06 March 2016
by Paul Bongiorno
Tony Abbott's party room broadsides
Tony Abbott arrived at the Coalition party room this week with a carefully crafted attack on Malcolm Turnbull. Its barbs were coated in treacle so thick one cabinet minister described it as almost nauseating. Turnbull responded almost in kind. His response to the man he replaced because he was an economic dud was laced with irony bordering on sarcasm.
The official briefing – which is a standard part of these meetings, where the press gallery is given a background account of events – played down the significance of the exchange. “He wasn’t having a go directly at anybody,” the gallery was told. “He was being very inclusive. There was no shirt-fronting, no chest poking.”
Still, few in the room missed what was really going on. Abbott’s first foray into the policy debate since his demise was a brazen attempt to foist on his nemesis the failed prescriptions of the 2014 budget. He was urging the prime minister in the run-up to an election that appears to be tightening to embark on a slash-and-burn strategy. It was like the Star Wars sequel, The Empire Strikes Back.
Abbott said it was time “for the leadership to take on the savings challenge again”. Liberals are about small government, and hacking into spending is the path to fiscal rectitude. If anyone could sell it, it would be Turnbull with his “communication skills”. Abbott said Turnbull had been “brilliant” prosecuting the case against Labor’s negative gearing proposals.
Abbott’s rush into print last weekend to defend his legacy was a piece of delusional pre-emption. Abbott piously warned his colleagues that you can’t reduce taxes by raising taxes. He said negative gearing – costing the budget bottom line billions – should be left untouched. Not for good economic reasons but for the political advantage of a stark differentiation with Labor. Again, Abbott said, superannuation’s overly generous tax treatment should be left in place. Never mind that it’s the top 5 to 10 per cent that reap most of the benefits. Finally, Abbott said, capital gains tax discounts, introduced when the budget was awash with revenue from the mining boom, should also be quarantined.
Four other MPs joined the revolt. For many it was orchestrated and it was infuriating. Veteran Liberal Russell Broadbent jumped to his feet. He reminded his colleagues that they had elected Malcolm Turnbull to govern and to take the tough decisions needed to ensure Australia is a prosperous egalitarian nation. His remarks were greeted with applause.
Turnbull told “Mr Abbott” that he and Scott Morrison were carrying on the work “courageously” begun by him and Joe Hockey. His employment of the word “courageous” was no accident. In the lexicon of the British TV series Yes, Prime Minister, when a government is courageous it is courting electoral defeat. “Brave” merely threatens it with the loss of some votes. It seems Turnbull is prepared to be brave but not foolhardy. He said, “Leadership is about continuity and change.” He assured the former prime minister that he was not wanting to lead a “tax and spend” government.
Abbott and his acolytes – among them the very conservative senators Cory Bernardi, Zed Seselja and Eric Abetz – have seized on the vacuum created by the government’s protracted consideration of its tax plans to wage a proxy war on Turnbull. But they are a small posse. As one frontbencher told me: “If Tony thinks the party room would turn to him if Malcolm went under a bus, he’s dreaming.”
Bolstering such a dismissive view is a new book by journalist Niki Savva. In 92,000 words she chronicles the failure of the Abbott project. The title says it all: The Road to Ruin: How Tony Abbott and Peta Credlin Destroyed Their Own Government. The author found no shortage of sources in the parliamentary party and among staffers to mount the case. As Laurie Oakes puts it, this is “the weirder-than-weird story of a duo who couldn’t govern to save themselves”. The point is, the party room that rejected Abbott and the command and control of his chief of staff haven’t forgotten or forgiven.
Abbott’s rush into print last weekend to defend his legacy was a piece of delusional pre-emption. He even described the politically disastrous 2014 budget as something he “wears as a badge of honour”. If there’s one thing Turnbull has learnt from the leader he rolled, it is that you can’t win support for reforms if you quarantine your rich mates from the pain.
The prime minister went out of his way in parliament to make the point that fairness “is an absolutely critical element in any tax policy”. A government for an “egalitarian nation” would look at arrangements that have accrued over time that are either unaffordable or, worse, skewed to those at the top end of the income scale. Those Liberals urging the status quo are either too blinkered or too self-interested to appreciate this. As Scott Morrison explained to his colleagues, tax increases or shaving concessions were needed if they wanted to cut income taxes. “Very few options are left,” he said. As treasurer, he was “dancing on top of a pinhead.”
To ram home the point, the government reminded journalists that Abbott’s party room advice had a very hollow ring to it. “Downright hypocritical,” was the verdict of one angry minister. To help pay for tax cuts, including the abolition of the carbon tax, Abbott and Hockey put through $20 billion in tax increases. This included indexing petrol excise again, the income tax deficit levy and the backpackers’ tax. The senate kindly passed all these imposts, but also blocked “unfair” savings such as the Medicare co-payment.
Far from ruling out touching superannuation, capital gains tax or property investment writeoffs, they are very much in play. Morrison may have moved from saying there were “excesses” in negative gearing to now describing them as investor “enthusiasms” that nonetheless need addressing, but he says they relate to distribution on how people engage in negative gearing and seems to suggest a $50,000 cap for writeoffs.
Government advisers say the prime minister is very aware that to achieve reform the Liberals’ wealthier base will have to play its part. This has broad support in the Coalition. Nationals senator Bridget McKenzie is well aware her party represents the nation’s lowest-income electorates: fairness doesn’t mean hitting her party’s constituents the hardest. But she, like others, wants the prime minister and treasurer to give them a package that they can “chew on”.
She will have to wait till next month. The prime minister, making a virtue of necessity, insists the government is being “measured” and won’t be “reckless” like the Labor Party. Labor, of course, was able to steal a march because it was working on its policy – which has won plaudits from respected economists – for a year. Turnbull and Morrison virtually had to start from scratch six months ago.
The pincer movement that Turnbull has been caught in since his party room coup was even more in evidence this week. One arm of the manoeuvre, the Labor opposition, is merely doing its job. Releasing policies and unveiling eye-catching candidates such as Linda Burney. She’s NSW Labor’s deputy leader in Sydney and on track to be the first Aboriginal woman in the house of representatives. That was matched by engineering Pat Dodson, the “father of reconciliation”, to replace West Australian senator Joe Bullock. Bill Shorten leaned on the left and right unions in Perth to endorse his captain’s pick.
The other side of the pincer is possibly more dangerous. It’s within the prime minister’s own party. The day after Abbott’s party room lunge, he was extensively quoted in an exclusive in The Australian. A highly sensitive national security committee of cabinet planning document was leaked to one of the former prime minister’s best mates, Greg Sheridan. It accused Turnbull of pushing back by at least a decade Abbott and Kevin Andrews’ timetable for the production of new submarines.
The Australian Federal Police have been asked to investigate this breach of security. Sheridan denies his leaker is Abbott, but that’s a sideshow compared with the quotes in the story. “I am not just disappointed, I’m flabbergasted at this decision,” Abbott said, then went on to fire another bazooka at his successor’s credibility on national security: “This is vital for the defence of the nation, it is vital for our national self-respect, it is vital for our national security.”
Turnbull was far from amused. He quoted defence chiefs directly contradicting Abbott’s assertions on the timing and the vulnerability of the nation as a result. He said the Collins-class submarines can feasibly and practically have their service extended.
Just as unhelpful to Turnbull was another of his predecessors. John Howard twice put raising the GST back on the table this week. He told Sky Agenda it would make a comeback while on the ABC’s 7.30 he said there’s a case for broadening the base or raising the rate. He said the timing was up to Turnbull. Thank you very much was the reaction in the Labor camp.
As all this plays out the election clock keeps ticking down. According to independent polling analyst Andrew Catsaras, the average of the latest batch of polls shows a definite tightening in the past two weeks. He now puts the state of play, 51–49 per cent two-party preferred. That’s the closest it’s been since Turnbull took over as leader.
The Greens have resisted intense pressure from Labor to delay senate voting reform. They have announced a new optional preferential system will have a start date of July 1.
Just in time for a July 2 double dissolution election. You can put your money on it.