Flat White

Malcolm Turnbull: governing for headlines and opinion polls

26 April 2017

2:17 PM

26 April 2017

2:17 PM

You would think that after imposing what they had promised not to impose, a new tax on superannuation, or the backpacker tax, the Turnbull government would have at last learnt its lesson. Governing contrary to the principles of the ruling party or where self-interest is the dominant purpose, for example, to create media headlines and influence the next opinion poll, is wrong and does not go unpunished.

Take one example, the superannuation tax. The government promised never to impose it. Moreover, it was completely unnecessary. The build-up of very large superannuation funds was already a thing of the past. It had been stopped over the years by the increasing limits placed on contributions. There was no problem.

One of the stated purposes of the new tax went completely against the principles of the Liberal Party. This was to take money from savers and redistribute this as a gift – not welfare – to those who had not saved. Moreover, it left the politicians’ platinum-plated and gold-plated schemes producing magnificent returns in place, supplemented by two institutions created by the politicians. One is “jobs for the boys (and girls)”.  The second is allowing what is forbidden in some countries, moving directly into the lucrative profession of lobbying politicians. Now, what is lobbying? It doesn’t require great skills. All the lobbyist has to do is secure taxpayer funded government contracts by opening the doors of politicians he or she already knows and who of course will be potential candidates themselves for future careers as a lobbyist.   This is particularly questionable where a minister awards lucrative contracts without tender or an open process to a lobbyist’s client, particularly when that lobbyist is a powerbroker who plays a key role in preselecting new politicians in the minister’s party.

In the meantime, the unintended consequences of the new superannuation tax include discouraging people, young and old, from investing in superannuation.  This is because of the entirely justified suspicion that politicians from both sides will change the rules. Another unintended consequence is that the appallingly complicated new rules adopted to levy the new tax create significant additional compliance costs for everyone.


Many in the coalition’s base saw the new tax as being targeted against it.  The result was that many party members went on strike both, declining financial contributions or working during the election. They and many coalition supporters decided that, contrary to expert advice, they did in fact have somewhere else to go.  A significant number gave their first preferences to other parties.  The superannuation tax has been a disaster for the Liberal Party.

Then came another act of unbelievable foolishness on the part of the government. This was their decision to go ahead and try to seize almost one third of the miniscule earnings of young foreign backpackers. The services of these young people had become necessary because the politicians have, mainly as a vote buying exercise, trained a number of young Australians not to work but to live off welfare.  With all their vast resources, including their armies of advisors, the government seemed appreciate that backpackers are mobile and not bound to come to Australia.  With the harvest threatened, the government eventually compromised on the level of the tax, although various ministers had previously declared they would never do this. In an act of unbelievable meanness, they still managed to steal most of the young backpackers superannuation.

After this, we would have thought that before rushing into some new decision they would think first. But then, to play the powerful political leader to the media, the Prime Minister announced the dramatic ending of the 457 visa scheme, without first ensuring that there were no unintended consequences. Surely by now they had realised that the way to do this would have, at least in the grey areas, to release a discussion paper setting out the options.  Above all, there should be an immediate review involving public consultation of the size of the immigration intake mainly into overcrowded Sydney and Melbourne, as Tony Abbott proposes.

The business columns of the newspapers are now full of examples of 457 visas no longer being available for the most ideal of potential immigrants, workers with those skills, which are desperately needed here. These are neither the unassimilable nor the welfare immigrants, nor the chain immigration brought in merely because they are related to other immigrants.   Of course the rorts should have gone and gone earlier, but the overall review and the 457 grey areas should have been put out for discussion to avoid the number of unintended consequences which are now emerging. But no, the Prime Minister had to show himself as a determined and powerful leader who gets things done.

The universities and the IP sector are up in arms. In The Australian on Anzac Day, the respected finance columnist, Robert Gottliebsen, writes about a firm which had been unsuccessfully advertising for a specialised international property lawyer for 15 months, someone no doubt essential for the development of new technologies and ventures in Australia. They could not find such a person in Australia but eventually found one overseas, someone clearly eligible for   a 457 visa.  Believing there was no problem, the person selected and her husband resigned their jobs to come to Australia. But suddenly, this occupation was  “mysteriously… removed from the list of 457 occupations.” She can no longer come to Australia. He gives other examples, as do many other reputable business journalists.

The point is that immigration overall has to be subject to a root and branch review involving the people, rather than the Prime Minister playing around at the edges to impress the commentariat.

There is one thing tragically absent from too many of the decisions of the Turnbull government. It’s plain down-to-earth common sense. Will they never learn? They will only if they decide to govern in the national interest and according to the principles on which they were elected, not for headlines and to influence the next opinion poll.

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