View from The Hill

View from The Hill

With friends like the Feds, life becomes even harder for Napthine government

Victorian Premier Denis Napthine faces an uphill battle at November’s state election. AAP/Lukas Coch

On the ropes already and facing the polls on November 29, the Victorian Liberals have yet again been knocked by their federal colleagues.

Tuesday’s move to reintroduce fuel indexation by the tariff route, with the gamble that validating legislation will get through later, is a clever tactic from a federal government desperate to secure what it can of its outstanding budget measures.

But even a very small petrol price rise on November 10, as voters are tuning into the state campaign, is unhelpful for the Napthine government.

Harder to understand is the timing of Tony Abbott bringing the GST back onto the agenda.

Abbott was delivering a major speech on federalism at the weekend, as work continues on a white paper. But he did not have to include an explicit declaration that the federal government was willing to consider a deal with the states to broaden the indirect tax base.

That would mean increasing or widening the GST, or both. All GST revenue goes to the states.

Napthine retorted that he was “not interested in increasing the GST”, but Victoria did want a fair share of the revenue.

Napthine launched a further attack when the fuel hike was announced, declaring that “any increase in fuel excise hurts Victorian families and hurts Victorian businesses”. He pointedly added a dig about the way it was being done: “any such proposal, I would believe, should go through the proper parliamentary process”.

This week’s blows are the latest from Canberra to hit the Victorian government. The state budget was popular, only then to be overshadowed by the highly unpopular federal one.

There is plenty of opportunity in coming weeks for the state opposition to associate Napthine with Abbott and urge people to send a message to Canberra.

This week’s Galaxy poll has the state government trailing Labor 48-52%, although Napthine leads opposition leader Daniel Andrews as preferred premier 43% to 27%.

Liberal optimists say people haven’t tuned in yet and put Napthine’s chances of survival at 50-50. The more common view is that the government, which has operated in an often shambolic hung parliament, is headed for a loss.

ABC election analyst Antony Green says state Labor has been ahead in the polls since the change of government in Canberra. “Labor’s favoured to win,” he says. “Of the nine government marginal seats on the new boundaries, only three have sitting members to defend them.”

The fuel decision won’t help, Green says. “It’s one of the few costs men notice.”

Ironically John Howard scrapped indexation when, after the introduction of the GST, petrol prices featured in big backlashes in West Australian and Queensland elections in 2001.

Earlier this year the Liberals had hoped to pick up South Australia from Labor, which would have put all the states in conservative hands. They just missed out.

If Victoria were lost, two of the six states would be Labor. But in political terms, Victoria is much more crucial than South Australia.

A Labor win there would be important in the ALP national rebuilding effort. Queensland and NSW are set to stay in conservative hands when these states face elections early next year, but significant swings would affect the national political mood.

Defeat in Victoria would set back Abbott’s hopes of any big tax shake-up. He told the joint parties meeting on Tuesday that on the GST “nothing will happen unless all of the states want it, because it is a tax for the states”.

From the vantage point of Melbourne the Abbott government is very Sydney-centric. Not one of the four Liberal Party parliamentary leaders, or the treasurer, is Victorian. There are just four Victorians in the 19-member cabinet – Kevin Andrews (Social Services), Andrew Robb (Trade and Investment), Greg Hunt (Environment) and Bruce Billson (Small Business).

Although voters distinguish state and federal elections, if the Victorian Liberals lose, there is likely to be a good deal of that familiar federalism game of blame-shifting from Melbourne to Canberra.

Listen to the latest Politics with Michelle Grattan podcast, with Ken Wyatt here.

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