As the treasurer lauds supply-side economics, a once-controversial recovery theory is gaining traction.This is the essence of modern monetary theory – that government budgeting is nothing like household or business budgeting, for the simple reason that government can create money.
The Coalition’s Delusional Conservatives explained
The panic down the phone was almost palpable. “These people are capable of anything. They are zealots.” The veteran Liberal, who sits in a marginal seat, wasn’t talking about the Taliban or Daesh. He was talking about the Delcons, the rigid conservatives within the Coalition who still believe Tony Abbott and his agenda is what Australia wants and needs. Hence the moniker: Delusional Conservative; Delcon for short.
What triggered the outburst was the news earlier in the week that dumped defence minister Kevin Andrews was prepared to challenge for the Liberal leadership if circumstances similar to the 2009 dethroning of Turnbull occurred again. Andrews is one of Tony Abbott’s staunchest allies. He, like the sacked PM, spent most of the week on the annual Pollie Pedal – a charity fundraiser that allows Abbott to give his body the ultimate workout in a good cause besides his fitness regimen.
The circumstances in 2009 were Turnbull’s support for a compromise he hammered out with Labor prime minister Kevin Rudd for an emissions trading scheme, putting a market price on carbon. Abbott and the Liberal conservatives, backed strongly by Barnaby Joyce and the Nationals, hated it. Their ultimatum to Turnbull: “Dump the policy or we will dump you.”
Back then, Turnbull said he would not lead a party that did not take climate change seriously, and the rest is history. In that episode, Andrews played the role of stalking horse, announcing he would run against Turnbull, which set up the showdown that saw Abbott take the leadership by one vote in the party room.
The same alliance successfully sought to handcuff Turnbull to its core agenda when he made his lunge at Abbott last September. Then the Nationals had the extra clout of being needed by the Liberals to maintain a majority Coalition government. While some of Turnbull’s closest supporters urged him to call the Nationals’ bluff, he was more intent on a smooth transition.
But if you compromise with zealots all you do is encourage them to keep threatening to blow up the joint. And don’t worry: Turnbull is learning that at great cost. His appeasement of the conservatives has made him look indecisive and, worse for his credibility, prepared to ditch long-held contemporary views attractive to mainstream voters.
The most dramatic recent example of this was Turnbull and his attorney-general George Brandis deciding to shelve plans to reveal before the election the terms of the plebiscite for marriage equality. So fierce is the push-back, they judged the fight was just not worth it so close to the looming poll. A foretaste of the passions and the bigotry the issue rouses was the Safe Schools intervention. Tony Abbott, despite funding the program designed to combat bullying of same-sex attracted and transgender teenagers, now condemns it as social engineering and called for it to be scrapped altogether. Turnbull settled for “gutting” it, which kept another Delcon, George Christensen, happy.
Andrews’ willingness to step into the leadership breach set the scene for this week’s Newspoll. For the first time since Turnbull took the top job, Labor hit the front, 51–49 per cent two-party preferred. Two previous polls had it in line-ball territory. Andrews may be the quintessential Delusional Conservative, and many are inclined to dismiss him as such, but he is a senior backbencher and a former cabinet minister who is not alone in the party. If the deputy leader vote in September is any guide, he has at least 30 like-minded mates. “The last thing we need right now,” one dismayed government MP told me, “is Andrews raising the whole leadership issue again.”
This is especially so as research by the Liberals’ pollster Mark Textor has found Australians are wanting a return to government stability. A vote for Bill Shorten would mean the sixth prime minister in as many years – and that’s the government line we are sure to hear more of in the 100 days ahead. Andrews didn’t really kill off the prospect when he told Sky News: “At the present time Malcolm Turnbull is the prime minister and he will take us to the next election.”
What about after the election? That question becomes lethally relevant if, as the polls suggest, we are heading for a hung parliament. Independent analyst Andrew Catsaras says the average of the latest round of published polls has it 50.4–49.6 per cent the government’s way. That represents a 3.1 per cent swing away from the Coalition since the election and, according to the ABC’s Antony Green, a notional loss of 11 seats for a bare majority of one. Even if the Delcons actually get behind Turnbull in the greater cause of a Coalition victory, they are serving notice they will never defer to his “leftie” inclinations should he want to activate them. A near-run thing would weaken his ability to stand up to them, if indeed that is his mindset anymore. If he does defy them on a policy issue they feel strongly enough about – think same-sex marriage or carbon pricing – the “circumstance” would be there for Andrews to launch a challenge.
The prospect had industry minister Christopher Pyne apoplectic on the ABC’s Q&A. He insisted Turnbull was and would remain the prime minister right through the next term if he won the election. He had better hope voters believe him. Newspoll had another reality check for those who see the tightening of the polls as vindication for Abbott’s still-held view that he could have won the election if his party left him in place. It found that 57 per cent of voters believe the Liberals did the right thing dumping him. And that includes 57 per cent of Liberal voters. Turnbull is also far and away the preferred Liberal leader.
Abbott as the leading Delcon is languishing 17 points behind. But he is still on the radar. His resentful presence continually threatens to overshadow the man who replaced him.
But what is slowly dawning on government MPs, particularly those in marginal seats, is that Labor’s Bill Shorten is a much more formidable opponent than they want to acknowledge. Sure, they can take heart from the fact Turnbull is still almost twice as popular as preferred prime minister, but even there the trends are all in the wrong direction. Turnbull is diving, Shorten is slowly climbing out of the cellar. It would pay them all to remember that in politics everything is relative. Six months ago Shorten was the preferred PM relative to Tony Abbott, and Labor hit 57 per cent two-party preferred.
The realisation is sending shudders through the Coalition’s second most marginal seat-holder, the member for the Rockhampton-based seat of Capricornia, Michelle Landry. She says voters are getting tired of a “lack of direction”. She says the message is “wishy-washy” – not clear at all at this stage. It is not clear because, apart from aspirations for growth and jobs and an airy-fairy innovation statement, there is no economic or tax plan to defend.
That is still to come and it is increasingly obvious that if Scott Morrison and Malcolm Turnbull get this wrong on budget night there will be no easy walk away as there has been on GST rises, negative gearing and state income tax sharing.
Just as loose lips sink ships, loosely disciplined messages 100 days out from a probable July 2 election can be an Exocet missile. State school funding is an ominous example. The day before the premiers’ meeting, Turnbull mused on Radio National Breakfast that if the states had to raise the funding of their schools from a share of the income tax base, “would they not do a better job of managing those schools themselves?” That funding is $69.4 billion over the budget forward estimates. While the states rejected raising income taxes themselves, still up for discussion is their access to 2 per cent of income tax revenue raised by the feds. The clear impression was this money would then be used by the states for their schools and hospitals.
But on the Friday Turnbull acknowledged it would not be enough to fund “the full Gonski, whatever that means”. Gonski here is shorthand for student needs-based funding to reach improved national benchmarks. Leaving it uncertain is more than enough for Shorten to be off and running with the potent line, “I am launching our campaign to protect schools funding from the federal government to the state schools system across Australia.” One Liberal MP fears this impression, if allowed to run, could be devastating. Some 70 per cent of the nation’s kids are educated in the state systems.
The Prime Minister’s Office went into damage control overdrive. The idea of the Commonwealth not also funding state schools “died at COAG on the Friday”. It’s just that the PM hadn’t started to bury it for another four days. The PMO released budget figures to show Canberra is pumping record amounts into public education. It described Shorten’s attack as “a lie”. Turnbull called it “irresponsible scaremongering”, which is not a bad description of his attacks on Labor’s negative gearing proposals.
Shorten has already pledged $37 billion over 10 years to fully fund the Gonski reforms. He will pay for it by, among other things, raising the tobacco tax. Still to be explained by Turnbull is how he will fund his promise of an extra $30 billion for defence over the same period.
Even if Turnbull does finally get his act together he has to worry that the Delcons won’t morph into Daleks and prematurely exterminate his political career.
This article was first published in the print edition of The Saturday Paper on Apr 9, 2016 as "Masters of delusion".
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