Paul Bongiorno
Abbott through the looking-glass

A snigger went around the room at the post-Coalition parties’ meeting briefing for the media. The trigger for the mirth was the assembled journalists being told, “The prime minister said 2014 had been a very good year for the government and he’s confident next year would be at least as good if not better.”

Coalition MPs may share Tony Abbott’s view that results have been delivered but many are fuming at the government’s political woes and lay the blame squarely at the door of the PM and his senior ministers. Some worry that they are as delusional as Humpty Dumpty in the Lewis Carroll story. You’ll remember the nursery rhyme hero told Alice, “When I use a word, it means just what I choose it to mean – neither more nor less.”

It’s completely understandable, indeed de rigueur, for federal colleagues of a defeated state government of the same stripe to minimise and even deny any connection or implications. But one despairing Liberal has no such illusions. “Tony Abbott’s face was everywhere on Labor posters at polling booths last Saturday,” he says. He fears the rot is setting in. If you believe Newspoll it certainly has over the past 12 months. The Liberals and Nationals trailed consistently to be eight points behind in the latest survey published the day the party room was told everything is going swimmingly.

There are signs the backbench is getting fed up. The Coalition’s economics committee stymied a move to fast-track the proposed $20 billion medical research fund. The Australian got wind of a very tetchy meeting between the high-powered committee and the finance minister, Mathias Cormann. But the paper was given only half the story. What angered chairman Tony Smith and his colleagues was the minister insisting the fund was not and never had been linked to the $7 Medicare
co-payment. Nor would Cormann explain what the strategy was behind the rush to split the two and take the fund into the parliament. Or perhaps he couldn’t.

The minister was sent packing with a clear message the committee would not rubber-stamp ideas out of the blue without a better explanation and time to examine them. The common view was the government was having more than enough trouble explaining and winning support for what was already out there. Adding to the confusion for the MPs, the next day the treasurer insisted the link between the fund and the Medicare co-payment was still government policy.

On Channel Seven’s election night panel, Victoria’s former Liberal premier Jeff Kennett infuriated his friends in Canberra by describing their performance as a shambles. The mandarins in the federal public service agree to a point. One is privately of the view that while the Abbott office insists on central command and control, it “is nowhere near as dysfunctional as Kevin Rudd’s”. Although evidence is mounting.

The appointment of a former Keating and Howard adviser on foreign affairs and ambassador to Washington, Michael Thawley, to head the Department of Prime Minister and Cabinet, is supposed to give the government more structure and form, especially in the economic area. This has some scratching their heads and reading it as a vote of no confidence in Treasurer Joe Hockey. Thawley’s task is to co-ordinate the budgetary implications across all departments of what Labor is blocking and what it promises. The idea is to turn around and blame Labor for a catalogue of the government’s own budgetary failings.

At the beginning of the week Abbott tried to press the reset button. He finally fessed up to what he had been denying with diminishing credibility since the May budget. Yes, he was doing exactly what he pledged hand on heart he would never do. He’s broken promises. “I accept that what we are doing with the ABC is at odds with what I said immediately prior to the election, but things have moved on, circumstances are different.” He makes the same perfectly reasonable point his predecessor, Julia Gillard, often pleaded without any mercy from him: “I think sensible governments are not only entitled but, indeed, expected to change when the circumstances change.”

Education Minister Christopher Pyne didn’t make the same plea when he broke one of the biggest pre-election promises of no funding cuts or changes to arrangements for universities. Pyne admitted on radio in January or February of this year that he had only begun talking of his radical reforms to deregulate universities and allow them to charge fees as high as they liked. For a government that promised to be one “of no surprises”, this, along with the 20 per cent cut in funding, was a massive shock.

In a desperate bid to finish the parliamentary year with a big win, Pyne negotiated away nearly $3.5 billion of budget savings to cajole crossbench senators. He failed. And despite the fact the best he can hope for in the senate when he tries again next year is five votes, he needs six to pass the bill. With a touch of Alice in Wonderland he bravely predicts he will win next time: “Because there is an inevitability about necessary reform. Necessary reform happens and this will happen.”

He likened himself to Winston Churchill in his dogged determination. Labor’s Bill Shorten retaliated in kind: “We shall fight them in the parliament, we shall fight them in the community. We shall fight for a fair university system and we shall never surrender.” It only takes three on the crossbench to tie the senate vote and resolve the question in the negative. The two remaining Palmer senators will be joined by their former colleague Jacqui Lambie come hell or high water on this issue.

Labor is convinced the threat of $100,000 university degrees, as foreshadowed by the University of Western Australia, is feeding into the anxiety voters have about the ability of their kids to get ahead and afford tertiary education. A growing number of social and economic commentators are pointing to an enduring and ingrained pessimism sapping confidence despite government claims to the contrary. The Liberals’ own pollster, Mark Textor, says, “Economic anxiety is number one, two and three on the issue agenda.”

The national accounts midweek were yet another reality check. Gross domestic product, the measure of economic activity, rose just 0.3 per cent in the September quarter for an annual rate of 2.7 per cent, well short of expectations and well beneath the rate needed to cut unemployment. Economist Stephen Koukoulas said, “With the terms of trade [what we are paid for our exports, especially commodities] in freefall and the global economy muddling along, it is just about impossible to see a scenario where GDP will approach 3.5 per cent, let alone 4 per cent, any time soon.” He said it was very likely we will see the unemployment rate hit 6.75 per cent. It is clear Joe Hockey’s midyear review in a couple of weeks will not be a pretty sight. Like his much-maligned predecessor, Labor’s Wayne Swan, the treasurer will be revising down his budget revenue forecasts. Even his “conservative” projections on iron ore and coal prices will look every bit as “overblown”.

Koukoulas, a former Gillard government adviser, says Treasury may even start telling the treasurer there is much more to life than achieving a budget surplus. The budget, he says, “is the policy lever that can be used to manage the business cycle rather than the budget being the objective when tax hikes and spending cuts are considered”. That would be some reboot for a treasurer and prime minister who have spent almost every waking minute in recent years demonising Labor’s deficits and warning against passing debt down to our children’s children – no matter the nation’s triple-A credit rating, which means our debt is affordable and could be used to stimulate the economy further. That’s a reality Hockey is coming to realise, but it will mean, as the Deloitte Access Economics Budget Monitor is forecasting, “deficits as far as the eyes can see”. That’s something Abbott finds very hard to swallow, even if he is beginning to use weasel words to get around it: “Our heart is with a country that can look at its kids and grandkids in the eye and say, ‘We are not leaving you with unsustainable debt; we are not going to practise intergenerational theft to sustain our own spending.’ ”

At the end of each parliamentary year, the former Labor government consoled itself that things could only get better. They got worse. The internal dynamics are different with this administration but the externals are just as dire. After the prime minister’s claim that he “had fundamentally kept faith with voters”, Essential Research put it to the test. It found only 31 per cent agreed. Of these, only 8 per cent strongly agreed. A 56 per cent majority disagreed, and, of these, 34 per cent strongly disagreed. A trust deficit as big as this will make it very hard to claw back support in 2015.

If this distrust is entrenched by the election year in 2016, the Victorian result of the demise of a one-term government could well be emulated. So far the party room hasn’t thought of employing the solution of another of Lewis Carroll’s characters, the Queen of Hearts. She was famous for one oft-repeated command: “Off with his head.”

This article was first published in the print edition of The Saturday Paper on Dec 6, 2014 as "Abbott through the looking-glass".

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Paul Bongiorno is a columnist for The Saturday Paper and a 30-year veteran of the Canberra Press Gallery.