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Aug 15, 2014

Woe is Joe: or, how the budget narrative was lost

Joe Hockey's woes this week reflect how the government's budget narrative barely survived budget night.

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Let’s go back to a happier time for Joe Hockey, to just before the May budget, when he was explaining the government’s proposal for a return to fuel excise indexation.

In a News.com.au article and another one by Laurie Oakes, the excise decision — which the government knew it would cop plenty of stick for — was explained in terms of the need to get a vast infrastructure program rolling; a program that would be, Oakes said, the “cornerstone of the budget”. Hockey and Co even harboured hopes — about which Oakes was rather sceptical — that the indexation would prove popular with voters. Hockey, pictured with sleeves rolled up, all busyness and bustle, declared that getting infrastructure investment moving would create “tens of thousands of new jobs, but most importantly it is going to address the significant drop-off in investment in construction in Australia, associated with mining investment coming off.”

It wasn’t the most coherent argument — the government was trying to claim the budget was a “growth budget” at the same time as it was proclaiming the need to slash and burn to get Labor’s budget emergency under control. But the argument looks positively masterful compared to the staggering ineptitude from Hockey over the last fortnight, and particularly his “poor people don’t drive” comments this week.

Since May, the infrastructure focus of the budget has been hopelessly lost. That’s partly because Anthony Albanese sabotaged it before Warren Truss could start pushing it: Albo assiduously and constantly declared to any journalist who would listen that virtually every item on the Coalition’s infrastructure project list was a Labor project, and regularly made the same point in question time, to the fury of Bronwyn Bishop. It’s partly because Hockey’s pet project — and like fuel excise indexation, an excellent idea — of asset recycling to get state government infrastructure investment flowing has been halted in the Senate and turned into an argument about privatisation, which voters viscerally hate.

“Hockey carefully laid out a minefield and then walked into it. After the cigar picture, the ill-timed holiday and lament that everyone hated him, no wonder colleagues are wondering about his judgement.”

But the bigger problem is that before Hockey had even finished shaking hands after his budget speech, the terms of the ensuing debate had been settled: it would be about fairness, and Hockey and the government were on the wrong side of it. That’s why, on Wednesday, Hockey was trying to justify the excise indexation measure, not in terms of the need to get infrastructure going, not in terms of the need for the budget deficit to be curbed, but in terms of fairness. This is the wider context for his remark:

“I don’t think that a cursory look at the budget is enough for people to understand what we’re really getting at. You have to look at the detail of what people actually receive now, and people are receiving tens of thousands of dollars in payments from other Australians. What we’re asking is for everyone to contribute, including higher-income people. Now, I’ll give you one example: the change to fuel excise, the people that actually pay the most are higher income people, with an increase in fuel excise and yet, the Labor Party and the Greens are opposing it. They say you’ve got to have wealthier people or middle-income people pay more. Well, change to the fuel excise does exactly that; the poorest people either don’t have cars or actually don’t drive very far in many cases.”

Hockey was fighting not on the battlefield of his own choosing — infrastructure and the jobs benefits that would flow from an increase in building stuff throughout the country as mining investment falls — nor even within his broader narrative of budget discipline, but on the battlefield chosen by his opponents: fairness — a battlefield on which Labor has a massive advantage over the Coalition in terms of how voters see the major parties. Even the smaller parties have an advantage over the government on fairness. If Clive Palmer thrashes out a deal to support a heavily modified Medicare co-payment, for example, it’s his Palmer United Party that will get the credit from voters for responsibly ameliorating an unfair measure, not the Coalition.

But worse, in that exchange the presenter hadn’t even asked about fuel excise — Hockey himself chose to use it as an example. Not merely was Hockey fighting the wrong battle, he carefully laid out a minefield and then walked into it. After the cigar picture, the ill-timed holiday and lament that everyone hated him, no wonder colleagues are wondering about his judgement. Even the News Corporation tabloids felt moved to slam Hockey.

Hockey’s latest Incredible Self-Sabotaging Treasurer act has come at a point where the government appeared to be righting itself, courtesy of Tony Abbott’s capable performance in response to MH17. Abbott, unexpectedly, appears on safer ground internationally than domestically; his decision to spend the week visiting the Netherlands and having a whistle-stop tour of the Middle East was politically sensible given that’s where his strength currently is. But he can’t keep the focus international forever. The domestic priority has to be to find a way to reframe the budget argument away from fairness. In opposition, Abbott was brilliant at reframing debate around Labor’s policies in terms that suited him. Now he’s a victim of exactly the same thing.

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