Faith and tax cuts as 46th parliament begins
In politics, so the wisdom goes, “perception is reality”. And this week, with the opening of the 46th parliament, the perception and the reality of the federal election hit home, particularly for the vanquished Labor Party. But for the victors, not everything is as it seems.
There’s something completely apposite about the opening of the parliament being heralded by an Aboriginal smoking ceremony. The entrance to the people’s house was enveloped in pungent smoke. Traditionally it is a cleansing ceremony designed to ward off bad spirits. That’s what Ngunnawal elder Aunty Tina Brown meant when she instructed Scott Morrison and Anthony Albanese to “let the smoke roll over you and let it come through you and embrace it within you”. Here, though, it could just as well be a metaphor for the tricks and devices used to mask what is really going on in political contests. The next three years will be a test of the ceremony’s effectiveness. Few are expecting a reversal of 118 years of practice since Federation.
Many in Labor are still struggling to come to terms with their unexpected loss. One senior figure says “we misread the polling”. He said: “We were ahead for so much of the time but it was more likely our 46 per cent to the Libs’ 43 per cent.” The reset, he believes, was due to the protest vote bolstered by Clive Palmer’s multimillion-dollar ad campaign, which swung solidly against the party. Even the 51-49 result in the late published polls was a missed warning sign. The contest was statistically lineball and “we didn’t want to admit [it] to ourselves”.
Maybe, but in the last two weeks of the campaign Labor was picking up the same feedback as the Liberals. Erik Jensen reports in the latest Quarterly Essay, The Prosperity Gospel, that longtime Liberal guru Senator Arthur Sinodinos thought two weeks out: “The momentum has been with us at different times, especially in Queensland. Central Queensland, even the outer suburbs of Brisbane. It’s a narrow pathway to victory … But it ain’t over until it’s over.”
Labor research, according to a senior source, found Bill Shorten was “on the nose” with voters in the Sunshine State. The “tax agenda” and the Adani coalmine ambivalence wasn’t helping. That’s when Labor pivoted hard to climate change, hoping to pick up in Sydney and Melbourne what it looked like it was not getting north of the Tweed.
There are lessons to be learnt but no one wins the next election fighting the previous one. The hard-nosed assessment of a senior Liberal is that no one knows this better than Scott Morrison. Though the prime minister is under heavy pressure from his own Christian-right supporters to produce a religious discrimination act, he is disappointing them with his delaying tactics. One church source says some, including the Catholic and Anglican archbishops of Sydney, fear the ruthlessly pragmatic Morrison will fail to deliver what they want.
There were two interesting guests in the public gallery for the formal opening of parliament: former prime ministers Tony Abbott and John Howard, both heroes of the religious right. What worries some is that Morrison is more in Howard’s mould than the more ideological Abbott. He is certainly as tricky as Howard, if the overwhelming evidence of Niki Savva’s inside story of the Turnbull coup, Plots and Prayers, is any guide.
Morrison will need to do a lot of work to persuade middle Australia that when he talks about wanting to govern from the centre he means it. In Savva’s book, a disappointed Peter Dutton contrasted himself with the Morrison record. He said, “I am no further right than Howard and Costello. I am not the evangelical here, not out-and-proud on abortion. I voted for gay marriage, and I wasn’t going to bring Tony Abbott back. But you are framed with these things.”
While Labor, particularly its Western Sydney MPs and candidates, is convinced the party’s social liberalism cost them among the religiously conservative in the big ethnic communities, the Liberals aren’t so sure. During the campaign, Morrison steered clear of issues such as same-sex marriage and religious freedom. To this day he declines to speak out strongly in favour of rugby star Israel Folau after his sacking for religiously motivated homophobic comments.
In the government party room on Tuesday, Morrison cautioned his MPs and senators to avoid more controversy on religious freedom. It is advice he didn’t heed himself in the run-up to the same-sex marriage postal vote, while Malcolm Turnbull was PM.
Now Morrison wants to work “carefully” and consult Labor, church leaders and others. He broached the issue in his one-on-one meeting with Albanese on Wednesday. The tete-a-tete was characterised as being the prime minister looking for areas of collaboration on contentious issues. According to the official briefing after the party room meeting, the prime minister wants to work through the religious freedom issue “in a manner to achieve enhanced unity, not for political purposes”. The purpose of destroying Turnbull is no longer relevant. Far more important is winning the trust of more mainstream Australian voters to consolidate and improve the Coalition’s hold on government next time.
Morrison’s project – to win the next election more convincingly than the last one – will depend in no small measure on just how good he and his treasurer are as money managers. The Reserve Bank is measuring that in terms of the unemployment rate, inflation and household disposable income – or higher wages. The old maxim about Bill Clinton – “It’s the economy, stupid” – played to Morrison and Josh Frydenberg’s advantage seven weeks ago but, two interest rate cuts later, their claims to fiscal superiority are looking wobbly. And it’s getting only harder for a third-term government to blame its Labor predecessors.
But the government for now is bolstered by the momentum of its “miracle” win. Unlike Turnbull, Morrison has emerged from a very close result with much more political capital. Think of it this way: none of the published polls and few, if any, of the pundits expected the Liberals to survive in power. Labor went into the election campaign with its research showing it was likely to gain up to 20 seats. It won only one of them and lost a few others along the way. So the Coalition’s one-seat majority feels like a 20-seat landslide.
This has sapped the confidence and self-belief of many Labor MPs. Not surprisingly, Labor has been left with a string of ultra-marginal seats. It has eight MPs with a 2 per cent margin or less, compared with the government’s three. It helps explain why, in caucus on Monday, Labor MPs spoke out strongly in favour of waving through the government’s $158 billion tax package. The 10-year three-stage plan means changes in stages two and three would not kick in for five years from 2022-23 and 2024-25 respectively.
Albanese and his Treasury spokesman, Jim Chalmers, argued to amend the package, bringing forward its second-stage tax cuts and postponing a vote on the third stage. As the Reserve Bank governor spelled out after Tuesday’s 25-basis-point cash rate cut, to a historic low of 1 per cent, the government needs to pull more of its weight. Philip Lowe warned “we should not rely on monetary policy alone. We will achieve better outcomes for society as a whole if the various arms of public policy are all pointing in the same direction.”
Surely this is a compelling argument for the government to do more than it outlined at the election to rescue the economy. Instead, Morrison, Frydenberg and every government speaker in the tax-cut debate prosecuted it as if it were being held before the election. Wilfully or otherwise, they missed that Labor had indeed moved on. It was not defending its defeated policies but arguing it makes more economic sense to bring forward the Liberals’ own promised tax cuts and infrastructure spending.
Albanese told the house the government’s bill should be titled “some tax relief so some workers keep a bit of their money”. He said “not every worker is going to get a tax cut this term in this proposal; far from it”. He and Chalmers made the perfectly reasonable point that the Reserve Bank governor was calling for significant stimulus now – not in three years’ time, as proposed in the government’s timetable for workers earning between $90,000 and $120,000 in stage two, or in five years’ time for those earning up to $200,000.
If Labor had more political momentum, there’s no doubt it would have been prepared to stare down the government for holding the economy and some taxpayers to ransom for stage three, which is five years away and unfunded. But aware of its vulnerability, the opposition was not prepared to vote against the unamended bill. Equally, the Liberals were hell-bent on not doing anything to concede Labor might have a few clues on the economy, especially so soon after the election. The two Centre Alliance senators and Jacqui Lambie also conceded the government’s upper hand, delivering Morrison a very big win. However, the below-trend economic growth and stagnant wages may indeed eventually mean it’s a pyrrhic victory.
More than smoke and mirrors may be needed to persuade voters.
This article was first published in the print edition of The Saturday Paper on Jul 6, 2019 as "Reality cheques". Subscribe here.