Flat White

Budget 2017: placing politics over principle always fails

17 May 2017

7:37 AM

17 May 2017

7:37 AM

When I signed up as a member of my university’s Liberal club, it was for good reason. It was 2011 and in the midst of the Rudd-Gillard-Rudd years, it was clear that populism had failed. The education revolution cash splash was a disaster, forcing my school to pay contractors above the market rate so my parent’s taxes could go towards a fence we didn’t need that kept us from grabbing pizza during recess.

It was clear that feel-good spending programs funded with tax hikes and other moves calculated to purchase votes rather than to do what was right had not only resulted in a cynical political culture highlighted by leaders and their deputies backstabbing each other to get ahead but had failed miserably. The Liberals appeared to be a principled, conservative alternative by comparison – willing to stand up for free, competitive markets, to make tough decisions and to call out the government on its irresponsible spending and high taxes.

Seven years on, and the lesson is being learnt all over again. This time by a Liberal government that has seemingly thrown in the towel and doubled down on late-2000s Labor’s populist strategies of big spending funded by big tax rather than doing what is necessary albeit right.

Unsurprisingly, it’s not working.

Newspoll results in the wake of last week’s budget reveal a government that continues to lose ground to Labor, backed by 47 per cent of voters against Labor’s 53 per cent in two-party terms. The government’s budget branding strategy of downplaying the significance of the proposed 25 per cent increase in the Medicare levy and going after the boogeymen that are the big 5 banks with a new banking tax – a move straight out of the Bill Shorten ‘tax the rich baddies’ playbook, seem to have failed too.

Forty-five per cent of voters believe that they will be worse-off under the budget, the worst result for a commonwealth government in 17 years. Voters understand that a significant Medicare levy hike is a revenue grab that hits all workers who pay tax. They understand that a tax on banks is likely to be passed on to anyone who deals with the banks. But most of all, they understand that this is the budget of a government devoid of a message that struggles to buy its own rhetoric.

We are told that there was no choice. That moves toward a lean, efficient government are simply unrealistic because of a hostile senate crossbench and a fierce opposition that, despite its unpopular leader, has countered the government at every turn. What matters now is that the budget is realistic enough to pass and an easy enough sell to go down well with the electorate. Gone are the Howard and Costello years when things were a lot easier.

But this isn’t true.

John Howard and Peter Costello faced a far more hostile senate than we do today with minor parties including The Democrats who sat to the left of most of the government’s current adversaries including the Nick Xenophon team. Yet, they successfully passed significant over spending cuts, slashed regulations and overhauled industrial relations – a move the current government wouldn’t dream of touching with a ten-foot pole. They also passed major tax reforms. Many of these were highly controversial or even unpopular at the time, and yet the senate and majority of the population followed – because they knew that at the very least, they were dealing with a principled government that believed in the values it was elected to govern by.

The policies weren’t sold on the premise that they ‘aren’t that bad’ – they were sold on the firm conviction that this is what has to be done to ensure a sustainable and stable future. Conversations about difficult and radical reforms such as the GST were started early and sustained throughout the government’s tenure – not hastily proposed and then clumsily withdrawn following opposition attacks and public backlash. Only through the government’s resilience and willingness to fight was the electorate sold the mandate that difficult policy was necessary and would produce returns in the long run.

The strategy of adopting Labor’s fiscal principles ultimately tells the people that there aren’t any real differences between Liberal and Labor. That the ideas of individual freedom, limited government, personal responsibility and stability are just slogans. That the government is prepared to come down to Labor’s level even if Labor can beat them with experience. The narrative that the coalition is at least ‘less worse’ is cynical and flaccid. It is sure to kill any chance they have of selling two major tax hikes, which remained under wraps until the budget’s release.

The government must return to its Liberal roots by showing principled leadership even if this means potentially falling on its sword come election time. An election loss is one thing, but setting a precedent of a centre-right major party sacrificing its ideals is a far more dangerous, potentially irreversible future.

Because, by God, we are so much better than this.

Satyajeet Marar is a Sydney writer and Research Associate for the Australian Taxpayers’ Alliance. He can be followed on Facebook.

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