As the treasurer lauds supply-side economics, a once-controversial recovery theory is gaining traction.This is the essence of modern monetary theory – that government budgeting is nothing like household or business budgeting, for the simple reason that government can create money.
Parliamentary attacks reveal politics out of touch
Malcolm Turnbull ramped up the voltage last week, and this week his ministers have kept zapping the target. The government believes an all-out attack on the character of Bill Shorten is a guaranteed way to retain power, if not win the minds and hearts of voters. Worked like a treat for Hillary Clinton against Donald Trump didn’t it, but they press on.
It’s a sign of desperation to be sure. It is risky as well. The old adage applies: anyone who throws mud loses ground. The Essential poll this week suggests that is precisely what is happening, with both Turnbull and Shorten’s approvals diving. Political attacks often thrill partisans but appear puerile to innocent bystanders. They reinforce the impression that the politicians are more interested in themselves than voters’ concerns.
On Tuesday, Trade Minister Steve Ciobo hit his stride, asserting that the real concern Australians have is about the character of the alternative prime minister. Opinion polls suggest the Labor leader has never really grabbed the imagination of voters. They don’t tell us why. He consistently trails as preferred prime minister and in the popularity stakes.
Not letting facts get in the way of a good sledge, the minister described Shorten as “counterfeit Bill”. He cited fake deals “when Clean Event workers were sold out and dudded for the benefit of union bosses”. He said Australians know fake Medicare messages when they see them – contradicting his prime minister, who is still complaining they fooled voters. And he accused Shorten of selling out coalminers by doing deals with the Greens for a “crazy renewable industry policy”.
But he was outdone by the leader of the house, Christopher Pyne. Pyne went to inordinate lengths to give flesh to Turnbull’s claims that Shorten was a “social-climbing sycophant” and a hypocrite who was without peer putting his knees under the tables of billionaires. Pyne claimed Shorten travelled with the family of the late cardboard box billionaire Richard Pratt on a holiday to Cuba, Argentina and Easter Island. And while national secretary of the Australian Workers’ Union signed an agreement with Pratt’s company “which removed maternity leave rights and turned them into unpaid maternity leave”.
Shorten, in fact, retained maternity leave for the workers in 2002 when a new enterprise bargain was struck. But there’s more to come. Evidence before the Heydon unions royal commission is a treasure trove. Never mind that no adverse findings were made against Shorten. Even the hand-picked commissioner, Dyson Heydon, eventually saw through some witnesses using the commission as a chance for payback for internecine battles in the AWU and other unions.
Government insiders protest that Shorten is not above reproach. They say he precipitated the descent into political cage fighting with his constant reference to the prime minister as “Mr Harbourside Mansion” – perhaps forgetting that line is from one of their own, Peta Credlin. Former Labor treasurer Wayne Swan says Turnbull’s description of Shorten as a parasite is beyond the pale. In parliament, he said the prime minister likes to talk about parasites. “Well, there are parasites in this country,” he said. “They are the ones that deliberately evade their responsibilities for taxation.” Not missing his target, who has assets in overseas-managed funds, Swan continued that these parasites are the “ones who have their money cooling in the shade of the palms on the Cayman Islands”.
When tackled on his Cayman Islands arrangements, Turnbull told parliament two years ago that his earnings from these funds are taxed in Australia. Labor research shows voters aren’t easily persuaded. Fuelling their suspicions is the fact that the Australian tax commissioner has described the islands as “a tax haven”.
This gives potent political context to the way Treasurer Scott Morrison’s cunning plan to shame Labor and the non-government senators to pass his Omnibus Savings and Child Care Reform Bill blew up. On Monday, Morrison fronted the Blue Room for a news conference where he tied the passing of the bill with funding for the National Disability Insurance Scheme.
The bill itself was a potpourri of deeply unpopular measures that caused Tony Abbott and Joe Hockey so much grief after their 2014 budget. The idea was to try to sneak the bill through the senate by throwing in a few positives. Labor and the Greens remained unconvinced, but to encourage the three Nick Xenophon Team senators across the line the treasurer made the NDIS link. He says “as an incentive”. His political opponents saw it as a ham-fisted threat. The mild-mannered Xenophon saw it as being as “subtle as a sledgehammer”.
His analysis: “Pitting battling Australians against Australians needing disability support services is dumb policy and even dumber politics.” Morrison got the message. But his response opened up new battlefronts and exposed the government’s “jobs and growth” plan as a huge political liability. Claiming that Labor had not properly funded the NDIS, he said he would have to look at tax rises or spending cuts elsewhere. Maybe both.
Labor had a simpler idea with lethal impact. Shorten, at the first parliamentary opportunity, asked the prime minister if he would “withdraw his $50 billion tax cut for big business instead of threatening to increase the taxes for every Australian?” Turnbull accused Shorten of being a hypocrite for arguing the benefits of company tax cuts when he was in government, only now to be opposed to them. And for good measure, returned to the theme: “You never know what [Shorten] stands for.”
Knowing what the government stands for is definitely proving problematic. The finance minister, Mathias Cormann, says the government’s druthers is not to raise taxes but it may have to. Especially as the treasurer is now admitting the international rating agencies won’t take too kindly to have him including in his budget bottom line the so-called “zombie measures” from the 2014 budget that are constantly being rejected by the senate.
Here, Labor is in fact cutting the government some slack. It is holding open the idea of continuing Joe Hockey’s 2 per cent deficit levy on incomes above $180,000. Morrison is ruling that out. It would also support trimming the negative gearing and capital gains tax concessions that cost the bottom line billions. That also looks to be off the table. The social services minister, Christian Porter, says he’s under instructions to find other savings in his portfolio. It’s hard to see how that will win support, as the targets are the same families, pensioners and unemployed.
Shorten derides government policy as “Malcolm Turnbull’s crumbs from the table”. The resonance is with the Biblical image of “crumbs from the rich man’s table”. Shorten says the trickle-down theory gives corporate Australia $50 billion and hopes that everything else will be okay. “That is the wrong policy at the wrong time,” says Shorten. Shadow social services minister Jenny Macklin has widened the attack to Pauline Hanson. Her three votes are firmly in the omnibus. “If Pauline Hanson and One Nation support these cuts to disadvantaged Australians, we’ll know once and for all that One Nation is in lock step to hurt ordinary Australians.”
Targeting Hanson is a sure sign that Labor, as much as the Coalition parties, knows she and One Nation are a disruptive force. Just how disruptive is on stark display in the West Australian state election campaign.
The embattled Liberal government of Colin Barnett, in alliance with three National Party ministers, has dumped its allies for a preference deal with One Nation in the state upper house. In return, Hanson’s candidates – or most of them – are expected to preference the Liberals in the lower house. The deal was sealed with the participation of Mathias Cormann.
Its benefits to the West Australian conservatives are moot. One Nation is only running in 35 of the 59 lower house seats. Hanson has no candidates in eight of the seats likely to fall on current trends. Polling in WA has massive swings against the government – about 14 per cent, and reaching 20 per cent in some seats. If Barnett manages to hang on, the deal could see One Nation with the balance of power in the upper house and very disgruntled Nationals in the lower house who will demand a high price to go back into alliance. This prospect was hinted at by former Nationals deputy premier of WA Hendy Cowan.
In Canberra, Labor compared Turnbull’s refusal to buy into the argument very unfavourably with John Howard’s intervention 20 years ago. Howard may have been a reluctant starter but he rightly pinged Hanson for fomenting racial intolerance. She still does, with religious bigotry thrown in.
No one was more discomforted than the Nationals’ leader and deputy prime minister, Barnaby Joyce. He expressed his disappointment and warned the deal could lead to a Labor state government in WA. But he joined the federal Liberals in ridiculing Labor and equating the preferencing of One Nation with Labor’s preferencing of the Greens. The equivalence is tenuous and ignores the fact the government gratefully received the Greens’ legislation-saving votes on senate reform, the backpacker tax and tax transparency. Accepting votes from those in parliament is one thing, helping them get there is another.
But Joyce was reduced to incoherent ranting when he was asked what he thought of his WA state counterparts retaliating by preferencing the Greens ahead of some Liberals.
The message of the rant was that Shorten’s leadership “was done and dusted” and that either Tanya Plibersek or Anthony Albanese were coming after him.
Hard to know if that’s his nightmare or the inevitable outcome if the government’s relentless targeting of Shorten works.
This article was first published in the print edition of The Saturday Paper on Feb 18, 2017 as "Stuck in the mud".
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