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Toxic budget stirs up backbench jitters

Date

Mark Kenny

Liberal MPs are aghast at the sudden depth of their political dilemma and Abbott and Hockey are in their firing line.

Shadow treasurer Chris Bowen at the National Press Club.

Shadow treasurer Chris Bowen at the National Press Club. Photo: Chris Bowen

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.

As the government struggles to explain its approach, many MPs are concluding the Treasurer did not fully know what he was doing. 

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.

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 he’s doing.’’

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 tougher action.

No wonder Bowen’s smiling.

Mark Kenny is Fairfax Media's chief political correspondent.

356 comments so far

  • Abbott, Hockey and co deserve every negative article and opinion poll they get. What goes around, comes around.
    Fairness has gone out the backdoor with this mob; and it wasn't escorted out gently, it was booted out in no uncertain terms.

    Commenter
    meatatarian
    Date and time
    May 23, 2014, 1:13AM
    • Abbott was involved in the formulation of the budget and drove the harsh cuts? That stands to reason... the bloke simply lacks judgement.

      However, it's time to lay off Abbott we don't want him rolled by his party room, which seems more likely every day... We need the pleasure of voting him out at the next election... hopefully at a coming double dissolution (but he won't have the guts).

      Commenter
      n720ute
      Location
      North Coast NSW
      Date and time
      May 23, 2014, 7:09AM
    • This was confirmed with the news that the bottom 20% of earners will contribute more than the top 20% to balancing the budget in terms of additional costs in this budget. Hardly fair.

      Commenter
      Good Logic
      Date and time
      May 23, 2014, 7:11AM
    • The partisans from both sides do nobody any favours. Abbott's budget was duplicitous and the sweeping changes to higher education, if passed, will rip the heart out of any notion of an egalitarian country.
      That said, Labor present a danger to the fiscal health of the country.
      They will spend and continue spending. While debt levels aren't at an emergency level now when you are on the way to a high speed car crash that car was travelling at 60km/h at some point. It doesn't mean you are driving safely.
      This country is between the devil and the deep blue sea as far as sensible political representation goes.

      Commenter
      Olaf
      Date and time
      May 23, 2014, 7:26AM
    • The thing is, this budget has already been bad for the economy, as consumer confidence has dropped off completely.

      He can't claim he's doing this to strengthen the economy. All of a sudden, everyone has stopped spending. How can you spend when you know there won't be a pension and your children's education costs will double. They have to put it all away. And there's nothing worse for an economy.

      That's the thing, he's sending all of us to the poor house. It's irresponsible.

      Commenter
      sarajane
      Location
      melbourne
      Date and time
      May 23, 2014, 7:33AM
    • @meatatarian:
      The whole problem for the government is that budget unfairness is now the albatross around their collective neck. How Abbott and Hockey thought they could get away with waving a powder puff measure like the temporary deficit levy over the wealthy as a cover for slugging the rest of us with cuts to welfare, health and education is developing into one of the greatest political clangers of all time.

      Commenter
      JohnC
      Location
      Gosford NSW
      Date and time
      May 23, 2014, 7:33AM
    • Fairness, Meat what is fair about 80% of Personal tax going to Welfare. Or put it this way, 47% of Govt. Revenue. In the last decade we have spent our mining boom on welfare, not infrastructure, schools, hospitals, but welfare. You scream unfair when a Govt. wants to pare it back a little.

      Commenter
      Kingstondude
      Location
      Melbourne
      Date and time
      May 23, 2014, 7:35AM
    • exactly meat. It is only right that fairfax start to make up for their support of the abbott government at the last election when any educated person could see what was going to happen as plain as the nose on their face. however personally I am holding back on my subscription until the editor takes out a full page piece apologising, I think that would be the right thing to expect considering the damage this government will do to australia, some things will never be the same which is deplorable

      Commenter
      harry
      Location
      melbourne
      Date and time
      May 23, 2014, 7:41AM
    • From this point it ain't rocket science for the Government. Drop the PPL and with those savings revise or abolish some of the existing harsh measures. The PPL is sufficient to cover those areas Labor is currently talking about blocking.

      Commenter
      Flanders
      Date and time
      May 23, 2014, 7:42AM
    • It goes to show what an abundance of arrogance and hubris brings. The funny part is, they still cannot see their own vile qualities, nor understand why their ideology is repugnant to the majority of Australians. This is the worst Government and Prime Minister EVER!

      Commenter
      JJ
      Date and time
      May 23, 2014, 7:55AM

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