Joe Hockey, the wily old fortune-seller
This week Treasurer Joe Hockey pulled out his crystal ball to give the nation a foretaste of where it will be in 40 years’ time. The fact of the matter is, like the rest of us he has as much idea about that as who will lead the government into next year’s election.
The Intergenerational Report (IGR) was the brainchild of Peter Costello when he was treasurer back in 2002. Even then, no one thought it was any more than an exercise to bolster the government’s economic agenda. The problem for this government and treasurer is its agenda is unravelling before our very eyes. The story it wants to tell us changes by the week, if not the day and the hour. And that is entirely the legacy of a badly bungled first budget. It undermined the credibility of the fledgling Coalition government and put the prime minister’s leadership on life support. Nobody could have predicted such a rapid decline in fortunes. Even John Howard, Tony Abbott’s mentor and hero, is flummoxed by it, as he told a business audience recently.
Hockey, of course, hasn’t helped. Two weeks ago he was telling us the IGR would “knock voters off their chair”. Projections of declining productivity, ballooning deficits and the burden of an ageing population would be more than enough to persuade us he needed to be a fiscal fiend now to save generations yet unborn from a return to Dickensian darkness. Then as his prime minister began to get really serious about knocking barnacles off his ship of state that discourse became embarrassing as well as redundant. Savings were now to become spendings. So on the eve of the latest IGR exercise we were told: “We’re not using this to shock people. What we’re trying to do is be positive.”
You know the enterprise is somewhat suss when economist Judith Sloan in The Australian describes it as no more than a political exercise based on dodgy assumptions. Naturally her biggest criticism was for the IGR rolled out by Labor’s Wayne Swan, but she wasn’t all that impressed by Costello’s later effort either. In this she is joined by economist Richard Denniss from the left-wing Australia Institute think tank. He pulls no punches. The whole thing is an intellectual and political fraud. “Why on earth would anyone think they have any idea what our economy will look like in 40 or 100 years? The only credible prediction is there will be an economy.”
And there is absolutely no doubt the shape of that economy will be determined by factors beyond the control of any government, such as catastrophic climate change.
Also, you can bet your bottom dollar on the political imperatives of the day being just as relevant as they are now, whatever form they take. Imperatives that see a weakened prime minister ditch the very prescriptions he had been telling us were “absolutely” necessary or “right and proper” for our return to fiscal health. That was Abbott’s mantra on the Medicare co-payment, repeated 53 times over a year.
The whole episode throws into stark relief the reason this prime minister is still on trial for his political life. His half-hearted attempt in December to ditch the original $7 co-payment only made matters worse. He replaced it with a $5 version and a $20 cut for doctors’ rebates. That model was designed by his chief of staff, Peta Credlin, as payback to the doctors for their campaign against the first measure. It went down in flames in the face of fierce resistance from Queensland Liberals in the early weeks of their state election. The political disaster can be traced back to budget razor-gang considerations. A leaked report from the Expenditure Review Committee had the original “GP tax” imposed on then health minister Peter Dutton by Credlin, dubbed “co-prime minister” by ministers and MPs.
The sensitivity around this high-handedness flared again in cabinet as it discussed the final retreat. Fairfax Media was told Abbott delivered a thinly veiled rebuke of Dutton as he summed up the discussion. He said, “This issue has been mishandled, it has been mishandled until now.” That story was filed online and picked up by Labor in question time. The PM did not deny making the statement but amber lights must have been flashing in his brain. He took blame for the whole shemozzle. “As a former health minister I should have known better than to attempt health reform without the strong co-operation and support of the medical profession.” A source close to the prime minister categorically denied Dutton was the target of the cabinet remarks. In the present climate the last thing Abbott needs is another minister leaving his camp, if Dutton has not already done so after his treatment on the issue.
New Health Minister Sussan Ley was praised in cabinet for settling the medical profession down, but that could be wishful thinking. She has left on the table the freeze on doctors’ rebates that would have their incomes shrink by $2 billion. But she makes no secret of her intent. She is against bulk-billing for everyone. If doctors want to make up any shortfall they are free to charge patients accordingly. Labor says it’s a “GP tax by stealth”.
Here the Abbott government parts ways with Howard’s. Andrew Laming, one of the MPs who led the charge for a spill, reminded his leader that as health minister Abbott “reinvigorated Medicare with bulk-billing incentives and chronic disease management”. Demanding Australians pay more for their medical care risks antagonising voters further. The “free doctor’s visit” claim owes more to blinkered ideology than to the facts. Taxpayers pay through the Medicare levy. More than that, according to health policy specialist Dr John Dwyer, “last year Australians spent $29 billion on out-of-pocket medical expenses – the highest in the OECD”.
Abbott continues to take out his own political health insurance. This week he made an eight-flag announcement that he intended to send 300 troops to Iraq as trainers to help the Iraqi army combat the “Daesh death cult”. Never mind that the United States has spent $25 billion doing the same thing, only to see those troops “melt like snow in summer” ahead of the terrorists’ assault, to quote Abbott himself. The next day he reversed his refusal last year to support a real pay rise for the military – something he said would never happen.
The change of tack, especially the khaki hue to the ramping up of security threats, appears to be paying dividends, although the evidence is mixed. The Fairfax Ipsos poll had a six-point turnaround for a 51 to 49 per cent two-party result. It’s an improvement, but still the opposition’s way. The Essential poll found no change, with Labor leading 53 to 47 per cent. The prime minister has no illusions he is on borrowed time, telling the ABC he has to satisfy his party room on a day-by-day, week-by-week, month-by-month basis.
Like his hapless predecessor Julia Gillard, Abbott now survives or perishes on a poll-by-poll basis. But he may be luckier than his Labor counterpart. There seems to be no one in the Liberals capable or willing to organise a challenge. Malcolm Turnbull was asked on national television whether he had the ticker for it, and while he responded that his ticker was in good shape, he went on to praise Abbott as a strong leader supported by everybody in the party, including Turnbull himself. There is a view, peddled by those on the right, that the longer Turnbull prevaricates the less chance he has of seizing the prize. It won’t be handed to him on a platter, they say, and in the meantime both Julie Bishop and Scott Morrison are coming increasingly into contention.
Morrison needs more time to refurbish his image from the ruthless border patroller to a more user-friendly alternative leader. He made a good start with his recent Press Club appearance. His record stopping the boats has impressed the party room – even those uneasy with his methods. According to colleagues, the ambitious minister believes Abbott should be given six months to show he has changed. It’s a timetable that would suit Morrison’s own program for metamorphosis.
It is no surprise the most impatient to see Abbott go are Queensland Liberals. Many are still in deep shock over the defeat of the Newman government. One says the defeated premier was a mini-me Tony Abbott, but they fear that even the more amiable Mike Baird in New South Wales is vulnerable to the toxicity coming out of Canberra. Their fears may not be far-fetched. The ABC’s expert election analyst Antony Green believes the NSW state election is much closer than the opinion polls are suggesting. His reasoning makes chilling reading for the Libs.
Labor’s Sydney-based MP Anthony Albanese, says: “There’s no doubt if Mike Baird loses on the Saturday, Tony Abbott would be gone on the Monday.”
The government’s crystal balls are looking increasingly cloudy.
This article was first published in the print edition of The Saturday Paper on Mar 7, 2015 as "The wily old fortune-seller". Subscribe here.