No one's buying Tony Abbott's budget offer

The unhappy path to the budget began last August-September, when the then opposition leader began to lay out the guidelines for a Coalition government. He followed a tried and true formula.

That is, make yourself a small target by avoiding controversy. Match the government of the day wherever you can. If something like a tax increase or a cut in spending looks like creating controversy, then rule it out in the election campaign.

John Howard did it in 1996. Kevin Rudd did it in 2007. Tony Abbott did it in 2013. It is usually quite unnecessary.

All three of these opposition leaders were going to win anyway. Rudd’s contribution in the last election campaign lingers on. Not only did he rescue some Labor seats but he made the Coalition nervous enough about winning to make unwise election promises. These promises of no new taxes and no cuts to spending in certain areas were made to be broken.

Both major parties need to get out of this rut they are in. It is not good for democracy because it does one of two things. It either inhibits good governing or it breaks faith with the electorate.

Election campaigns are not just a method of choosing a government that can be dismissed later as mere process by the hard-heads in government. They are once-in-three-year rituals that are devalued when the winning party reneges on a promise.


The second unhappy background to the budget was the Commission of Audit.

Such audits have also become common, but they should be dispensed with in future. Good governments lean inwards towards the centre, while hand-picked audit teams lean toward the extremes. They are supposed to debunk the outgoing government but instead they create dangers for the new one.

They create dangers because the government is forever tagged with some of the wilder ideas that surface.

The first fib this government told was that the audit report was not a government report but a report to the government. In fact the audit team was a hand-picked mix of business leaders, former Coalition ministers and former public servants known to be onside.

The composition of the audit team set the scene for later criticisms that the government’s approach was one-eyed and lop-sided rather than a budget for all Australians.

Governments don’t set up inquiries without knowing the result. This applies to audits, which are invariably ideological. In future incoming governments should rely on advice from the public service.

The third unhappy lead-up was the Prime Minister’s commitment to a lavish paid parental leave scheme.

Just before the budget it was rejigged downwards from a $150,000 income limit to a $100,000 limit. Even then it sent the wrong message to the community at large. It appeared, at least symbolically, to contradict the claim by the Coalition that spending had to be carefully measured because, in the Treasurer’s immortal words, “the age of entitlement” was over.

The budget itself has been poorly received, as subsequent public opinion polls make clear. The standing of the government has taken a huge hit and it now trails Labor 56-44. The Prime Minister personally now trails the Opposition Leader by a substantial margin.

The budget has numerous failings.

It contains several broken promises. These include the new tax on high-income earners, the cuts in grants to the states for health and education, the increases in the fuel levy and the $7 per visit Medicare co-payment.

It disproportionately targets low-income earners and people in vulnerable situations, including the young unemployed, pensioners and single mothers with children.

It also has a confused storyline of its own making.

Some but not all of its broken promises were made as part of an attempt at debt reduction. This is at least a consistent line of argument, though it may not be convincing. The Medicare co-payment proceeds are, however, to be paid largely into a new medical research fund.

Furthermore, the state leaders allege that the effective longer-term cuts to their budgets were done without consultation. State governments have their own agendas and have long been known as grizzlers, but it looks particularly unconvincing when your own party’s state leaders are nearly unanimous in condemning the budget.

Finally the budget lacks effective and trusted salesmen and/or women. The three main blokes involved are Abbott, Joe Hockey and Mathias Cormann.

Abbott has made some bad errors of judgment in selling this budget. His first error relates to the 12-month freeze of politicians’ salaries. Better to do nothing than to make such a paltry offering.

Only a 2 per cent cut or a three-year freeze would have sent a convincing message about sharing the burden. His second error, in relation to that freeze, was to say he wanted to be able to look pensioners in the eye and say the pain was being shared.

Hockey has created for himself a new stern, business-like persona following his big weight loss. Unfortunately for him, selling this budget would have been more convincing if he could have reverted to the former, warmer Joe.

His sidekick Cormann, the Minister for Finance, is not much help. He’s in the Senate, not the Lower House, because he knows he’s not a people person. It is hard for such a cold fish to appear compassionate.

This is not the beginning of the end of the Abbott government by a long shot.

But it has given Bill Shorten a much-needed free-kick and he grasped his opportunity pretty well. There is a rule in sport and politics. Never give your opponent a break when they are down. Abbott may have done so.

John Warhurst is an emeritus professor of political science at the Australian National University.