Abbott’s failed experiment is not the end

The trick of outsourcing election pledges to the Commission of Audit did not work. Yet its chaotic aftermath opens up political opportunity for the side of politics brave enough to grasp it.

Abbott’s 2013 political experiment has failed. In essence, it involved presenting a set of unbalanced books to the Australian public, with a promise to balance them again after a Commission of Audit had told his government what to do.

Well, the Commission gave its report, the government adopted some of its suggestions in the 2014-15 budget, and all hell broke loose.

If the Abbott Government does not call a double-dissolution early next year, as one commentator suggested it should, its strategy for a 2016 election will have to change radically.

Public outcry over pension changes, welfare cuts, education and health cuts, the GP co-payment plan and much more has given Labor the chance to be wantonly obstructionist on what Treasure Hockey calls ‘$28 billion’ in budget savings.

Opposition leader Bill Shorten can, at present, get away with just about anything. He’s is now playing a loaves-and-fishes trick of his own -- Labor won’t cut ABC funding, or health and education, or our unsustainable university funding model ... and it won’t raise the GST.

But where would Labor find the money to cover all that?

There are obvious places to look, such as more than $30 billion in super tax concessions being paid to older, more affluent Australians, and forcing younger Australians into a kind of debt-based servitude (see When the young abandon Australia, November 19).

But that enormous baby-boomer voting bloc is too dangerous for either side of politics to make any attempt to claw back those regressive benefits. Unless a single-purpose ‘Young Australia Party’ is formed, there’ll be no change there.

So both parties have a problem in the longer term.

Labor cannot continue saying “look at the size of Hockey’s deficit!” without suggesting closer to the 2016 election how it would plug the spending shortfall.

And the Coalition cannot keep saying, in robot-like fashion “we showed you a solution ... you didn’t like it ... so the deficit is your fault!”

And yet something has to give. The petulant tone of Australian politics since Abbott won control of the Coalition in late 2009 cannot go on.

It was Abbott who brought in the tactic of suspending standing orders in question time, day after day, month after month, to disrupt the Gillard government.

It was Abbott himself, and then-leader of opposition business Christopher Pyne, who ran from the House of Representatives like naughty school boys rather than accept Craig Thomson’s “tainted vote” when he had left the Labor Party in disgrace.

And it was Abbott who reintroduced a Whitlam-esque “trust us” message on balancing the budget -- effectively arguing that although his election promises didn’t add up, a “grown-up” government would be able to find the money somewhere.

Bill Shorten is now in grave danger of putting in a similarly counter-productive and childish performance.

The Labor benches seethed with anger between 2010 and 2013, as Abbott ground them ever lower in the opinion polls. Shorten’s job is to resist calls for revenge and ‘oppose’ in the best interests of the nation -- yet by opposing even savings put forward by Kevin Rudd before the 2013 election, he’s failing to do just that.

Ultimately one or other of these two flawed leaders, Abbott or Shorten, will have to try a new narrative on the Australian people.

It must be something like a ‘war footing’ narrative, because it needs to acknowledge so many cases of ‘bad luck’ for Australia, all arriving at once.

After 23 years of uninterrupted economic growth, Australia has to deal with, amongst other things:

  • the end of the mining investment boom, a reversal in the terms of trade and a falling dollar that will hit our standard of living in the tradeable goods sectors.
  • stagnant wages, cautious consumers pulling back expenditure, and the effect of both these on federal tax revenues.
  • the ongoing decline in jobs in sectors such as manufacturing and retail, exacerbated by an era of automation that means economic growth may no longer be simply correlated with job creation.
  • the ageing population and the consequent rising cost of healthcare.

More unemployed Australians to look after, more oldies to provide with decent healthcare, tumbling tax revenues and a population experiencing a ‘wealth shock’ due to flat-lining wages and the uncertainty of global forces ravaging our asset markets in the months ahead. What kind of narrative could make sense of all that for voters?

It must be strikingly honest, and suitably scary (as ‘war footing’ narratives tend to be), while painting a vision of what’s on the other side of the pain that lies ahead.

In fact, though Abbott appears to be slipping inexorably into one-term territory -- Labor leads the Coalition 55/45 on a two-party preferred basis -- he also has a historic opportunity to become the economic ‘war leader’ that reshapes Australia.

His problems to date all stem from his gross dishonesty before the last election -- pretending the ‘$70 billion hole’ in his costings wasn’t there, lying about where cuts would fall, and backing the ludicrous idea that with ‘grown-ups’ in charge, business and consumer confidence would bounce back.

They bounced like slugs on a blancmange.

Well before the 2013 election, then AWU boss Paul Howes gave a speech that this commentator hailed as “historic”, because it called a spade a spade (Howes’ grand compact is urgently needed, February 6, 2013)

But the left couldn’t digest it because it dared to criticise unions.

And the right couldn’t digest it because, though it got Australia’s dire economic predicament spot on, Mr Howes wasn’t a card-carrying Liberal or National Party member.

No wonder he’s left politics for a nice job with KPMG.

The historic nature of the Howes speech, I will continue to argue, is that either Tony Abbott or Bill Shorten will gain respect and momentum with voters if they can be so brutally honest.

It would make a nice change from childishness, obstructionism and gross dishonesty.

Whether two years is long enough for either Abbott or Shorten to grasp that nettle remains to be seen.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles