governed. Yet for the vast bulk of voters, who take only a passing interest in politics and do not read speeches given to London think tanks, this was a government full of unwanted surprises.
And the government paid a terrible price. The Labor Party and the Senate crossbenchers resisted most of the budget’s harshest measures in the upper house with the public’s support throughout the rest of 2014 and early this year. Things got so bad for the prime minister that he was subjected to a mock execution by his party room in February, with 39 Liberal MPs supporting a spill of his leadership, 61 voting against and one voting informal.
The single-most important political event to lead to Abbott’s near-defenestration (and Hockey’s too, because as the leader goes, so goes his treasurer) was the budget. This was not just because of the accountability issue and the fact that the government was going back so early and so comprehensively on its pre-election pledges. It was also because of the public’s assessment of the measures themselves.
Clearly, such measures as the GP co-payment and the uncapping of tertiary education fees have not accorded with the expectations held for Australian society by a very large cohort of the electorate. Would voters “buy” these policies if they were prepared for it and given eloquent and deeply felt explanations for the changes? It’s at least an intellectual possibility.
But it’s worth looking at the previous experience of a policy that comes from the same neoliberal, deregulatory impulse – the WorkChoices laws introduced in 2005-06 by the Howard government. Those laws took Australia’s labour market closer than it’s ever been to operating with what’s known as a market-clearing wage, in which the providers of labour have substantially reduced powers to set their price. Collective action was to give way, over a relatively short space of time, to individual negotiations and individual contracts.
The public would not cop it. The conception of Australian society held by most voters was that it was “fairer” than that. Pollsters calculated that more than 2% of voters were shifted directly from the Liberal to the Labor column at the 2007 election because of the policy, guaranteeing victory to the ALP under Kevin Rudd.
Can this budget pass the fairness test?
Interestingly, it was the same “fairness” test that rendered the first Abbott-Hockey budget so toxic.
Which brings us to budget number two, to be handed down next Tuesday. We will need to see it and absorb it before being able to judge if the apportionment of theatre and policy of last year’s effort has been inverted.
Most of the signs in the last three months suggest very strongly that the ideology has been set aside in order simply to survive. Indeed the entire intellectual and analytical framework that motivated the 2014-15 budget – that there was a desperate need to reduce the size of government in order to produce a budget surplus and reduce debt – has been discarded.
Now, Australia will balance its books some time. There is no longer any urgency, according to the government. It will be, the prime minister assures us, a dull budget - a remarkable claim by a serving leader, when you think about it.
The white pointer appears to be to transforming into a gummy shark, snapping away but incapable of doing much damage, either to voters or itself. But can it be that Abbott and Hockey have really abandoned entirely the nation-changing project contained in last year’s budget and that they want to be known more for winning elections than for leaving their mark?