Comment

Chris Wallace
Budget reality checks bounce

The Albanese government spent the past week coming to grips with theory versus reality in government. The vast gap between the budget handed down by Treasurer Jim Chalmers and the media’s reporting of it is still being processed by government MPs.

Labor’s first budget was a restrained affair: fiscally responsible while fulfilling some specific election promises, and squarely directed at fixing the mess left by the Morrison government. What could possibly go wrong?

Two things. First, the dominant media channels remain effectively in the Coalition’s hands. There’s a reason revolutionaries, upon entering a capital, seize radio and television stations as their first move. If the sclerotic, corrupt incumbents are able to keep gaslighting the populace through them, real change proves difficult.

Compared with recent Coalition budgets, Labor’s was revolutionary in its lack of voter sugar hits and special-interest largesse. Labor hoped, and had not unreasonable expectations, that its economic management chops would be recognised, if not loudly lauded by commentators. While it is true that most specialist economic writers did this, informed critiques were overwhelmed by media invective so jaundiced it could have been written by the Coalition itself.

“Jim’s power deficit” jibed The Australian. “Dim Jim” mocked the Herald Sun. “Jim’s blackout” dissed The Daily Telegraph. “Inflation shock rocks budget” wailed The Australian Financial Review.

Chalmers has been around the block often enough as a staffer, then opposition frontbencher, to be disappointed but not surprised. A little chagrin is justified, though. Liberal treasurers sprayed money up against the wall, racked up massive government debt, barfed vast handouts to corporations that didn’t need them, yet got sustained media applause. A Labor treasurer in a responsible Labor government carefully does the right thing and what does it get them? A thorough pummelling.

Which points to the second thing that went wrong, on which the government has since been playing catch-up: its own tactical error over the eye-popping 55 per cent power price hike over two years forecast in the budget papers.

Ironically, the government’s overall media strategy was sound. Several good news stories were successfully placed in the run-up to budget day. In the immediate aftermath, electorate-specific stories were narrowcast through MPs armed with talking points for their communities. Yet somehow the likely reaction to this key figure wasn’t anticipated.

Deep in the maw of the budget, dealing with the infinite krill of tiny fiscal details that make up this massive document, it’s easy to see it was possible to overlook how one crucial aspect would play out. And it was overlooked. Combined with the main media channels’ continued backing for the Coalition, this opened the way for the Coalition to seize the political initiative. 

Opposition Leader Peter Dutton, a challenging sight on television, made a good fist of his post-budget radio engagements. Dutton’s voice was pleasant, his language clear, and his “reasonable man” performance was plausible if you’d been isolated on the International Space Station without media access for several years. 

Dutton targeted Labor’s claim, made while in opposition, that power bills would be $275 a year lower for voters under an Albanese government. He cast it as a broken promise, failing to mention the promise was $275 a year lower by 2025.

Albanese stuck to the claim but few voters are likely to register the “by 2025” qualifier. Why Labor created such a specific hostage to fortune is unfathomable. This is all tedious, bloody annoying and uncomfortable for the government.

In retrospect, the crab in the budget – the forecast energy price hike – should have been announced beforehand so the budget’s positive elements weren’t swamped. It should have been accompanied by a solution devised and announced before the budget, too. 

It’s complex, says Labor – but so is the political impact of losing the good vibes from an entire budget’s worth of positive announcements at a stroke. 

Things got worse for the government from there. Opposition allegations that Prime Minister Anthony Albanese bullied Coalition MP Michelle Landry in parliament fuelled a toxic wave of news stories that did no credit to the media outlets running them.

The picture of Landry leading a pack of Coalition women through a parliamentary courtyard, flanked by ethically challenged Nationals frontbencher Bridget McKenzie and the deputy leader of the Liberals, Sussan Ley, boosted the story’s purchase. 

Clever politics, if low-rent, many would say – the kind that has plunged the political cultures of Australia, Britain and the United States into such dire straits.

The verdict of Australia’s top expert in misogynist political bullying? “A political performance stunt of faux outrage, reeking of hypocrisy,” said Julia Banks, who left the Liberals because of bullying by Scott Morrison. “More a reminder of their usual group behaviour of being complicit to the patriarchy.”

Yet the Landry gambit got extensive coverage. With some honourable exceptions, the media’s centrality – as currently constituted and operating – to the decay of our public discourse was never better showcased. 

The Coalition certainly did what many oppositions aspire to but few achieve against a new, popular government: it all but wiped out public discussion of the budget.

Then it got worse again. The government was assailed by a massive attack on its industrial relations package by employer groups and media outlets determined to keep the bargaining power of labour atomised and wages suppressed. 

At stake is whether multi-employer bargaining will be allowed again, as it was for most of our history until the Howard government’s notorious deregulation of the Australian labour market.

Assertions that it can’t be restored without a wage breakout and lots of strikes ignores the Hawke and Keating governments’ record, where multi-employer bargaining posed no barrier to industrial peace and sound wages policy.

The zenith of the industrial relations package assault was mild-mannered Business Council of Australia president Tim Reed’s unsustainable claim on the ABC’s 7.30 program on Tuesday that the relative shares of profits and wages in Australia had been “pretty consistent” for 30 years.

Anyone who can read a graph knows the profit share started rising relative to the wages share two decades ago, and sharply accelerated over the past several years.

When independent ACT Senator David Pocock joined the business chorus, saying he wanted more time to consider the bill, with the result its passage could be delayed to next year, there was palpable despair among some supporters in Canberra. 

What was the point of Pocock replacing Liberal right-winger Zed Seselja if he was going to contribute to delays in righting one of the deepest public policy wrongs of this generation: the Coalition’s systematic re-engineering of policy and systems to redistribute money from the rest of us to the rich?

Incredibly, it got even worse than that. The Reserve Bank raised interest rates for the seventh time this year, and commentators forecast another rise beyond that before inflation peaks near 8 per cent by next year. It’s going to be a shaky Christmas for Australians with rising rent, mortgages, credit card and power bills.

Is the government despairing? No, it’s not. 

If you inherit hell, getting to fix it early in the electoral cycle with better days ahead is preferable to the reverse situation. There’s plenty of ballast in cabinet, and confidence is high about producing quality policy that deals fundamentally with the challenges.

The unforced error on the handling of the forecast energy price hike was a costly lesson that will not need to be learnt twice. And this week’s polls show only a little paint got knocked off Labor in what has been an extraordinarily tough 10 days.

Strong, sustainable energy market reforms right now are crucial. Western Australian-style gas reservations, plus energy price caps, are overdue and won’t compromise the government’s “no new taxes” promise.

Equally crucial is getting the IR package through parliament intact, to get wage-fixing moving in a fairer direction again. If you pay people a bit more, perhaps labour shortages might ameliorate, and output might improve, lessening that part of inflationary pressure arising from supply-chain problems.

There’s still a lot of goodwill and support among voters for the government and Albanese. Demonstrable results on energy policy right away, and reasonable prospects for wages growth soon, will be needed for this to be sustained.

This article was first published in the print edition of The Saturday Paper on November 5, 2022 as "Budget reality checks bounce".

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