Toxic budget stirs up backbench jitters
Fronting the National Press Club on Wednesday, shadow
treasurer Chris Bowen noted that his backbench colleagues would have
been especially pleased at his eventual arrival.
One of them would have been tapped to deliver his speech for
him if, as had already happened once that day, a second plane had been
denied a landing. The truth is, they’re pretty pleased anyway. The
problem was Canberra’s notoriously stubborn fog.
It's a pretty apt metaphor for the government’s position
right now: stubbornness, and fog. Not that Bowen was complaining. It was
hard to wipe the smile off his face despite the uncertain hours spent
in circular flight.
Shadow treasurer Chris Bowen at the National Press Club. Photo: Chris Bowen
It’ll take more than a few delays or a bit of inclement
weather to dampen the mood of a party that began the week leading by
double figures in two major opinion polls and finds itself suddenly
united around a common theme.
That theme is its opponent’s strategic error, or what one
senior Liberal told Fairfax Media was “the stinking carcass hanging
around the government’s neck called ‘the budget' ". Another Liberal put
it differently, branding Joe Hockey’s first effort as ‘‘about as popular
as a Polly Waffle floating in a public pool’’.
Indeed, Coalition MPs are aghast at the sudden depth of their
political dilemma and are already muttering about radical solutions.
Being discussed is everything from a humiliating retreat on one or all
of the budget’s most odious matters – think petrol excise, Newstart
changes, the pension age rising to 70 and the GP payment – to the
‘‘nuclear’’ option down the track of a leadership shake-up.
An initial period of calm immediately following the budget is
giving way to the realisation that economically it was at best
unimaginative and, politically speaking, it was deeply flawed. And that
in turn is showing up as criticism of Hockey. And of Tony Abbott.
‘‘The trouble with budgets," observed one relatively calm
backbencher, ‘‘is that almost by definition, treasurers have to be
extended a lot of trust by the party room.
‘‘Budgets are so complicated and when everything’s a secret,
then everything’s a front-page story, so consultation even with the
backbench is just not an option, it’s impossible – we just wait around
reading leak after leak, wondering what’s planted and what’s not, and
hoping like hell that when it is delivered, the Treasurer knows what
And right now, as the government struggles to explain its
approach, many MPs are concluding the Treasurer did not fully know what
he was doing.
Even some of Hockey’s cabinet colleagues are joining in, with
one telling Fairfax Media Hockey had forgotten the politics and had
“bought” the Treasury line on some things. And they know it could have
been even worse.
According to insiders on top of the list of Treasury-inspired
decisions – such as the return of fuel indexation, the family tax
benefit tightening and the politically toxic GP co-payment – there could
have been added the reduction or removal of the diesel fuel rebate to
farmers and miners.
‘‘That would have led to warfare, and a rebellion from the
Nats," said one. Another said while Hockey had eventually told the
ethanol producer Manildra it was to lose its roughly $100 million a year
subsidy, his initial position internally was to keep the subsidy – all
while agreeing to hit motorists with a charge that is designed to go “up
and up and up”.
Bowen, who arguably fell victim to the guile of Treasury’s
enveloping logic in his few weeks as Treasurer, when he embraced the
fringe benefits tax changes for privately used business vehicles, learnt
a valuable lesson: remember the politics.
Whether the budget has permanently damaged the government is
too early to tell, especially given the variables. Hockey and Abbott may
yet be saved from themselves by an unco-operative Senate, which knocks
out the most unpopular aspects.
Time, too, will play a role if the economy begins to grow
more strongly as a result of policy changes and/or external factors,
prompting voters to accept the argument that tough remedial action had
been necessary. That is clearly the government’s hope.
But at present at least, it seems the budget has had a
corrosive effect on the Coalition’s public standing and a less obvious
but no less dangerous effect of both Abbott’s and Hockey’s political
authority in the party room.
Insiders say this was as much Abbott’s budget as Hockey’s.
Whereas John Howard rarely, if ever, intervened in Peter Costello’s
budget formulation process, leaving the expenditure review committee to
his trusted treasurer, Abbott attended them all, according to a source.
And he often played the leading role.
This, in the final analysis, may be the heart of the problem.
Where treasurers usually push for cuts and harsh medicine, prime
ministers usually play the counterweight role as politician-in-chief,
vetoing policy purity where the politics would be too hard. Think
Keating/Hawke, Costello/Howard and even Swan/Rudd.
Abbott, on the other hand, appears to have led the charge
toward fiscal battle, in effect egging on his economic ministers to
No wonder Bowen’s smiling.
Mark Kenny is Fairfax Media's chief political correspondent.