The reform debate in these first days of Malcolm Turnbull’s government is dominated by a huge laden table, from which nothing is being removed.
That, together with the new prime minister’s invite-everyone-in style, is making people – political insiders and the public – feel good, or at least better than they did. The wonder is that the old regime didn’t understand the benefits of such inclusiveness.
Thursday’s meeting between Turnbull and his economic ministers and business, union and community representatives had even the ACTU enjoying the warmth. Participants effused about how good the discussion had been, with the Business Council’s Jennifer Westacott saying the most important thing was “keeping stuff on the table”.
Turnbull is banking the love for when times get tougher.
Amid the glow, significantly and predictably there was no agreement in the room about change to the GST, nor what proportion of GDP the total tax take should be.
At some point the government will have to load a tray with items from the table and put it on offer. That’s when the debate about reform will get serious.
Neither Turnbull nor Treasurer Scott Morrison is anxious to rush to that stage, where the going becomes hard for the government.
Morrison is spruiking the benefits of a revamped tax system that promotes economic growth, without being drawn into how such a system would look.
He plays the tease: “I’ve set a clear rule for what we rule in and rule out and that is, does it help Australians work, save and invest?” The specifics are somewhere on the table.
Morrison says it’s important to have people understand the challenges of the tax system and why it should be changed. “If we’re just locked in a debate and a discussion about the features – well, I’ve described that as a bit of an accountant’s picnic.”
Accountants’ (or economists’) picnics they might be, but I don’t recall a tax debate – under Hawke-Keating in the 1980s, about John Hewson’s Fightback in the early 1990s, or John Howard’s GST later – that wasn’t as much about the detail as the concepts.
Put crudely, Morrison is saying that people need to be softened up before they’re hit with a package. That’s logical on one level, but if we think back to Joe Hockey’s multiple speeches, the softening-up seems to have been going on forever.
The first instalment of the detail will presumably come with the tax green paper that’s been in the works for release this year. Turnbull has refused to lock himself into a precise time for that.
On tax, there are plenty of experts and a multitude of stakeholders. Morrison will need to be able to carry both the technical and wider popular debates.
Facing a big sell on tax reform, a difficult economic outlook, and a crucial budget update in December, the new treasurer will be tested to the limit.
Morrison is a good retail politician but previously he has been able to impose a high degree of management on issues. His practice of refusing to talk about “on-water” matters when he was immigration minister became notorious.
A treasurer does not have such luxury. Much of what happens in the Australian economy is determined by developments overseas and part of the job is to interpret the world to the domestic audience.
When he was questioned about China this week, Morrison seemed less than comfortable. Asked whether China was going to grow more strongly or weaken, he said: “I will leave others to make the forecasts on this and it is not my job to make those forecasts, there are plenty of people who will provide those forecasts.”
Morrison is working hard with his department to get across his daunting responsibilities and he is likely to be a quick study. He will be greatly assisted by Phil Gaetjens, joining him as chief-of-staff. Gaetjens was chief-of-staff to Peter Costello, and central to the Howard government’s GST.
But Morrison has taken an ill-judged approach in saying he will be a stay-at-home treasurer in his early days, concentrating on the domestic scene and leaving the international meetings to colleagues. Finance Minister Mathias Cormann is off to the imminent clutch of International Monetary Fund, World Bank and G20 finance ministers meetings in Lima.
Other demands notwithstanding, a new treasurer operating in an uncertain world needs quickly to get face time with leading economic figures. There is no better way to pick up the trends that will play a vital part in what happens in the Australian economy.
On another front, new Education Minister Simon Birmingham has had to announce the inevitable retreat on higher education fee deregulation that his predecessor Christopher Pyne, who famously described himself as a “fixer”, twice failed to get through the Senate.
With no hope of passing the changes for the start date of 2016, Birmingham said present arrangements would continue while he went back to the drawing board to seek a suitable funding basis for universities. “Any future reforms, should they be legislated, would not commence until 2017 at the earliest,” he said.
Reform of the university sector is still on the table, but now without shape.