Scott Morrison faces a dilemma
There’s nothing like the prospect of voters about to mark their ballot papers to focus the minds of politicians. And as parliament resumed this week, the spectre of the Eden-Monaro byelection hung over the place, jolting it out of its brief coronavirus togetherness.
Make no mistake: even though the byelection in three weeks’ time will not weaken the government’s numbers on the floor of the house if it loses, there is a strong view that a Liberal win will reinforce Scott Morrison’s druthers to go to a general election early. And you don’t have to look very far to find the reasons why.
Morrison, in his pep talk to the government party room, could only see dark clouds ahead for Australia for at least another five years. The silver lining of a world-leading response to the pandemic was no reason to think the hard part is now in the past. The prime minister warned “there will be more difficult decisions ahead of us. There are more ahead of us than frankly are behind us.” Restoring the economy and rebuilding jobs “is not a short-term program”, he said. “What we do in the next five years … will set up an entire new generation.”
Morrison faces a dilemma. On one hand, he acknowledges he will have to keep spending, “and that’s going to feel uncomfortable at times”. Especially for fiscal hardliners, such as backbencher Jason Falinski, who has called publicly to stop more spending. Morrison urged his troops to stay disciplined and united behind him as he’s taking “the principles that we hold dear and applying them in a whole new way to those unprecedented challenges we now face”.
On the other side of the dilemma is the question of when to start withdrawing the JobKeeper and beefed-up JobSeeker unemployment payments. There does seem to be more appetite for this, both in the party room and on Morrison’s part. Last Friday, Morrison guaranteed both programs would remain in place for their legislated six months. But on Monday there was a spectacular carve-out of JobKeeper.
The government’s subsidy for free childcare will end on July 12 and the 120,000 early educators currently on JobKeeper will be booted off the payment two months earlier than Morrison promised. In consolation, a $708 million transition payment subsidising 25 per cent of educators’ salaries will be given to the sector. But it’s clear some childcare centres will struggle to retain all of their employees – especially as many parents have either lost their jobs or their work hours and so have far less ability to pay the old fees that were in place before the virus struck.
Taking anything off people is extremely dangerous politically. The government certainly appreciates this, and has no intention of tempting fate in Eden-Monaro. All the “nasties” have been timed to kick in a couple of weeks after the July 4 byelection.
Treasury’s review of JobKeeper is due to be handed to the government at the end of this month. The government, however, won’t be releasing the results until an economic statement at the end of July. Finance Minister Mathias Cormann has confirmed “further adjustments” will then be made to the $70 billion wage subsidy program. Morrison told parliament this week that Labor’s suggestion he was holding back for political advantage was “immature” and that the program was still the biggest in Australia’s history.
Morrison has taken the opportunity on several occasions in recent days to “stress again, [JobKeeper] was a temporary lifeline put in place to help Australians through the worst of this crisis”. He says it comes at a very significant cost. Labor believes, and no doubt hopes, that in unwinding these significant costs the government’s political management of the crisis will unravel. There’s little doubt the ideological straitjacket that conservatives impose with their call for a speedy return to “small government” won’t be fit for purpose for quite a while. In fact, it is more likely to alienate millions who will be receiving less support as they struggle to find jobs, begin repaying postponed mortgages and see rents reinstated.
Anthony Albanese certainly took the gloves off with his first question on Wednesday. He asked Morrison if he could confirm that in “the three weeks since parliament last sat, the government admitted it overestimated coverage of the JobKeeper scheme by three million workers, resulting in a $60 billion blunder; the government announced $720 million will be repaid to victims of the prime minister’s illegal robo-debt scheme; and Australia entered its first recession in three decades”.
Morrison returned in kind. He accused Labor of taking joy in the fact Australia is in recession and using it for “political purposes”. He said the opposition was “seeking to even undermine measures that they support”.
However, on Thursday, Morrison finally capitulated to Labor’s pressure to apologise to robo-debt victims. In responding to Bill Shorten, he said he “deeply regretted” any hardship caused and apologised for “any hurt or harm in the way that the government has dealt with that issue”.
But on the bigger question of the economy and the pandemic, there were no concessions. Morrison says Australia has “done incredibly well in dealing with one of the biggest challenges this country has faced”. And no fair-minded person could disagree, but the latest Newspoll suggests the near-record approval levels Morrison has achieved over the past three months have not translated into the same strong support for the Coalition. In fact, the 51-49 per cent two-party preferred vote in the government’s favour is exactly where it was at the election. Polling analyst Andrew Catsaras says Morrison’s performance “hasn’t shifted anyone’s votes”.
The big real-time test begins on Monday with pre-polling opening in Eden-Monaro. The 114,244 voters on the roll will become a bellwether for the broader national sentiment. It’s a role they have played for much of the past 50 years – with the exception of the last election, when they voted for an opposition member. Although at the time the opinion polls predicted Labor would win government.
Peter van Onselen in The Australian makes a compelling case that the government, and Morrison in particular, is “spin over substance”. It markets big, generous promises only to fall short on delivery. He wrote: “Think bushfire recovery fund ($2bn announced, $250m spent), drought fund ($7bn announced, $2bn spent) and of course the mother of all misses, JobKeeper ($130bn announced, $70bn spent).”
In an electorate hit by drought, catastrophic fire and now the pandemic, voters will have their own personal experiences as a yardstick. There may not be much praise for spending less if it has meant people have missed out, as Labor says is the case. Even so, the Liberals are quietly confident they will win Eden-Monaro. One insider says their candidate, Fiona Kotvojs, has the highest profile of the 14 candidates on the ballot. Making her task harder, though, is the fact the Nationals and the Shooters Fishers and Farmers are running candidates – and even if they allocate the Liberal their preferences, there is always about 30 per cent spillage.
When the Nationals unveiled their candidate, Queanbeyan councillor Trevor Hicks, the New South Wales deputy premier and Nationals leader, John Barilaro, made a point of attacking the Liberals. Barilaro, who had a bitter falling-out with his Coalition ministerial colleague Liberal Andrew Constance before they both pulled out of the contest, said the last Liberal member for Eden-Monaro, Peter Hendy, was hopeless. He accused Hendy of not working for the electorate and promised that Hicks would put the people first – a pledge all the major party candidates are making.
According to one seasoned Liberal MP, if the Liberals defy 100 years of electoral history and win a seat from the opposition in a byelection, it will be hard to hold Morrison back. Other prime ministers – Kevin Rudd immediately after he toppled Julia Gillard, Malcolm Turnbull after his coup against Tony Abbott – missed their moment to capitalise on popular support.
A Labor loss would prompt questions about Albanese’s appeal to voters. But one senior Labor figure says the rumblings in the ranks wouldn’t amount to much. Except they could embolden Morrison to try his hand at consolidating another three years before the recession saps voter confidence and fuels anger against the incumbents.
Secretary of the Treasury Steven Kennedy told a senate committee on Tuesday that Australia had appeared to have avoided “a cycle of destruction” that would impact the nation for years. Instead, we have gone from the worst-case scenario to just worse than normal. Unemployment, Kennedy said, was likely to reach 8 per cent in September, rather than the 10 per cent predicted at the beginning of the pandemic. However, underemployment and wages will be slow to recover to even their poor levels pre-virus.
Economist Stephen Koukoulas, echoing Kennedy, says Australia has a long way to go before it’s out of the woods. He says the significant recovery in confidence in the Westpac survey can be put down to “a relief rally”. “Anything can look better than where we were two months ago,” he says.
The question now is how things will look by the time the next general election is due in 2022. No one can be confident, and Scott Morrison knows it.
This article was first published in the print edition of The Saturday Paper on Jun 13, 2020 as "Bonfire of the unity".
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