A scan might have found the cancer now killing Daniel van Roo. Instead his doctor gave him 50 STI tests, which van Roo believes was because he is gay.If I hadn’t taken action and if I hadn’t seen a doctor then, you know, then where I am is just where I am. But because I did do those things, I am probably going to be upset about it when I am laying in the hospital bed at the end.
The budget prepares Scott Morrison
There is no other way to look at it. The electoral cycle has been interrupted. Joe Hockey delivered a year three budget in year two, leaving himself no real room for a credible repeat performance. Of course, the denials came thick and fast. The treasurer assured the post-budget Press Club lunch there was no appetite to risk losing hard-won government by cutting short its first term.
Hockey rightly said winning the trust of voters from opposition is no easy task. His problem is the government lost that trust with its mean miscalculations in his first budget. This year’s effort had one aim: do whatever it takes to buy back the electorate’s affection. But to restore trust you need credibility. The unanswered question is, will voters look past the 180-degree switch from last year’s debt and deficit emergency to this year’s sunny uplands rhetoric.
Labor’s Chris Bowen made a strong case in parliament that this government “stands for nothing”. Certainly it has no coherent message. Last year a raft of nasties were needed because of the ocean of red ink the previous government had apparently left for a drowning nation. This year, with a bigger deficit, twice the size of the one forecast in 2014, there is no emergency, only a bright horizon of new prosperity. Never mind that government debt continues to grow. Based on this budget it will reach $573 billion in 10 years. That’s $80 billion worse than what was being forecast in December.
While all budgets are a best guesstimate, the Liberals in opposition held Labor to account as if they were an exact science. While Hockey insists his assumptions are more conservative than Wayne Swan’s ever were, his record is no more impressive. And largely for the same reasons. But here’s the rub: while collapsing iron ore prices helped contribute to an “unforeseen revenue write-down of $90 billion”, this year’s budget assumes iron ore at $40 a tonne. That’s $20 above the long-term average before the boom. As economist Chris Richardson says, “Putting a number on iron ore prices is a craps shoot.”
Of course Hockey could get as lucky as Peter Costello and see a repeat of the once-in-a-hundred-years commodities boom. The odds are very long on that, especially as China’s demand shows no signs of reaching that peak soon, if ever again. That’s one of the reasons for the Reserve Bank’s outlook being slightly more pessimistic than the sunshine boy treasurer’s forecasts.
Hockey did his ebullient best to talk up the economy in the face of available evidence to the contrary. In the past seven years, he has used the same evidence – slowing growth, higher unemployment, a collapse in confidence – to talk it down. But there are signs he is feeling very insecure in his job. The most dramatic illustration of this was in the traditional Mother’s Day pre-budget interview with the venerable Laurie Oakes. It was a car crash.
The gallery veteran was bemused that the treasurer felt he was not allowed to talk about details of his budget. He said he was leaving the childcare package to the prime minister and the relevant minister, Scott Morrison. Surely it was Hockey’s budget, Oakes prompted. The answer was stunning: “It is Tony Abbott’s budget as well. It’s a career-limiting move to release something on the same day the prime minister is, Laurie.”
Could anyone imagine a Keating, Costello or a Swan being put in the position of saying they could not talk about a key budget measure? As the saying goes, many a true word is spoken in jest. Treasurers have been sacked before. Gough Whitlam made a habit of it, much to the detriment of his government. But Hockey’s embarrassment is compounded by his invisibility in the past couple of weeks and Scott Morrison’s in-your-face presence everywhere.
The humiliation of the treasurer reached a high-water mark the next day, with a report in the media section of The Australian that Morrison had a discussion with Abbott about being given the treasury portfolio if he succeeded in getting his Jobs for Families package through the senate. August was nominated as the handover timetable. For good measure, the report said there had been a power struggle in the Expenditure Review Committee of cabinet between Hockey and Morrison. “Absolute rubbish,” was the swift denial from the social services minister.
The trouble is Morrison compounded the damage when he went on Radio 2GB and compared the treasurer to the disgraced rugby league player Greg Bird. Like the controversial star, currently serving eight weeks off the field for a dangerous illegal tackle, Hockey was going to score the try after Morrison had done all the hard work running the ball. He later said he was confusing his Birds, but Labor wouldn’t let him off the hook. Shadow finance minister Tony Burke accused Morrison of deliberately demeaning the treasurer. Shadow treasurer Chris Bowen said the prime minister had already lost confidence in Hockey.
Then on budget day The Australian ran another story confirming that the sidelining of Hockey was a deliberate strategy worked out by Abbott and Morrison. It revealed Morrison rang Hockey thanking him for staying in the cupboard, as it were.
Murdoch’s flagship national daily seems to be hedging its bets on the longevity of the Abbott–Hockey team. Its page one on Wednesday was hardly a ringing endorsement: “Once were lifters. Now Abbott and Hockey are leaning towards a poll.” The Bill Leak cartoon has the pair joining Bill Shorten for a drink, leaning on the bar. One of its favourite columnists, right-wing spruiker Janet Albrechtsen, was brutally frank: “If the Abbott government’s second budget is a political disaster, the prime minister and the treasurer are finished. But if yesterday’s budget delivers even the faintest poll bounce, Scott Morrison will be the biggest winner in the long term.” The Australian, like a chunk of conservative Liberal MPs, has at last found an alternative candidate to Malcolm Turnbull as a replacement prime minister.
Labor was quick to give in-principle support to both the budget’s user-friendly measures. The families’ package is probably in bigger trouble than the small business largesse. The opposition and the Greens say they will not be blackmailed into voting for cuts in Family Tax Benefits that would leave families worse off. The arithmetic used here is National Centre for Social and Economic Modelling research that so far has not been convincingly answered by the government. NATSEM says the average family would be $6000 a year worse off under the package; the government insists they would be $1500 to the good. The fact that the childcare generosity doesn’t kick in until 2017 may also upset some voters. Their kids could be out of primary school by the time the money is available.
On the whole, the initial response of the Liberal backbench has been positive. Two of February’s more outspoken malcontents, Andrew Laming and Dennis Jensen, have come out in praise of the treasurer and prime minister’s efforts. Some believe Labor has been outplayed. But Bill Shorten is convinced Abbott has vacated the future to the opposition and taken over the mantle of a big-spending, big-taxing government. The budget papers confirm that Hockey’s tax take, as a percentage of GDP, is bigger than levels reached in the Rudd–Gillard years.
In fact, Hockey is relying on bracket creep to help contain his burgeoning deficits. He says he would love to hand back this revenue fillip, where taxpayers go into higher tax scales as their incomes rise. It is an issue that has to be addressed, he concedes. But the finance minister, Mathias Cormann, says the only way you can reduce tax revenue as a share of the economy without adding to the deficit is if spending is reduced. He complains that the senate hasn’t been supporting the government’s efforts in this regard.
Of course, there are other ways to address bracket creep. The main one is called a tax cut. Economist Richard Denniss says this is a perfect opportunity for Labor to step into the breach. It could fund a tax cut and begin paying down the deficit faster by addressing anomalies and concessions in the system. The Liberals are unwilling to touch the superannuation concessions that are in fact growing as a cost to the budget faster than the aged pension. Labor has made a start, but it could go further. The only option for the Libs would be to raise indirect taxes and, for that, read the Goods and Services Tax. But even here the government is bending over backwards to save admitting to any sort of tax rises. It calls them integrity measures in the budget.
Labor is well aware of this option but is keeping its powder dry. Shorten’s vision for the future goes to addressing climate change with greater commitment to more ambitious renewable energy targets and a market mechanism to price carbon pollution. He also believes the government is starving crucial scientific research. Spending in this area, a key productivity driver, is now expected to fall by 30.5 per cent over the forward estimates.
Shorten says Labor is ready for any snap election. That may be bravado, although on the polls so far he would go in the frontrunner. Tony Abbott’s not quite ready to pull the trigger. He’s waiting to see what sort of job Hockey does this year as budget salesman.
This article was first published in the print edition of The Saturday Paper on May 16, 2015 as "The prodigal Morrison".
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