"The government has now burnt a lot of its political capital for little gain in "fixing" the budget." Photo: Alex Ellinghausen
Treasurer Joe Hockey made a meal of his first budget and is making an even bigger meal of settling and selling it.
He was clearly "best on field" in the run up to the budget but has been near to the worst since, with some now wanting his contract reviewed. They certainly don't see him as "foreman material".
Hockey (and Prime Minister Tony Abbott) seemed genuinely surprised that the budget was criticised and rejected so widely. Yet Hockey waited some 10 weeks before attempting to woo the essential crossbench senators and was AWOL in the media much of that time, except for the serious distraction created by the release of his ill-conceived biography, Hockey: Not Your Average Joe. This only served to further undermine the budget's integrity and to raise questions about his judgment.
This week, he again made himself the issue with his remarks that "the poorest people either don't have cars or actually don't drive very far in many cases", in some bizarre attempt to defend his fuel excise decision. Another dumb error of judgment, especially given the obvious inequity of his budget, whereby the disposable income of lower-income earners was cut by some 12 per cent to 15 per cent, while the income of those at the top was cut by less than 1 per cent.
Don't get me wrong, it is unnervingly easy to make dumb statements in politics. Often attempts to make points with the best of intentions fail to strike the desired chord – indeed, they can easily offend.
One of my classics was to suggest that "you can always tell the rented house on the street", made towards the end of a very long speech to the Housing Industry Association in 1992. The line, originally written by my then press secretary, Tony Abbott, was moved in and out of the speech by various advisers before being finally reinstated and was only noticed by one journalist at the time. But that was enough. The media bushfire was ignited. I was very soon flat out back-pedalling.
In my experience, the best response to such acts of stupidity is to immediately and openly admit the mistake and set about rectifying it. To try to defend the indefensible breaches the first "law of digging holes" – namely, once you reach the bottom, you should stop digging.
Even though Hockey can find statistics to "prove" that the rich pay more fuel excise than the poor, it's still making the hole deeper. To those on low incomes, any additional impost, or benefit cut, eats into their capacity to survive. They don’t have the luxury of "choice" as to how to respond.
Behind all this, the Abbott government has shifted its position on how to deal with the budget's weaknesses and criticism. Initially, as expounded by Abbott himself, they were simply going to "tough it out", with even a hint of a potential double dissolution. Emerging in the aftermath of its successful handling of the MH17 tragedy, the view of the government shifted, sending messages far and wide that it "would deal" and was capable of doing so. Obviously this was an attempt to defuse criticism, to get "a" rather than "the" budget through the Parliament and to reassert some control of the political agenda.
For example, Health Minister Peter Dutton initiated discussions with the Australian Medical Association, seemingly entertaining some possible limiting of the GP co-payment. Similarly, Education Minister Christopher Pyne seemed willing to contemplate a deal that would reverse some of the proposed changes to HECS, in order to preserve the proposed "deregulation of universities".
Selling these health and education decisions were a "big ask" from the very start, as they were announced without an overarching health and education policy framework. They appeared as simply mechanisms to improve the budget bottom line, not as essential elements of a broader policy in each area.
Much of the inequity of the budget could have been avoided with a full, integrated policy in key areas.
For example, focusing on pensions, just proposing to tighten income and asset tests, and to lift the retirement age, is an obvious, inequitable response.
However, if the government also proposed to significantly increase the pension benefit that, on some measures, is below the poverty line, and to reduce the near obscene skewing of superannuation concessions in favour of the wealthy, it would have been seen to have produced a more comprehensive and equitable overall response to the budgetary consequences of our ageing population. However, this hasn't happened and Hockey's misguided comments have only worked to distract and further compound the difficulties of the budget-selling task.
The government has now burnt a lot of its political capital for little gain in "fixing" the budget, especially recognising the massive expenditure commitments still to be addressed.
If growth and budget revenue turn out to be weaker than forecast, how will the government be able to go back again for another round of cuts and initiatives?
I recall my time in the Fraser government, when treasurer Phil Lynch was pilloried for his initial "razor gang" expenditure cuts, only to see the Fraser cabinet still having to struggle, in every other year of the government, to "fix" the budget.
Hockey still has it all to do.
Businessman John Hewson was federal leader of the Liberal Party of Australia from 1990 to 1994.