Flat White

Play on Labor’s ground, surrender the advantage

5 April 2019

7:50 AM

5 April 2019

7:50 AM

The 2019 Budget has been a budget that satisfies everyone but pleases no-one. It has proved to be a Labor-lite document lacking genuine reform and has handed the keys to the Lodge to Bill Shorten on a silver platter.

This week, Scott Morrison had a golden opportunity to seize the economic narrative ahead of the looming election. Instead of offering a bold and positive vision of what the Coalition stands for and where it wants to take Australia, instead the government’s strategy of appeasement has not given voters any reason to stick with them in the upcoming election.

This last Hail Mary provided an opportunity for the government to seize the narrative and fight the election on its terms – proposing bold economic policies and going out swinging. Instead, Morrison and his team are doing their hardest to avoid campaigning on conviction and instead will allow Labor’s policies to dominate the election, and no doubt will fear monger about Labor’s proposed investment taxes.

The budget signified the fact that the Liberals under Morrison seem to be adopting a strategy to retreat into their shells, afraid to stick a limb out in fear of it being bitten off by the opposition or the Canberra Press Gallery. Large swathes of the budget – tax offsets for low-income earners, extending the instant asset write-off and increasing infrastructure spending – is going to be matched or even bettered by Labor, buoyed by their $200 billion war-chest in new tax revenue.

No longer does the Liberal Party represent bold centre-right policies that they are willing to put to the public and be judged on. Rather, they seek to toe the Labor line and minimise any attack lines that Shorten may exploit.

The most comical example of their fear of political pressure was on Budget night when Cabinet Ministers realised that Labor was gearing up to attack them over leaving Newstart recipients off their energy assistance plan. Dreading the impending breakfast television attacks from their Labor counterparts, Morrison, Treasurer Frydenberg and Finance Minister Mathias Cormann held late night talks to scramble together an amendment to their signature pre-election pitch just hours after they announced it.

This Budget was the perfect national headline-grabbing platform for the government to set the stage and parameters of debate for their uphill battle to regain office. They had the chance to seize the narrative by outlining their plans to deal with power prices, stagnant wages and unaffordable housing. Despite the merits behind their congestion-busting promises to deal with the swelling capital cities, a concrete announcement on a practical reduction of the immigration level would have given them an issue to fight the campaign on where it can outmatch Labor. Instead, they proposed measures that are easy for Labor to duplicate – Chris Bowen was quick to rush to the airwaves to pledge that Labor will be nullifying any Coalition budget announcement that is publicly popular.

Every advantage the Coalition sought to gain from the budget, from tax cuts to announcing a surplus, has been nullified by an opposition desperate to outline a populist economic message based on so-called ‘fairness’. The main fault in this budget is that Morrison’s positive economic message is in no way distinguishable from what Labor is offering voters, other than his pledge to not raise taxes. Whilst this may resonate with voters, workers who have been experiencing ever-stagnant wage growth and rising power bills are less concerned about capital gains taxes and more concerned with increased pay packets. Whether Shorten and Bowen can realistically achieve this is irrelevant to a public that is weary from two terms of instable government.

By going down the path of avoiding controversy at all costs, the government has lost its ability to gain the ascendancy in the economic debate against Labor on philosophical grounds. Where once Liberal Governments stood up for small government, this regime has done little by way of reducing spending and offering real fiscal conservatism. True, Morrison and Frydenberg have climbed a mountain by reversing six years of economic incompetence under Labor, but it is impossible to argue that they could’ve achieved this without the good fortune of iron ore and coal-fuelled tax revenues. Yet by offering a pork-barrelling and big election spending platform, the Government undermines its own narrative as being prudential economic managers.

The surplus was meant to be the watershed moment where voters were reminded of the horrors of the Rudd-Gillard-Rudd years. While seeking to establish a clear advantage over Labor as competent economic managers, the Coalition cabinet had been drip-feeding to the Canberra press gallery ever since last year’s MYEFO update that Frydenberg would be able to stand up on budget night and announce that, for the first time in a decade, Australia had recorded a surplus.

While the fiscal restraint and commitment to budget repair must be commended, the overwhelming sense of disappoint was apparent when a wearily sceptical Australian public learned that for this financial year, Australia would still post a budget deficit of $4.2 billion. Despite Government promising that next year we would finally post a $7.1 billion surplus, the public has cause for suspicion given that this is still 15 months away and Treasurers have been known to unrealistically forecast budget revenues before (hello, Wayne Swan).

By putting forward a vanilla Labor-Lite budget, the Coalition has not provided any reasons to voters to stick with them. Labor, to its credit, has been trumpeting its election policies for years, having made detailed policy announcements on industrial relations, negative gearing, capital gains tax and dividend imputation credits. Whilst the merits and economic sensibility of these plans can be easily debated, their “fair go” doctrine is clear, concise and defined. As voters head to the polls in May, they will have a strong understanding of Bill Shorten’s plan for the country as they become increasingly frustrated by stagnant wages, lack of affordable housing and congestion in the cities.

Rather than having the gall to fight Labor on energy, Barnaby Joyce is instead lobbing grenades at Morrison over power prices. Instead of campaigning on building dams to help regional New South Wales with the crippling drought, the Nationals are pandering to the Greens and allowing their support to decline to record lows. And in place of pledging to reduce immigration to sustainable levels, Morrison’s addiction to its economic sugar-hit is seeing the Liberal vote fracture to fringe right-wing parties.

With this budget effectively signing the title deed of the Lodge to Shorten, the Coalition has the silver lining in a period of introspection in Opposition to properly outline and define what it stands for. Morrison’s balancing act between appeasing inner-city Liberals and National voters in Regional Queensland is not sustainable in the long-term. Instead, what’s left of the parliamentary party must reinvent itself as a centre-right party of the twenty-first Century.

Tom Waite is a third-year Commerce Student at the University of Melbourne

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