Malcolm Turnbull promised to govern from the “sensible centre”. In the new federal budget, he has found it.
After a long succession of right-ward concessions to his party’s conservative wing, Turnbull has crafted a budget that seeks to solve problems rather than serve right-wing ideology.
This is very deliberate: “This is not a budget to tickle the ears of ideologues,” Treasurer Scott Morrison put it to Fairfax Media in an interview last week. Decoded: “This is not the Abbott government.”
Some of the problem-solving in the budget is practical but mostly it’s political. Strikingly, it’s been crafted with popularity foremost, or, at least, political inoffensiveness.
In fact, if Turnbull and Morrison had tossed in a tax cut, this could very well be a budget for an election year.
It is ostentatiously more generous in spending on health, schools and public investment, spending more on road and rail and the Western Sydney airport, for instance. It seeks to placate pensioners as well as first home buyers.
And the only tax increases are painless for the voter, at least for now.
The Tax Office is mailing out the big new tax bills to the big banks, to foreigners or to the future – the increase in the Medicare levy isn’t to take effect for another two years.
Uni students may be unhappy about paying higher fees, but Coalition governments regard them as politically ungettable in any case.
Some of the elite schools are upset that their access to the public purse is to be reduced from super-privileged to normal, but Liberal-voting parents aren’t going to take their votes to Labor or the Greens over this issue – those parties are in agreement with the government.
So there’s more spending on voters, yet, miraculously, no increased tax on voters. The Magic Pudding lives, every politician’s fondest fantasy.
Another critical design feature is an effort to protect against the surging populist-nationalist movement. The budget seeks to build a bulwark against the rampaging right such as One Nation with some populist nationalism of its own.
Hitting foreign home-buyers with bigger charges, hitting firms that hire foreign workers with a bigger levy, and hitting the unemployed with some tough new tests all fall into the populist category. Hitting the big banks with taxes and new executive punishments is also a classic move from the populist playbook.
These may seem draconian, but they are designed to protect the political centre from the irresponsible right.
But it’s not an election year. This is the first year of a three-year term. Conventionally, this is the only real opportunity for a government to make unpopular decisions. By year two, a government already has an eye to the next election.
Pandering to the voters in year one is unconventional. It’s a sign of the times, the times where a prime minister cannot be confident of making it to year two, the times of the revolving-door prime ministership.
It’s a sign of a time when an incoming prime minister explicitly limits his own political viability in the job to a maximum of 30 losing Newspolls in a row. If Turnbull continues his losing streak in the polls, he will hit this mark by the beginning of the new year.
In other words, there is no longer any time in the political cycle for a government to take the difficult, unpopular decisions. Where are the economic reforms?
As the chief economist at Industry Super and former Treasury official Stephen Anthony says: “To say that this budget lacks ambition is an understatement – we need a high-growth, high-productivity growth path, and this gives us mediocrity forever.”
The political parties are not solely responsible for this failure, of course. The Australian public in recent years has shown every sign of an entrenched entitlement mentality. The Senate has faithfully defended this mentality, blocking most efforts by governments to make unpopular change.
The result is a budget that, like the government itself, muddles through. And because it has been designed with popularity and populism uppermost, it will muddle through the centre and muddle through the Senate.
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