Populist Morrison reverses policies
Next week federal parliament resumes and the leader of the house, Christopher Pyne, will table the schedule of sittings for 2019, an election year. He is sure to follow the convention of identifying the second Tuesday in May as budget day. But few will take the timetable at face value. The Opposition certainly won’t, and all the portents indicate that their scepticism will be well founded.
Constitutionally, Scott Morrison could keep governing until the end of August next year. The election for the lower house is timed to three years from the date of its first sitting after the election. The senate, however, with fixed terms, has to have an election for half its seats so that a new term can begin from July 1, 2019. The Parliamentary Library calculates that the latest the prime minister can hold the senate election is May 18.
Unless Morrison is gripped by a crippling fear he will be cut down at the poll and hangs on for dear life until the last possible minute by splitting elections for the two houses, May 18 conventionally is seen as the last realistic date for the house of representatives as well. The scenario of a half-senate election with a reps election to follow at a later date would surely be an admission that the game is over, and spell death for the government.
A May 18 election would mean the budget would have to be moved forward as it cannot be delivered if the parliament has been prorogued. Morrison this week signalled his intention to unveil how big his cut to Australia’s migrant intake will be in the budget.
Labor has already had election campaign dry runs and is convinced Morrison will bring the budget forward to late March or early April and then rush to the polls. It expects the mother of all pre-election budgets. The precedent is the last Howard-Costello effort that tried to buy the 2007 election with massive and, as it turned out, unaffordable tax cuts. The global financial crisis could hardly have been factored in. But the assumption that the biggest mining boom in history would continue forever was at best delusional and at worst cynically irresponsible.
Politicians staring down the barrel of defeat inexplicably think the way to avert the harsh judgement of the voters is to abandon the policies and positions that they have argued are best for the nation and do whatever it takes to give the mob what it wants. There are deep philosophical arguments about populism not being bad in a democracy. United States president Ronald Reagan’s first budget director, David Stockman, quit the administration when Reagan threw fiscal rectitude out the window and capitulated to powerful vested interests that wanted tax cuts but not the spending cuts to pay for them. Stockman, rather than being disappointed in Reagan, wrote a book about his experience: The Triumph of Politics: Why the Reagan Revolution Failed. The revolution was supposed to deliver small government and budget surpluses. It delivered the opposite. Stockman concluded that the political realities of the American democracy – giving the people what they wanted – triumphed. It took almost a generation to repair the economic damage.
A parallel in Australia is the triumph of politics over carbon pricing. The looming election may prove a watershed moment. But not before Scott Morrison attempts to repeat a version of Reagan’s American tactic and, closer to home, Tony Abbott’s folly. Consider this: as treasurer, Morrison spent most of the past 12 months arguing against a cut in the migrant intake and for an energy policy called the national energy guarantee. Labor threw down the gauntlet on energy policy on Thursday and refused to be wedged on immigration all week.
The prime minister waxed lyrical identifying population growth with the pain of residents in our major east-coast cities. “They are saying enough, enough, enough,” he said. “The roads are clogged, the buses and trains are full. The schools are taking no more enrolments. I hear what you are saying, I hear you loud and clear.”
Even though the size of our migrant intake is in his bailiwick, Morrison says he’ll be consulting the states on lowering migrant numbers. He made a virtue of the fact that this year the intake is 30,000 below the 190,000 cap for permanent migration. In February he dismissed permanent migration as the biggest contributor to our clogged cities. Back then he said, “What’s been driving up population growth in Australia is more temporary migration.” He pointed to the growth in international students, tourists and temporary workers.
No one is suggesting we should take an axe to them as the fix for our decades-old lack of planning. The cost would be substantial, something then treasurer Morrison pointed out more than once. The almost 700,000 foreign students are worth close to $30 billion a year – one of our biggest “exports”. Last year there were 8.8 million tourists, almost a million-and-a-half of them from China.
A clue to Morrison’s conversion now that he is a prime minister heading towards his date with destiny is the analysis done by Professor Ian McAllister in the Australian Election Study after the 2016 election. He found 80 per cent of One Nation voters were hostile to immigration and wanted the numbers cut. And the stereotype of Pauline Hanson’s followers all being in rural Queensland doesn’t stack up. Half of One Nation’s strength lives in the big cities.
But if the plan is to impress Hanson, the PM has a way to go. She tweeted that cutting immigration numbers alone is not enough. “The Morrison government should also adopt One Nation’s proposed travel ban on extremist countries,” she said.
Bill Shorten isn’t spoiling for a fight on migrant numbers. He says the intake has to be monitored yearly. He is also critical of the 1.6 million people on temporary work visas, but says greater investment in roads, schools and hospitals is needed to address voters’ resentment of urban congestion. Where he is more than willing to engage the government is on energy policy. Here, as far as he is concerned, the alignment of popular policy and good politics coincides. The Fairfax-Ipsos poll on Monday suggests he’s on the right path. Reducing carbon emission is closing the gap on reducing household bills, at 39 per cent to 47 per cent. Essential Research has found 76 per cent support for government subsidising renewables.
Shorten is taking the Liberals’ climate-sceptical, coal-disposed, lower power prices promise head-on. He has a plan: “More Renewable Energy, Cheaper Power.” His offer to make the Turnbull government’s thwarted national energy guarantee (NEG) the cornerstone of that plan highlights the mess the Liberals have got themselves into. Malcolm Turnbull, as overheard by a Fairfax reporter last weekend, told a high-powered dinner in Sydney the Coalition at present was “not capable” of dealing with climate change, despite it being “a profound problem”.
Labor’s spokesman on energy and climate change, Mark Butler, says Morrison and his treasurer, Josh Frydenberg, spent most of this year telling Australian households and businesses the best way to bring energy prices down is via the NEG. They said households would save $550 a year, whereas if the guarantee was dumped, power bills would go up by almost $300. Since the dumping, Butler says electricity prices are climbing on the futures market by as much as 40 per cent in 2019. Bloomberg and other market analysts say renewables are already cheaper than new coal-fired power.
Labor is exploiting the fact the government party room backed the NEG three times before a determined group within the party, whom Turnbull calls “insurgents”, “blew the government up” and with it a policy that experts took 12 months to develop. Aware these same conservatives would attempt to repeat Abbott’s blocking of any attempt to legislate the NEG after the election, Butler and Shorten have a plan B still based on much of the work that went into the Turnbull-Frydenberg plan.
They are promising to spend $5 billion implementing the Australian Energy Market Operator’s integrated system plan. This offers reliability and stability of power while at the same time scaling up and utilising renewable energy. Shorten, seizing on research by The Australia Institute, says this accelerated transition to renewables will create 60,000 jobs in construction and 12,500 jobs in maintenance. Unlike the Liberals after 2020, Labor has given a policy framework to deliver its target of 50 per cent renewables and a 45 per cent cut in emissions by 2030.
And to further blunt a counter-campaign warning that such targets can only lead to job losses and push up prices, Labor is promising to fund one million household battery installations by 2025, cutting more than “60 per cent off their power bills”. A “just transition authority” will be set up to retrain and help re-employ displaced coal industry workers.
This is all designed to bury the ghost of Abbott’s successful 2013 campaign. Turnbull, meanwhile, is taking keen interest, following an Instagram campaign to “vote Tony out” of Warringah. A Liberal branch in Sydney’s Roseville is now calling for Turnbull to be expelled from the party.
Maybe Morrison will try to hang on until October next year.
This article was first published in the print edition of The Saturday Paper on Nov 24, 2018 as "Movin’ right along". Subscribe here.