News & Current Affairs
16 March 2015
Abbott running short of spares
We all know the car industry is on its way out. This week Tony Abbott decided he was not going to willingly join it at the exit. There is no other way to see the decision to reverse a planned cut of half-a-billion dollars to the car makers and local component manufacturers. The stated reason was the factories were in grave danger of running out of parts if their suppliers shut up shop before the scheduled closures. The real reason was the prime minister had run out of spare political capital. Some of his strongest backers in South Australia had hit the panic button. If he wasn’t prepared to shift, he risked losing their support.
Everything that is happening with the government of Australia is through the prism of leadership. The opinion polls are now the pulse of the prime minister’s grip on his political life. Newspoll reversed the euphoria in some quarters of last week’s Fairfax Ipsos poll. There was improvement in Abbott’s condition from critical to serious but stable. Only 28 per cent approve of his performance; a whopping 63 per cent don’t. Labor’s Bill Shorten has an 11-point lead as preferred prime minister. And focusing the minds of the backbench, the Coalition fell 10 points behind the opposition, 55 per cent to 45 per cent.
Putative leader Malcolm Turnbull concedes everyone in the party pays a lot of attention to the polls: “We are behind in the polls and we need to lift our game.” When asked on Brisbane ABC Radio why he is not the prime minister, he factually answered that he didn’t have the numbers in the party room. Abbott did. Turnbull didn’t quite put it that way – he said Abbott is prime minister because he enjoys the confidence of the party room. The question still is, for how long?
Consider this perspective. There have been 23 polls this year; in 22 of them Labor has led by at least six points. In only one of them has the lead been closer than 53-47, the outlier Fairfax Ipsos poll of the previous week 51-49. Liberal MPs have no doubt they are all being individually monitored by the prime minister’s office and its agents, such as the new chief whip. Abbott is determined to shore up his numbers and any sign of drift will spur remedial action even if it is at the cost of economic credibility. According to one source, he has lamented, “You can’t trust any bastard around here. They all want something.”
As a consequence we are seeing an erosion of the fiscal agenda this prime minister brought into government. An agenda in no small part championed by right-wing think tanks – particularly the Institute of Public Affairs. Little wonder the most scathing criticism of the latest about-face on car industry assistance came from the IPA. Its policy director, Chris Berg, bluntly asserts the decision shows the government doesn’t know what it wants out of the political economy. He told ABC TV it sends a message to rent seekers across the country that, even if the government says it’s shutting the door to your claims on taxpayers’ money, you can still barge your way in. Berg doesn’t have to worry about votes, either in the party room or in the broader electorate, but this warning would surely resonate: “The government’s walking itself into a real trap here. It’s spelt out the case for reform in the Intergenerational Report (IGR). But everything else it’s doing suggests it’s completely gun-shy. It’s going to shirk the hard decisions. And the 2015 budget looks like it’s going to be an absolute wash. It’s just going to set the economic problem far into the future.”
Last year’s budget lost the trust of voters. This year’s budget is in grave danger of burying the government’s residual credibility if Berg is right. All the evidence since the excitement of the unsuccessful spill motion suggests he is.
Abbott says he is “relentlessly focused on the sorts of things which are front and centre for the people of Australia”. The trouble is these are the very things that see him backtracking on policies he said were “absolutely necessary” to repair Labor’s debt and deficit legacy. The defence force pay rise and the GP co-payment are telling examples. And there will be more to come.
There’s enormous pressure for a rethink on the indexation of the aged pension. So far the prime minister is standing firm, but 2.3 million pensioners are hard to ignore. National Seniors Australia is demanding the legislation in the senate be pulled and the proposal be taken to the next poll. Good luck with that. Last weekend, Joe Hockey didn’t think it would be the sort of trigger you would want for a double dissolution or any election. Two of the backbenchers behind the leadership spill, Andrew Laming and Warren Entsch, are agitating for the indexation to go back to wage rises rather than the cost of living. Laming says it’s one of the demands made on Abbott as the price for his survival. If there is a cave-in, the Parliamentary Budget Office estimates it will cost the budget $22 billion over eight years.
Complicating the picture is the new social services minister, “Fluffy” Morrison. He is spruiking incremental reform and a willingness to rethink the denial of benefits to the young unemployed for six months. His performance is a bonus and a threat to Abbott and Hockey. A bonus in that it potentially improves the government’s image. A threat in that he makes their performance look, well, ordinary. Makes you wonder how discussions in the expenditure review committee of cabinet are going. The instability is making Treasurer Hockey’s job a nightmare. He isn’t helping himself running contradictory messages. His IGR paints a picture of an ageing but wealthier nation, while at the same time he is warning the government’s budget deficit will keep ballooning unless spending is reined in and Australians do more to look after themselves. His predecessor Peter Costello noted the conflicting messages in his appearance on the ABC program 7.30. He welcomed the IGR as a chance for a reboot, but scoffed at one of its more heroic assumptions of 35 years of budget surpluses.
Neither was Costello all that impressed with Hockey’s thought bubble on allowing first-home buyers to raid their superannuation nest egg. He revealed the Howard government had looked at it and rejected it. There was an unusual alliance of former treasurers denigrating the idea. The father of compulsory superannuation, Paul Keating, was scathing. He accused Hockey of wanting to smash a world-class retirement incomes system.
Hockey’s performance is as much on trial as Abbott’s. The spectacle of him literally in the dock this week as he pursued a defamation suit against Fairfax Media has dismayed some on the backbench. At a time when he is supposed to be hard at budget preparations he was seen pursuing his own interests and not doing it very convincingly. He denied the North Sydney Forum was a fundraiser for him even though its website and membership forms spell out the idea is “to assist Joe Hockey”. The reward for membership: access to the treasurer at “boardroom” events and other functions. The treasurer better hope the judge has a kinder view than his colleagues. The prime minister was forced to defend him, saying Hockey had worked on his budget abacus last weekend. His two days in court were “days in lieu”.
Hockey’s fate is tied to Abbott’s – the budget widely seen as a last chance for both of them. But there is also a strong view that Abbott will not do a John Gorton if his survival comes down to one vote in another spill. In 1971 the former Liberal prime minister used his casting vote to end his hold on office. This prime minister’s party room critics see his attacks on the United Nations, for finding that our treatment of asylum seekers amounts to torture, as a transparent bid to shore up his support on the right. Not so much in the broader community but in the parliamentary party. Abbott was shocked when some of the prime movers against him last time were among the more conservative MPs.
Every number counts and in Western Australia the right tends to take a much tougher attitude, maybe meaner, than Abbott on indigenous issues. His remarks supporting the closure of 150 remote area Aboriginal communities were seen in this context. “He can put Don Randall and Dennis Jensen back in his column,” was the terse assessment of one of their colleagues. These two boycotted Kevin Rudd’s apology to the Stolen Generations. They would find nothing to quibble about when Abbott said that governments couldn’t endlessly subsidise people who chose to live far away from schools and jobs. The clincher: “It is not the job of the taxpayer to subsidise lifestyle choices.” Never mind that Aborigines in remote areas don’t choose to live where they were born as a sea change. Noel Pearson, one of Abbott’s allies in the Aboriginal community, was bitterly disappointed. But then Pearson doesn’t get a vote in the party room.
When you’re running out of spare votes, just like spare car parts, whatever it takes is the order of the day.