The advertising campaign for Malcolm Turnbull’s personal policy passion, his innovation and science agenda, hove into public view last week. Many thousands of dollars of taxpayers’ money have already been spent on the TV ads, which revolve around the slogan “Welcome to the Ideas Boom”.
What struck me when watching the ads for the first time was their unintended irony. If there is an ideas boom going on, why does the government that commissioned the ads not seem to be part of it?
This Liberal-National federal government was elected on September 7, 2013, almost 2½ years ago. Malcolm Turnbull assumed the office of prime minister five months ago, on September 15.
In a political system with three-year electoral terms, five months is a big chunk of time. No government, no prime minister – regardless of how much he or she might find the job suitable for their considerable talents – has a moment to waste.
When Turnbull presented himself as Tony Abbott’s replacement he delivered a pungent and succinct critique of Abbott’s national leadership. The nation faced challenges that required a more developed discussion, he said:
"We need a style of leadership that explains those challenges … and sets out the course of action we believe we should take and makes a case for it. We need advocacy, not slogans."
So what policies are being advocated by the Prime Minister?
For most of his time as leader, Turnbull has trialled the idea of changing the mix of taxes, with a key element being a rise in the goods and services tax from 10 per cent to 15 per cent, possibly with an expansion of the GST’s remit to cover hitherto excluded items. Everything, he told the nation, was on the table.
That was until last week, which Turnbull began by outlining why he could not see how a GST rise would substantially boost productivity and the economy generally. So the GST rise, mooted and mulled over in a fug of possibilities without any specific proposals, was taken off the table.
Replacing it was an assurance from Turnbull that when the budget is delivered on May 10 – three months away and a few months shy of eight months since he became Prime Minister and Scott Morrison took over as Treasurer – Australians will finally be told what the government’s tax policy is.
To bolster Turnbull’s line that this retreat on the GST rise was based purely on a rigorous economic test, his office released Treasury modelling that found the policy change would yield only a negligible rise in GDP. This was all presented as new information delivered to the government in late January, decisive in its impact.
Private opinion polling and negative feedback from electors to government MPs did not determine the outcome, apparently. Certainly the ALP had polling showing that the government would have faced a monumental challenge in selling a GST rise to the public. Labor and the Liberals use different pollsters, but as a rule their polling produces very similar results.
The takeout from various qualitative polls is that a large proportion of voters on lower and middle incomes are reflexively sceptical about their economic return from a higher or broader GST, even allowing for compensation through income tax relief and higher pension payments.
That scepticism is based in part on the experience of the past 15 years, in which the GST was promoted as a growth tax, a cure-all to the problem of the states’ ongoing financial problems. But by 2007, state hospital systems were struggling due to funding shortfalls, so much so that the then-health minister, Tony Abbott, attempted a Commonwealth takeover of a hospital in Tasmania.
The scepticism is also built on the experience of watching the tax-income churn that accelerated first with the introduction of the GST and then with the series of income tax cuts the Howard government delivered as the mining boom took hold. That churn hasn’t left voters feeling any more secure.
Even if we accept that the government wasn’t affected by public opinion, what are we to make of the assertions that the Treasury modelling was revelatory or that it should be the final word? The GST was introduced on July 1, 2000, giving successive governments and several generations of econocrats the opportunity to observe the economic impact of a broad-based consumption tax paired with wide-scale compensation.
Was it really only on January 25, after the idea had been batted back and forth like a Totem Tennis ball for so many months, that its likely impact was known?
In any event, all modelling is limited by its assumptions. With a wider set of policy assumptions, it’s at least intellectually possible that a higher and wider GST might be deemed economically effective.
As for the Labor Party, even when it scores a win, it’s bound to lose. Its campaign against a GST rise was surely, by any fair measure, a success. It’s unremarkable for the government to dismiss Labor’s arguments as nothing but a “scare campaign” but more puzzling to see the mainstream media invariably use the same term. Labor’s position against a broad-based consumption tax has been consistent since Paul Keating’s proposal for one was quashed at the 1985 tax summit.
It says something about the condition of contemporary political and policy debate, and the state of the mainstream media as it tries to operate in the disruptive digital environment, that if a party argues for a position it has held for 31 years it can be persistently derided with the pejorative term “scare campaign”.
To say this is not to carry water for the ALP or its leader, Bill Shorten. But the Labor Party’s tax plan is well advanced and has been released progressively since last year – a relatively brave thing for an opposition to do, given the risk-averse nature of modern politics. It’s simply wrong to portray its tax stance as predicated on nothing but a scare campaign.
What all of the above demonstrates is how much more difficult it is becoming to create, debate and execute policy in contemporary Australia, something that Turnbull specifically dedicated himself to overcoming. The electoral cycle runs fast. Positions need to be taken and advocated. That is what politics is about.
Turnbull might want to present himself as an incrementalist and a prime minister who operates from the “sensible centre”, but eventually the voting public will demand to know exactly what he intends to do. That will require him to stand in one place and nail himself to some policies. Ultimately, conviction does count.
Turnbull came to the prime ministership a known supporter of same-sex marriage, critical of Tony Abbott’s plebiscite. He now supports the plebiscite. He also is one of the few Liberals to have voted for an emissions trading scheme in the Parliament. He now supports Abbott’s Direct Action policy.
He was once the most passionate and committed republican in the country. Now that he is in a position to lead that argument, he wants nothing to do with it.
And in his sixth month as Prime Minister, his economic plan for the nation – with China wobbling, international markets shuddering and our economy transitioning away from the resources boom – is unknown.
So far, what we have seen from Turnbull is incumbency rather than leadership.