Turnbull Morrison welfare spending

After more than 18 months of being accused of being captive of the right of their party, Malcolm Turnbull and Scott Morrison have shifted radically to the centre in a desperate move to save their government. Tonight’s 2017 budget is a tax-spend-and-borrow document designed to appeal to voters’ populist instincts. Strip the names and dates off this budget and it could easily be mistaken for a Labor budget.

In fact, with the government’s “private school hit list”, stoush with Catholic schools over education funding and an outright assault on the big banks via a new billion-dollar tax, this is a budget that goes where Labor wouldn’t dare. And Turnbull and Morrison haven’t merely taken Gonski off Julia Gillard. They’ve taken her NDIS funding as well, bumping up the Medicare levy from 2019, for good. What next — a carbon price?

Labor backed the inland rail line, too, but that’s now to be a signature National Party project and a demonstration not merely that the government is prepared to invest in infrastructure, but also prepared to look after the bush — although how exactly regional NSW will benefit from a pointless train line is a mystery for Nationals infrastructure ministers of coming decades to explain.

There’s also an expensive attempt to fortify the government against a repeat of Mediscare. There’ll be $1.2 billion extra for Pharmaceutical Benefits Scheme listings (almost half devoted to cardiac drugs) and money for mental health, as well as an additional $1 billion to end the freeze indexation on some MBS items – initially the bulk billing incentive payment. But the real anti-Mediscare initiative is hilarious: the government is playing a pea-and-thimble trick with revenue from the Medicare levy and, separately, from personal income tax, which will be paid into a “Medicare Guarantee Fund” to somehow guarantee Medicare and PBS funding into the future despite making precisely no difference in funding.

Fortunately, such silly buggers stuff is rare in the document. The economic forecasts look a lot more rigorous than in 2016, and again the government has erred on the side of caution on crucial iron ore and coal prices. There’s nothing to frighten the ratings agency horses here, especially with new taxes featuring so heavily.

The image being projected is the one that gave Malcolm Turnbull a huge polling surge when he became leader – a can-do government committed to building things and governing from the sort of sensible centre voters like. Indeed, it’s actually hard to think of how much more Labor-like a Liberal government could have gone and survived.

Will it work?

There’s no such thing as a “budget bounce” when it comes to polling, but if this doesn’t succeed in getting voters to reconsider Turnbull, nothing will — he’s gone all out to restore some sense of what voters expected of him, the absence of which has disappointed them so badly in the last 18 months, But while voters may be prepared to assess the budget on its merits, and perhaps even give Turnbull another chance, it’s likely to infuriate sections of the right within the Liberals (the Nationals will be happy with massive regional pork barrelling, especially in NSW).

What’s the point, they will ask, of being in the Liberal Party if it’s going to govern like Labor? Why is the deficit, and spending, continuing to grow? Why are there two big new taxes in the budget – one on voters, one on traditional Liberal allies the big banks?

That’s the risk for Turnbull and Morrison, and what makes this document a desperate political gamble. The biggest threat to this budget isn’t on the other side of Parliament, or on the crossbenches – it’s sitting behind Morrison as he delivers his budget speech. If this budget doesn’t click with voters, that threat will crystallise and remove both men before the end of the year.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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