The federal budget handed down by Scott Morrison last Tuesday night was clearly an election pitch. Carefully designed to avoid alienating any one bloc of voters, it contained just $2 billion in cuts, a promise to return to surplus early, and a $140 billion package of income tax cuts spread out over seven years and aimed squarely at middle Australia.
Under the government’s plan, all Australians earning between $41,000 and $200,000 will pay just 32.5 per cent tax from July 2024. That would put 94 per cent of workers in the same tax bracket with high-income earners.
Mr Morrison and Prime Minister Malcolm Turnbull hoped to capitalise on tentative signs of a political resurgence this year. Indeed, there was chatter about an early election in the wake of a possible ‘‘budget bounce’’.
That seems highly unlikely now. Results of a Fairfax-Ipsos poll conducted between last Thursday and Saturday will be sorely disappointing for Mr Turnbull and Mr Morrison. Instead of a bump, the Coalition’s two-party vote has dropped 2 points since April (based on 2016 election preferences), and it now trails Labor 46 to 54 per cent.
The poll was conducted after the High Court’s section 44 ruling on Wednesday exposed Opposition Leader Bill Shorten’s “rolled gold guarantee” over Labor’s vetting processes as a fiction by forcing three of his MPs to resign over their citizenship.
Yet despite this embarrassing spectacle voters chose not to punish Mr Shorten. Instead, Labor’s share of the critical primary vote – the measure watched most closely by the political class – lifted by 3 points to 37 per cent.
The poll is not all bad news for the Coalition, however. On the question of whether voters think they’ll be better off as a consequence of the budget, 38 per cent responded yes, which is the highest rating since 2006. On the issue of perceived fairness voters gave the budget a respectable net rating of +6.
These numbers suggest Mr Turnbull and Mr Morrison should be able to sell their ambitious tax policy. Yet there is no escaping the fact that a budget designed to cause no major offence has won the Coalition no political capital.
Of course, budget bounces are a rare political phenomenon. But perhaps tellingly, 57 per cent of respondents said they would have preferred the government use the extra revenue that has poured into Treasury since the last midyear economic review to pay off government debt instead of delivering tax cuts. Among Coalition voters that figure was 68 per cent.
There is also voter scepticism about whether the latter stages of the tax plan will ever come to fruition. In a survey of 13,500 Fairfax readers conducted in the wake of the budget, there was a lack of confidence in the ability of the Coalition to deliver the promised 2024-25 flattening of tax brackets, with one-quarter of respondents expressing that it was “impossible to forecast” or “will not happen”.
The first real test of the reaction to the budget, and Mr Shorten’s reply, will come at the five byelections likely to be held next month, all bar one brought about by the citizenship debacle that engulfed the ALP and the Centre Alliance last week.
The Coalition has already confirmed it won’t contest the seats of Perth and Fremantle. Today’s polling will make it very nervous about the somewhat higher hopes it has in the other three. A full federal poll, due at the latest a year from now, suddenly seems a long way off.
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