Gillard's Gonski election gamble

Will the Gonski reforms force Australians to choose between their heads and their hearts come election time? Tony Windsor believes voters will have to sacrifice middle class welfare to get it done. It will make for a clear electoral divide.

In announcing what will become the nation’s longest ever election campaign Prime Minister Julia Gillard and Opposition Leader Tony Abbott spelled out two distinctively different views.

For his part, Abbott said the September ballot would be "a referendum on economic management’. The Prime Minister flagged an education "crusade”seeking to address the nations’ slipping school standards, which she said would "define” this final term of her prime ministership.

Unwittingly — or perhaps wittingly — the duelling leaders, with their conflicting visions, set up what is to become a key battleground for Election 2013: the balance between big-ticket spending and fiscal conservatism. With opinion polls showing both parties are within striking distance of the Lodge in September this will be a decisive question for voters come election day — a tussle between the head and the heart.

Federal independent MP Tony Windsor — one of the so-called kingmakers of the 2010 hung parliament — said if there was to be a bipartisan light in the vitriolic darkness of parliament’s squabbling, delivering the long-heralded education reforms might just be it.

In an election year, the Coalition will be looking to minimise any glory Labor might receive from delivering such widespread reform while being careful not to paint themselves as anti-education. Meanwhile, the Gillard government will be forced to equilibrate the large-scale education revolution embodied by their campaign rhetoric, while avoiding perceptions they are becoming divorced from economic reality.

Funding announcements were conspicuously absent from both Gillard’s and Mr Abbott’s keynote speeches this week, and Windsor, a supporter of the Gonski plan, said the time had come for the government to reveal how it planned to fund its education "crusade”.

"[Rob] Oakeshott and I have been very strong on this, we’re encouraging them to get on with it,” he told Business Spectator.

But Mr Windsor warned for that to happen the government will have to confront a series of difficult decisions — including making cuts to middle class welfare, things that Labor has already deemed "wasteful”such as the dependent spouse tax, tax breaks for golden handshakes and the millionaires’ dental scheme — which will ultimately pose a difficult question to middle Australia. One the election may hinge on.

"People want it all, you see.

"And [this] will be an issue for the Labor party, because it’s a legitimate question to ask of them; are you going to take something away from the middle-class welfare to go towards children?”

In demanding sacrifices in aid of a better future for the next generation, Ms Gillard partially shields herself from politically unpalatable spending cuts and forces Abbott to present a more extreme approach to his platform of superior fiscal responsibility.

Windsor said shadow Treasurer Joe Hockey was correct when he said it was impossible to maintain such high levels of welfare spending long-term in any budgetary process.
"Just because John Howard spent a whole mining boom on pork-barreling middle-class welfare, doesn’t mean that that can go on forever.”

The coalition will argue when the government attacks middle class welfare, what it is really attacking is the middle class itself. It would be another tooth for the ferocious Coalition tiger still chomping away the corpse of Labor’s abandoned surplus pledge. Mr Abbott said in walking away from its "hell or high water” surplus pledge in December the government "branded itself an economic failure” and in doing so attempted to present the decision in a retroactively stark light. And this will be the message of the Abbott campaign: what good are Labor’s big ticket plans if they can’t be responsibly funded?

For his part, Windsor believes education reform is worth abandoning a government surplus for. "I think that’s probably one of the reasons they walked away from the surplus, because Gonski will require substantial funding,” he said.

Windsor conceded he had no direct involvement in the government’s decision to abandon their pledge to return the budget to surplus late last year, though had been "saying for months that a surplus doesn’t necessarily demonstrate good economic management”.
"It can,”he said, "but I think given the circumstances that were starting to develop around September last year having a surplus for the sake of saying you’re having a surplus wasn’t necessarily the best thing to do."

Windsor’s support of the Gonksi reforms — and indeed his support of other key Labor projects, particularly the National Broadband Network — have certainly delivered his electorate some favourable outcomes and surely given a boost to his popularity in the process. Despite that he will encounter a tough battle when he faces the people of New England — a traditional National party heartland already critical of his "defection” to Gillard in 2010. In September he must convince the electorate his decision to support Gillard has brought them real benefits. Chief among his arguments will be his role in delivering the dividends from the NBN, both those already paid and to be paid in the future.

The Prime Minister too, is selling future dividends. She will argue the long-term benefits of large-scale spending projects will outweigh any short term pain — to welfare, the budget or reputations.

In the end, this is what voters will have to weigh. Luckily, we have eight months to do just that.

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