Turnbull Shorten Centre

So far, so good for the government: there’s been little in the way of reaction from the Liberal Right to its Labor-lite budget. That may eventually coalesce around a single issue, but thus far, it seems, the political reality that the government needed a popular budget seems to have trumped ideological concerns.

Bill Shorten is in no mood to take credit, of course, but Labor can quietly congratulate itself that its political skill over the last three years — and the astonishing cackhandedness of both Tony Abbott and Malcolm Turnbull — has seen the safeguarding of two of Julia Gillard’s key legacies, the National Disability Insurance Scheme and the Gonski school funding reforms — with the bonus that the Liberals are gunning for wealthy private schools in a way that Labor would never have dared to. It might have been politically smart for Turnbull to steal Labor’s policies — thus producing commentary about how he had “wrongfooted” or “wedged” Labor — but it means progressive policies being implemented and even defended by the side of politics that is historically dedicated to reversing them (Medibank, compulsory super, carbon pricing etc).

But there’s more to the government’s shift to the centre than simple political pragmatism. The reality that Liberals have to face — along with the business community and those of us who have long urged further liberal economic reform — is that the electorate, which never loved neoliberalism even as it made them richer, is now hostile to it and prepared to vote accordingly. This isn’t a simple shift to the “left”. There’s nothing particularly leftwing about targeting foreigners as the cause of economic disruption, but both sides have gone after foreign workers and foreign investors. But many of the core ideas of the left — a greater role for government, a suspicion, if not outright hatred, of large corporations, a strong social safety net — are all currently on display from a conservative government.

That’s produced a sight almost as weird as that of the government taking on Catholic education and targeting rich private schools for funding cuts — Scott Morrison getting stuck into the banks. Clearly the government was even angrier than it let on about Anna Bligh heading the Bankers’ Association. But it’s barely three years since the government wasted huge amounts of political capital bending over backwards to repeal the Future of Financial Advice reforms at the behest of their biggest donors, the banks. It’s not even a year since Turnbull went to an election defending the banks. Now, Morrison and Turnbull have ram-raided them and slapped a draconian new set of regulations on bank executives as well. And “suck it up” is the response to the banks’ complaints — which was also the response to laments from Santos and other gas companies about the government’s decision to give itself the means to expose export controls on LNG. No one blinks now as a conservative government proposes to dramatically re-enter energy markets.

Bizarre.

The budget has left advocates of further liberal reform lamenting that we’re going backwards. Indeed we are, especially on protectionism and misallocation of infrastructure spending. But the electorate’s tolerance for neoliberalism has vanished. They want local jobs, they want interventionist government, they want big companies perceived to be not paying their fair share punished (though, ironically, the big banks pay a far greater level of tax than virtually any other large company in Australia). Well, they always wanted those things, but something has made them far more likely to punish politicians who fail to provide them. Perhaps it’s the stagnation of wages in recent years. Perhaps it’s globalisation. Perhaps it’s that politicians are no longer able to explain the benefits of reform. Likely, it’s all those things plus some more, ill-defined phenomena. But any government that refuses to heed this shift will get turfed out. Or, more correctly, its party will turf out the leadership. It’s called democracy, like it or not.

Get more Crikey, for less

It’s more than a newsletter. It’s where readers expect more – fearless journalism from a truly independent perspective. We don’t pander to anyone’s party biases. We question everything, explore the uncomfortable and dig deeper.

Join us this week for 50% off a year of Crikey.

Peter Fray
Peter Fray
Editor-in-chief of Crikey
50% off