Scott Morrison’s pre-election budget has gifted $22 million to a small arts organisation in the country’s most marginal seat – Gilmore – where the Liberals hope Warren Mundine can hang on. By Karen Middleton.

Art trust wins in election budget

The news that the small Bundanon arts trust on the New South Wales south coast was to receive $22 million stood out in this week’s pre-election budget as one of the few allocations to the nation’s cultural institutions.

After a five-year austerity drive, which has seen these institutions forced to cut jobs, rely on a casual workforce and shelve upgrade plans, the sizeable sum given to the Bundanon Trust surprised many.

The trust is owned by the federal government and was established in 1993 when artist Arthur Boyd donated to the people of Australia his heritage-listed 1866 sandstone homestead, Bundanon, and the surrounding 1100 hectares of bushland.

On top of its annual funding of $1.5 million, Bundanon’s three-year $22 million special budget allocation, starting with $6 million in 2019-20, looked relatively small, tucked between the billions for tax cuts, infrastructure, health and education on Tuesday night, all delivered in anticipation of the looming federal election campaign.

But it is a massive funding injection for a single arts institution of its size and comes after another $8.5 million grant to Bundanon from the NSW government just last year.

The trust’s chief executive, Deborah Ely, says it has been circulating a rigorously reviewed business case and lobbying for funds to expand further into education and tourism for several years.

“We’ve been extremely open about it,” Ely says. “I’ve been banging the drum at every level of government, every business dinner, saying, ‘We need $22 million.’ ”

Among the other cultural institutions, the need is not disputed. A bequest such as Bundanon – a heritage property without the funding to maintain itself – creates complications for governments.

But the timing of the grant is noteworthy.

Bundanon is located in Nowra, in the Shoalhaven region, and falls within the electorate of Gilmore, which is currently held by the Liberal Party. Gilmore is the nation’s most marginal seat.

It was also the scene of a Liberal preselection brawl late last year that saw incumbent MP Ann Sudmalis retire in the face of a challenge from businessman Grant Schultz, who was backed by local powerbroker and state Liberal MP for the overlapping seat of Kiama Gareth Ward.

In December, Ward was overruled and Schultz was dumped as the preselected candidate when Prime Minister Scott Morrison decided instead to install high-profile Indigenous leader and former Labor Party president Warren Mundine.

Schultz, the son of the late former Liberal MP Alby Schultz, remains angry about his treatment and is now running as an independent. The ill will that the whole stoush has created among Coalition supporters prompted Nationals federal vice-president and former NSW MLA Katrina Hodgkinson to also nominate for Gilmore and give disillusioned Liberal voters an alternative, creating a three-cornered contest between the major parties. Under the terms of the Coalition’s internal agreement, both parties may run a candidate in the same seat only when a sitting MP is retiring.

As a local MLA, Gareth Ward has been a forceful and successful advocate for the Bundanon Trust and was instrumental in securing the $8.5 million state grant in 2018, along with other previous funding.

Ely credits Ward’s efforts as having contributed to this week’s new funding, which she says will enable the creation of 69 jobs across the region.

Details of the federal grant were leaked to The Australian two days before the budget and Ely only found out it was coming when a journalist called her on Sunday.

Labor has committed to also fund the redevelopment project if it wins government.

The grant is just one of many pots of money Tuesday’s budget made available for projects and programs in marginal seats in the lead-up to next month’s election.

A $100 billion 10-year infrastructure program – of which only $42 billion falls within the four years of the budget’s forward estimates – includes a billion-dollar top-up to the government’s existing “urban congestion fund”.

Half of that extra money is earmarked for commuter car parks at railway stations in as-yet-unspecified locations, to encourage commuters to park and ride.

There is funding for a rail link affecting swinging seats in Western Sydney and another fast-rail upgrade for the Melbourne-to-Geelong line, through the Labor-held seat of Corio and affecting the neighbouring marginal Liberal-held seat of Corangamite.

There is also funding for regional fast-rail links from Sydney and Melbourne and from Brisbane to the Gold Coast and Sunshine Coast, albeit over the long term. There is a further $530 million for anti-congestion measures in Tasmania.

Half of the budget’s $2 billion allocation for local government grants is being rolled out before the end of the current financial year, also in the election context.

There is $3.2 billion set aside as “decisions taken but not yet announced” – a war chest for the next six weeks of campaigning.

The budget includes savings of $2 billion from a move to prevent a repeat of last year’s robo-debt welfare benefits controversy by having beneficiaries report any extra income as it is earned, knocking more people off their benefits sooner.

It also reveals that reopening the Christmas Island immigration detention centre, a move that followed the passage of the medivac bill, will cost $150 million this year, but that the government plans to close it again by July 1. On Thursday, the Home Affairs Department secretary, Michael Pezzullo, told a senate estimates hearing that only one person had been transferred from offshore detention for medical treatment since the legislation passed – and they had gone to mainland Australia, not Christmas Island.

The political nature of this week’s federal budget document was confirmed officially even before it had been tabled, with Treasurer Josh Frydenberg and Finance Minister Mathias Cormann revealing during their news conference inside the media lock-up on Tuesday afternoon that they would not try to get it through parliament until after the election.

Flagging that the $158 billion in extra income tax cuts on offer would not be legislated in the two sitting days this week, Cormann said: “It is going to be up to the Australian people to decide whether they back us in to deliver the income tax relief for hard-working families after the election.”

However, an expanded instant asset tax writeoff will be claimable for purchases made after 7.30pm on Tuesday.

The other budget element the government moved to legislate immediately was its one-off cash handout to low-income earners, described as an energy payment to help with power bills.

Initially excluding those on Newstart from the payment – including in the budget papers – the government changed position on the payment overnight, after Labor circulated an amendment to the legislation that would extend it to include the unemployed.

Frydenberg revealed the change during an interview on ABC Radio the next morning. He, Cormann and Scott Morrison had decided to make the change late on budget night, the treasurer said.

The highly unusual amendment, which will cost an extra $80 million, prompted shadow treasurer Chris Bowen to declare the budget had been discredited “before the ink was dry”.

With the government behind in the opinion polls and needing to win every seat it holds and more to stay in office, the budget’s contents and proximity to the election reflect the sky-high political stakes.

Overall, it has been designed primarily to back in the Coalition’s main campaign argument: that it can be trusted to run the economy and Labor can’t.

Central to that is a $7.1 billion surplus forecast for next financial year – with the budget still $4.2 billion in deficit for 2018 – prompting Frydenberg to steal predecessor Peter Costello’s 1998 budget boast: “We’re back in the black and back on track.”

Unlike Frydenberg, Costello used the slogan when the budget was already in surplus, not a year away from it.

But it enables Frydenberg to claim the first surplus in a decade, highlighting that Labor has not achieved one since 1989 and arguing that the Coalition can both spend and save.

The government’s surplus is drawn from reclaiming a $3 billion underspend in the National Disability Insurance Scheme and from a recent hike in commodity prices and company tax receipts.

In the budget’s media lock-up, Cormann told journalists the government had deliberately used extremely conservative commodity price estimates in recent years.

That insulated against a budget blowout in the event that prices – and therefore revenue – remained low. It also guaranteed a huge windfall and election-fighting fund if they rose to match Treasury’s upper-limit projections.

Frydenberg and Cormann have not chosen to be as cautious on wage forecasts, which have come in below the forecasts repeatedly and again in this budget.

That is prompting economists to warn that, along with other headwinds the budget describes, including significant international economic risks, overly optimistic forecasts could yet undermine the surplus path and blow the economy off course.

The government is running hard on its economic record and has moved to try to neutralise Labor’s policy strengths in health, education and training, with funding for aged care, and early childhood and vocational education, including subsidies for 80,000 new apprenticeships.

The allocations include $500 million for mental health services and an early end to the freeze on Medicare rebates for GP services.

Making his budget reply on Thursday night, Opposition Leader Bill Shorten sought to play to his party’s political strengths, emphasising more funding for technical and further education and incentives for 150,000 new apprenticeships, arguing this would restore what he says has been a net loss under the Coalition.

He promised to reduce the cost of cancer care by ensuring Medicare covers the whole cost of scans and consultations and putting more cancer-treating medicines on the Pharmaceutical Benefits Scheme.

His message was: “Cancer makes you sick, but it shouldn’t make you poor.”

Shorten hopes to neutralise the government’s tax concessions with his own version.

He amended the government’s proposed tax cuts, which would go to those earning up to $200,000, instead offering cuts only to those earning $126,000 a year or less.

To offset that politically, Shorten is offering greater tax cuts than the government for those earning less than $40,000, targeting that part of his package at “working mums”.

The Coalition is emphasising Labor’s plan to remove other tax concessions through abolishing negative gearing on new investment properties from January next year and ending franking credits on the shareholdings of non-taxpaying retirees.

“Bill Shorten and Labor can’t manage money, so they’re coming after yours,” Frydenberg said on Tuesday.

In turn, Labor called the budget little more than a campaign document and “a con”.

The day after the budget delivered its windfall to Bundanon, a parliamentary committee tabled a report on the national cultural institutions that urged a funding restoration.

The report recommends adopting measures to “offset the disproportionate impact of the efficiency dividend on small agencies including Canberra’s national institutions”.

Those dividends imposed upon the National Gallery of Australia, the National Portrait Gallery, the National Library of Australia, the National Museum of Australia and other institutions, mostly housed in Canberra, have compelled them to cut their annual budgets by up to 2.5 per cent.

It’s all confirmation that with an election looming it’s not just how much you need and for what, but who’s asking and where, geographically, it will go.

This article was first published in the print edition of The Saturday Paper on Apr 6, 2019 as "Art trust wins in election budget". Subscribe here.

Karen Middleton
is The Saturday Paper’s chief political correspondent.