Turnbull’s aspirational targets
It was John Howard’s favourite word and now Malcolm Turnbull has latched on to it like a drowning man lunging for a life raft. “We’re not mystified by [aspiration],” he said this week. “We recognise it, we embrace it.”
Had the prime minister stuck with that little reference to the Howard aspirational, he would have been fine. But he couldn’t help himself. He led on from there, down the path of personal insults and red-faced vitriol, a sure sign of the pressure he and the government are under.
The most shocking example was Turnbull’s distorting of the admission by the deputy Labor leader, Tanya Plibersek, that she was “mystified” by the term “aspiration” because she thought everyone aspires to earn more and get on. Turnbull mocked her for coming from the “scrabble streets of Rosebery, with a household income of just under a million dollars”. An angry Labor adviser asked what the outrage would have been like if Plibersek went after Lucy Turnbull’s income.
Though the talk is of an election early next year, the political temperature in the parliament this week was at the pitch usually associated with an imminent poll. Of course, there is one in five weeks’ time: the Super Saturday of five byelections. If you believe the government, it is not confident of winning any of them. But it sure is going out of its way to cause as much damage as it can for Bill Shorten and the Labor Party. It is desperately looking for a springboard to recovery that has eluded it for the past two years.
The sheer frustration of creating a new losing record in the Newspoll at the beginning of the week is too great to conceal. The 34 consecutive losses, two-party preferred, is a worse result than the previous record posted by the Gillard Labor government. So if all else fails, make a grab for voters’ hip pockets and the prospect of the “biggest tax cuts” in our history. Along the way, remind them that the leader of the Opposition is “slimy, insinuating and patronising”.
Shorten needled Turnbull in question time, interjecting that the prime minister was “a snob” when he said a 60-year-old aged-care worker in Burnie could aspire to a better job. Turnbull lost his cool and drew indignant howls from the Opposition when he said he’d seen a lot of wealthy people in his days but he’s never seen anyone more sycophantic in the presence of a billionaire than the Opposition leader. “This groveller, this man who abandoned workers while he tucked his knees under Pratt’s table.”
The scene was set for what was described as a high-stakes game of chicken over competing tax plans. The government insisted its three-stage seven-year plan was an all-or-nothing proposition. The $10-a-week tax rebate for 10 million low- and middle-income workers was held hostage to stages two and three. These latter stages are not due to apply until 2022 and 2024, and go to high-income earners. Stage one applies from July this year, but because it is a rebate will not be paid to taxpayers until their tax returns a year later.
The mercurial Pauline Hanson and her one remaining sidekick, Peter Georgiou of Western Australia, went with the government and ditched their doubts over the wisdom of promising tax cuts costing $25 billion a year when fully implemented two elections away. In an extraordinarily inept performance, the two remaining Xenophon senators, Stirling Griff and Rex Patrick, now trading as Centre Alliance, signalled they would vote down stage three, but if the government refused to accept this amended bill, they would capitulate and vote for the whole package.
Just what voters make of all this sound and fury is open to conjecture. The government is staking everything on its framing of the issue. Labor, it says, is prepared to deny low- and middle-income earners immediate tax relief and to undertake class warfare on any Australian who aspires to earn more than $90,000 a year. Except this is transparently false. And it’s a line of attack that has left some of the Coalition’s own backbenchers unimpressed. Labor is promising almost twice as much tax relief to the targeted 10 million workers and has produced tables to show it is promising everyone earning up to $125,000 bigger tax cuts in the next four years.
As one Liberal lamented, no matter what happens, voters won’t have received any tax cuts in their pockets at the time of the next election. But according to the prime minister’s inner sanctum, Labor will do the Liberals a huge favour by promising to raise people’s taxes. It will, but not for the majority of workers – “only millionaires”, who Labor says it can’t afford to help for now, and onto whom it will reapply the deficit reduction levy. Shadow treasurer Chris Bowen points to the precarious state of the looming budget surplus and a gross debt of half a trillion dollars. On Labor’s calculation, 70 per cent of Australian workers would be better off under its plan. Not hard to figure when 60 per cent of the workforce earns less than the median wage of $55,000.
Shorten had his own version of aspiration at the news conference where he and Bowen announced how “brave” they would be in opposing stages two and three of the government’s package. He said his commitment to those earning more than $125,000 was that he “would make sure that when your kids are sick you can afford to see a doctor. We’ll make sure that when, regardless of what postcode you live in, you’ll have a properly funded school, whether or not it is a Catholic parish school or a government school.” And he said Labor would have a better plan to pay down our national debt.
Labor is convinced it is better positioned to take on the government over tax cuts than the Beazley Opposition was back in 2005. When then shadow treasurer Wayne Swan announced they were opposing the much smaller Howard–Costello tax cuts, Labor had no policy of its own in position. And now, unlike at the previous election, the Opposition has not fallen into the trap of promising something much bigger and better on the never-never. It is the government doing that this time.
While there is an expectation the midyear economic review in December will show an early return to surplus, thanks to the rise in commodity prices, the experience of the past 10 years shows the good times don’t last forever. Especially when United States President Donald Trump is doubling down on his trade war with China. The implications for Australia may not be pretty.
All of which makes it more problematic to explain how a future government, in seven years’ time, will be able to afford the $144 billion tax cut package Treasurer Scott Morrison has on offer, with no details on how it can be funded. The choices are clear enough: cut services, go deeper into debt or raise taxes somewhere else. A future Liberal treasurer may even have to look at closing multibillion-dollar tax loopholes and concessions. Imagine that.
Labor is promising to repeal stages two and three of the tax cuts should it win office. This is not without political risk, but the political pain may not be anywhere near as bad as some speculate. For one thing, Labor won’t be taking back a tax cut that has arrived in people’s pockets. And, unlike the Keating L-A-W tax cuts in 1993, it is not Labor breaking its own promise. The added lesson here, of course, is that those legislated tax cuts could not survive two years, let alone the seven Turnbull and Morrison are talking about.
The political tug of war over competing tax packages may end up being a walk in the park compared with the brawl inside the government over its national energy guarantee (NEG). Seven MPs raised their concerns in the party room during a debate that lasted 25 minutes and was only cut off by the resumption of parliament. One of them, Craig Kelly, took his arguments on to Sky News, as is his wont, and canvassed the prospect of crossing the floor. The idea was not ruled out by former prime minister Tony Abbott, either. He had two goes on Radio 2GB this week, likening the NEG to a carbon tax.
Abbott told his shock jock mate Ray Hadley that if you lose two years of Newspoll it tells you that you have to do something different. He said he wasn’t canvassing changing the leader, “but by God, you do need to change the policy … let’s get more coal-fired power into the system”. And “let’s scale back immigration”.
The energy minister, Josh Frydenberg, contradicted Abbott’s assertion that our Paris emission targets were “an aspiration” – that word again – and not a commitment. Frydenberg is looking to get the states, Labor and Liberal, on board to the guarantee, but to do so he will have to be more amenable to renewable energy and less accommodating to his internal coal lobby. That view is now widely shared in the party room, if for no other reason than there is no real appetite to destroy Turnbull’s leadership again over the issue.
There is a greater aspiration at play here: hanging together to fight the next election.
This article was first published in the print edition of The Saturday Paper on Jun 23, 2018 as "Aspiring squad lines up its targets". Subscribe here.