As plenty of observers have noted, Tony Abbott’s hypocrisy in calling for a “mature debate” on tax reform and federalism is almost palpable.
Speaking last night to those noted advocates of economic reform, the Business Council of Australia, he laid it on still thicker. Among the reforms he nominated as demonstrating his government’s commitment to getting the budget under control was “changing social welfare indexation means that we avoid saddling the next generation with this generation’s debts”. That was a reform that was “too hard for the Howard government”, he said, but “one charge that can’t be made against this Government is that we’ve put short-term politics above the long-term national interest.”
Of course, in 2011, when the Labor government proposed to stop indexation of family tax benefit payments, Abbott called it “class war” and Joe Hockey called it “politics of envy”. The Coalition’s cuts to family tax benefit payments go beyond a pause in indexation to include a cut to the access threshold to $100,000. But that’s not “class war”, that’s “avoiding saddling the next generation with this generation’s debts.”
But Abbott went further last night, suggesting that failing to join in his “mature debate” on tax and federalism was somehow unpatriotic, saying he was “inviting the Labor Party, the state governments to join Team Australia and think of our country and not just the next election.” So, it’s “class war” when a Labor government seeks reforms, but a failure of patriotic feeling when Labor fails to support a Coalition government.
But hypocrisy is one of the great lubricants of politics. Yesterday’s cynical opportunist is frequently today’s statesmanlike mature debater, before transforming into tomorrow’s grubby hypocrite as the cycles of electoral fortune carry people back and forth from government to opposition. Labor, which continued to oppose a GST even after John Howard took it to an election and won, doesn’t have an especially strong case to complain about opportunism in opposition. And just because Abbott is being profoundly hypocritical doesn’t mean he’s wrong in suggesting that Australia could benefit from politicians of both state and federal level being a little less, well, political about tax and federalism.
The more substantial problem for Abbott is that, for all that he is correct to seek to initiate such a debate, he comes to it without any goodwill or trust, and that is likely to cruel whatever chances he has of success. The opposition of Labor is virtually a given — and from Labor’s perspective, an entirely rational decision. But the government needlessly upset the states with its unilateral $80 billion budget funding cuts in health and education in May, and it has given Labor oppositions in Victoria, NSW and Queensland another issue to campaign on with a possible GST rise. Goodwill at the state level is going to be hard to come by for a time.
Similarly, voter goodwill on reform might be hard to come by after the government’s budget debacle, which damaged voter perceptions of both Abbott and Treasurer Joe Hockey, although Abbott has managed to recover some ground with voters by emphasising national security. Reform is only successful if voters trust the political leaders implementing it, in the way they trusted Hawke, and trusted Howard, for a time. The budget has badly damaged voter trust in the Coalition. Nor will last night’s speech help things. Abbott used his address to the BCA last night to call for it to lead the charge for economic reform, similar to the way he has repeatedly tried to outsource the prosecution of the case for industrial relations reform to business. But business is not particularly well regarded by voters — the main fiscal reform most voters, including Liberal voters, want to see is businesses paying more tax. And voters already think the Coalition’s economic management is primarily aimed at benefiting business rather than voters. Getting business to lead your campaign for economic reform is akin to putting Jacqui Lambie in charge of outreach to the Muslim community.
The lack of voter trust in the government will also increase the risks around its decision to index fuel excise regardless of Senate opposition. The government is well within its rights to implement the increase without legislation, and previous governments have done the same. But the idea that Labor and/or the Greens will somehow feel pressured into supporting legislation for it next year is an eccentric one: the rise will be hated by motorists, remind them of the government’s broken promises, and give non-government parties the opportunity to establish their credentials for reducing the cost of living for motorists by blocking it.
In a rational world, of course, this trivial increase in excise would occasion little comment, given it is so small as to be barely noticeable amid oil price and currency volatility, and it would be Labor and the Greens being criticised for undermining revenue and preventing a carbon price signal for fossil fuel use. But in Australia all politicians genuflect to the Motorist — just as the Coalition did in opposition when it tried to link the carbon price to fuel price increases. Worse, there is no trust or community goodwill for the government to draw on in arguing its case for indexation (which it has never done, beyond Joe Hockey saying poor people didn’t drive). That goodwill has been consumed in less than a year through political maladroitness and zealotry, and it will undermine all government attempts to argue for reform henceforth, until it can somehow recover it.