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Treasurer Scott Morrison’s plan to frame the coming budget as responsible investment was derailed this week by conflicting government messages. By Karen Middleton.

Morrison’s budget strategy stymied

Scott Morrison and Malcolm Turnbull at Melbourne Airport this week.
Credit: AAP Image / David Crosling

Treasurer Scott Morrison was supposed to be attending a round of meetings in Washington this week but stayed home to polish the edges of his upcoming budget. The plan was that he would carefully set the signposts for how it should be received.

In the end, however, he found himself having to publicly rebuke a senior colleague and reset a message that was veering alarmingly off course.

The Saturday Paper understands that planning for budget 2018 is actually ahead of schedule, or at least ahead of where it usually is three weeks out.

The most important deliberations were concluded early because a number of senior cabinet ministers, including key members of cabinet’s expenditure review committee, were going to be overseas this week and in the lead-up to budget day on May 8.

Prime Minister Malcolm Turnbull is in London attending the two-yearly Commonwealth Heads of Government Meeting and will spend Anzac Day on the World War I battlefields of France after opening the new Sir John Monash Centre at Villers-Bretonneux alongside the man whose government established it, his predecessor Tony Abbott. With four days to fill between the two events, Turnbull plans to swing through Berlin en route.

Other cabinet ministers are also travelling, including Finance Minister Mathias Cormann, who is deputising for Morrison in Washington.

In the first part of the week, at least, that theoretically meant some clear air at home for the treasurer, whose May budget’s multibillion-dollar infrastructure spending and expected tax cuts make running the usual profligacy argument against Labor much more complicated this year.

The plan was to argue this was a budget of responsibility that targeted spending to meet community need and to build a strong economy for the whole nation.

But Acting Prime Minister Michael McCormack’s decision to give an interview to The Daily Telegraph derailed Morrison’s plans and left the treasurer depicted as Santa Claus on the paper’s front page.

This was deeply unhelpful to the crucial task of expectations management among a taxpaying constituency both easily disappointed and highly sensitive to suggestions the government might be flinging around their hard-earned as if it hadn’t come from them in the first place.

“On May 8 – as on December 25 – Scott ‘Santa Claus’ Morrison will be announcing some goodies,” McCormack told the Telegraph.

“I can’t wait ... You need to keep things for budget night otherwise it’s like Santa giving the presents for the kids and then on the big day, on Christmas Day, the kids saying, ‘What’s in it for me?’”

Morrison had scheduled an interview with the ABC’s AM program on Tuesday morning to discuss a new research paper Treasury and the Home Affairs Department had prepared jointly – and conveniently published late the night before – on the economic benefits of immigration and the challenges it poses.

The research paper had found its way overnight onto the front page of another News Corp publication, The Australian, also therefore appearing on Tuesday morning.

This did not amuse Fairfax journalist Peter Martin, who revealed on Twitter that he had learnt of the research paper’s preparation months ago and lodged a freedom of information request for it, to no avail.

He received an email from Treasury’s FOI officer Brad Collins at 8am on Tuesday notifying him that the paper had “now been published on the Treasury Research Institute website”, providing a link and suggesting he withdraw his request.

Martin’s annoyance was apparently nothing compared with the treasurer’s mood when late on Monday night the subscriber email providing an advance glimpse of the next day’s Telegraph
front page alerted him to the coming Santa story.

An apparently technicolour phone call to McCormack ensued, the Nationals leader having begun his first stint as acting prime minister only hours earlier.

What Morrison had expected to capture the news media’s collective attention on Tuesday was the research paper, whose release he had authorised along with Home Affairs Minister Peter Dutton and Prime Minister Turnbull.

Those findings were useful to his pre-budget campaign in several ways.

Contrary to the assertions of some in the government, the paper found immigration actually boosted the economy and made money for the country, with the annual permanent intake forecast to add one percentage point to the country’s gross domestic product each year for the next 30 years.

But it also found that immigration was contributing to congestion in the cities and urban planning and infrastructure development had not kept pace with population growth.

Dutton is among those who have advocated a cut in immigration, noting the numbers have already dropped and promising the government will trim them further if “that’s what’s in our country’s best interests”.

Speaking to Radio 2GB in February, Dutton said: “We have to try and encourage people out into regions. We have to reduce the numbers where we believe it’s in our national interest.”

On Tuesday morning, Morrison was set to use the research paper to refine his sales pitch and put the budget’s spending in the context of improving life in the cities while boosting jobs in the country.

The government has already indicated it plans to justify its budget spending by differentiating between what it calls “bad” debt, spent on welfare, and “good” debt, spent on infrastructure.

ABC presenter Sabra Lane quoted the departmental paper’s findings to Morrison: that in the 20 years to 2016, the population across capital cities had grown by 37 per cent on average, mostly due to immigration, but that infrastructure and housing supply had not kept pace.

“I think they are very fair assessments,” he responded. “And that is why in this year’s budget we will continue to be investing strongly in infrastructure. It is why, in last year’s budget, we put the measures in place to address housing affordability, particularly on the issue of housing supply.”

But he also had to deal with the messaging mess McCormack had made, which he did more fully in a corridor news conference afterwards.

“I can tell Australians I am not Santa Claus and there won’t be a Christmas in May, and the Grinch won’t be making an appearance either,” Morrison told journalists, suggesting the Telegraph loved to “play dress-ups”. For his efforts, he ended up on page one again the next day, this time as Bad Santa.

In contrast with McCormack’s image of largesse, Morrison spoke of “restraint”, belt-tightening and a budget that “lives within its means”.

Later that day, McCormack, whose portfolio is transport and infrastructure, took to 2GB to try to help.

“Scott Morrison says it’s not going to be a Santa Claus budget and to that end I know, I agree, but he says it’s going to be an economically sound and fiscally responsible budget and I agree with him in that regard,” McCormack said. “At the end of the day it’s also going to be a good infrastructure budget.”

Eventually he confessed: “Look, I’m excited about the budget.”

Speaking to the Telegraph’s Miranda Devine as part of his own clean-up efforts on Wednesday, Morrison agreed: “Michael’s obviously really pumped about that, and that’s great. I’m pleased he is. That’s his job.”

He emphasised he knew whose money he was spending. “The government takes its responsibilities in how we acquit ourselves on taxpayers’ money very, very seriously and we are ensuring in this budget that we are continuing to live within our means,” Morrison said.

Much of the budget’s big infrastructure spending has already been unveiled, including plans to upgrade the M1 Pacific Motorway in Queensland and the biggest single item, a rail line to Melbourne Airport.

Later on Wednesday, Tony Abbott gave a blunt assessment of the spending priorities. “We are being indulgent with today’s taxpayers’ money and indulgent with tomorrow’s taxpayers’ money when we make commitments that are overgenerous,” he told 2GB.

He said he would not make a running commentary on ministers except to say: “The economic narrative under the Abbott government was very clear.”

Morrison’s message is certainly more nuanced. But there was one other delivered this week with Abbott-like directness and designed to make sure the former prime minister heard it clearly.

One of the four federal vice-presidents of the Liberal Party, former Adelaide MP Trish Worth, also chose Devine’s podcast program to fire a salvo at Abbott and his backers. 

Worth said Liberals in the wider party were dismayed that Abbott and others were sniping “to harm the prime minister, clearly”.

“The reality is that if they want to tear down Malcolm Turnbull, they tear down the government and they tear down all their colleagues in marginal seats who are working jolly hard to ensure that they stay there and give the Australian people the choice again of another strong government.”

Speaking as someone whose own seat had teetered perpetually on a margin of about 1 per cent, Worth urged current Liberal marginal seat holders not to give up.

“On the other hand, my clear message to Tony – and there is nothing personal about this at all – and those few followers he has: just think of their colleagues and think of their country … Tony is not going to get back. It’s just not going to happen. It is overwhelmingly not going to happen.”

Tellingly, she said she had notified party president Nick Greiner of her intention to speak and that the whole federal executive was of like mind. “There has never been a lack of unity in that environment at all.”

Worth suggested anxious marginal seat holders should invite Abbott to a meeting to “politely face the music”.

It seems unlikely the former prime minister and his supporters will give Turnbull, Worth and the federal executive what they want, before the budget or after.

And thanks to the arbitrary deadline of former deputy prime minister Barnaby Joyce for a poll turnaround by Christmas, Turnbull has even more reasons than Morrison for not wanting the festive season to come early.

This article was first published in the print edition of The Saturday Paper on Apr 21, 2018 as "Frosty the ScoMo". Subscribe here.

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