Joe Hockey frequently demonstrates a refreshingly open mind to good policy. Well, if not frequently, then a damn sight more often than most in his party.

Alas, Hockey’s execution often leaves something, or perhaps a lot, to be desired. He almost derailed at the outset his politically successful outflanking of Labor on banking regulation last year by appearing to suggest he favoured regulation of interest rates. In that case, after some quick rowing back, he recovered his footing quickly and went on to make life difficult for Wayne Swan. In the end, alas, Swan was able to get away with a half-arsed package of “reforms” that, as fine as far as they went, leave systemic regulatory problems in place in Australia’s banking sector. Still, it was a demonstration of what could be done with creative policy thinking, good tactics and a bit of help from the banking cartel.

But in January last year, Hockey commendably suggested that manufacturing subsidies be “looked at seriously” for budget savings. Sophie Mirabella, at that stage Opposition industry spokesperson, stuck to the bipartisan commitment to protectionism and rejected Hockey’s thought bubble, describing it as “a very theoretical, purist economic approach”. That was the end of that.

Now Hockey’s had to beat the hastiest of retreats on taxation of trusts, barely lasting 24 hours on the position of taxing them like companies, before having to pull out under heavy fire from the government and the Nationals. The briefest of climbdown statements emerged yesterday after Wednesday’s speech to a tax conference. It was a bad day at the office for Hockey.

For all his maladroitness, Hockey was right. Trusts are as much a very expensive tax rort as they are an appropriate vehicle for small businesses and farmers. In  a response welcoming Hockey’s initial statement, ACOSS suggested $2.5 billion per annum could be obtained just from tightening up on the way high-income earners exploit trusts to minimise income tax.

Hockey knows that perfectly well. He was Financial Services Minister under Peter Costello when John Ralph reviewed business taxation during the Howard government’s second term. Ralph recommended taxing trusts the same as businesses, and Costello agreed. But in a symbol of the direction that government was increasingly to go in its third and fourth terms, John Howard blocked the reforms in the face of an hysterical campaign from the Nationals, the National Farmers’ Federation. This was despite that the reform package that Costello crafted would have ensured nearly every farmer was no worse off.

Hockey didn’t even get a chance to develop a compensation package. The words “trust” “taxation” and “business” were barely out of his mouth before the Nationals started screaming.

The cockies sticking up for a good rural rort, of course, is entirely to be expected. Worse was the sight of Bill Shorten rushing to exploit Hockey’s suggestion, piously declaring that trust funds were “a legitimate tax tool” and accusing Hockey of creating “uncertainty”.

Uncertainty, presumably, for tax dodgers.

Like watching Wayne Swan stand tall for Australia’s banking cartel, there’s something a bit sickening watching a Labor minister stand up and defend trusts, especially when the hunt is on in the budget process for spending cuts. If Labor isn’t prepared to take on a well-known rort when it needs the money and the shadow Treasurer has gone out on a limb for it, then it never will.

And invoking “uncertainty” about any reform proposal legitimises that line whenever it is used against reforms argued by Labor.

Hockey has painfully embarrassed himself with his clumsy footwork. But at least he shows evidence of being interested in good policy. That’s a lot more than you can say about many of his opponents —  within the Coalition and in Labor.