03 May 2016
by Urban Wronski

About Scott Morrison, and a Budget preview.

Scott and Mal and the red teapot

Scott Morrison does not enjoy the trust of his leader or his nation. Malcolm Turnbull put his finger on his distrust of his Treasurer when he said Morrison “knew of the plan to bring the budget forward by a week to May 3, but that he was not part of the inner circle.”

A successful treasurer cannot be excluded; a wallflower in his own party’s dance to the music of time. If your boss won’t even trust you with the budget’s date, why should the nation trust you with any other budget details?

Then there are Morrison’s performance issues. When the Abbott cabinet leaked like a sieve, Morrison was the prime suspect. Morrison as Treasurer has underwhelmed with his tenuous grasp of economic essentials. He has flip-flopped over championing individual tax cuts to the need to cut middle income earners’ taxes to defray bracket creep. One moment it has been GST, the next the imperative to cut company tax.

Morrison does not exude mastery. He talks of tax cuts for business as creating a growth dividend, a new phrase for the long-discredited myth that wealth will trickle-down. He appears out of sync with his Prime Minister. He refuses to admit that the government has a revenue problem when the evidence points to declining tax receipts. There is good reason to suppose that he owes his position as Treasurer more to Turnbull’s need to keep an eye on him than his abilities.

Then there’s credibility. Morrison’s previous two portfolios did not build his reputation for integrity or accountability.

When twenty-three year old Reza Barati was bashed to death on Manus Island on 17 February 2014 a week elapsed before Morrison would concede that his story that Barati was outside the fences was wrong. It later transpired that he had known the truth from the outset. But Morrison has ventured no apology.

Two of Barati’s assailants will receive five years in prison for his murder but there has been no move by Morrison in apology or for compensation to the young man’s family. Julian Burnside has described Morrison’s regime as callous.

Morrison sought to depersonalise and criminalise asylum seekers by instituting the phrase illegal maritime arrivals.

Not only is asylum seeking entirely legal according to the UN, Morrison’s language was calculated to further dehumanise and desensitise us to the barbaric cruelty of indefinite detention, a trend he extended by adding Border Protection to the Immigration Department’s name.

Protection implies threat. Australia has never been at threat from asylum seekers or refugees but it suited Morrison’s career to represent it thus. Mr Morrison also developed the punitive culture of detention which would torture and break men and women so that some would take their own lives, a calculated cruelty that he upheld as a deterrent.

Recently a twenty-three year old Iranian man, Omid Masoumali, committed suicide when he was told he could expect to be on Manus at least another ten years. A Somali woman has recently set fire to herself, an action condemned by the government of Nauru as a ‘dreadful act.’

Despite its claims, the Abbott government didn’t stop the boats. It was Kevin Rudd in July 2013 who introduced offshore detention as a stop gap in a regional solution which has never eventuated, in a cynical ploy to get Abbott’s opposition off his back. Yet Morrison made no real move towards a more permanent regional solution. After nearly three years one refugee is left In Cambodia, a sole witness to his ludicrously expensive $55 million ‘solution.’

Morrison showed a ruthless pragmatism as border supremo and an arrogance and an almost fanatical refusal to answer questions in the absurd assumption that any information would encourage people smugglers. Later he used the phrase operational matters which implied we were at war with asylum seekers. In none of this did he betray a hint of the stability of character, the balance and breadth of perspective that might be expected of a future treasurer.

Besides putting immigration on a military footing. Morrison spent millions on orange fibreglass sea-craft into which he decanted refugees from Sri Lanka returning them with enough fuel to get them back to certain persecution, a move Tony Abbott boasted about in a recent Quadrant essay as boldly unconstrained by human rights considerations.

Morrison remains a pragmatist and a populist, at least in rhetoric. Despite Turnbull’s aversion to slogans, his treasurer is addicted to them, making his grasp of key issues appear two dimensional, simplistic. Like his previous prime minister, Morrison is keen to avoid nuance and complexity. He talks of backing in the tax payer who’s having a go or even a red hot go.

Being Federal Treasurer is not about picking winners. His talk of backing those who are out there earning or his disparaging comments about the numbers of Australians who receive welfare exposes him to the suspicion that he is divisive; determined simply to make it easier for those with money to hang on to it.

To Morrison, the Tea Party tax populist, welfare payments are a burden. He relays a Tea Party delusion that taxes are a burden rather than a social responsibility.

Now he wants to lower taxes for those on incomes over $80, 000, despite his earlier claim that he had no ‘fiscal headroom.’ Or that the budget couldn’t afford it. This is a wilful distortion of reality as is his comment that spending on education is unsustainable. Given Australia’s relative wealth as a nation we can afford whatever standard we aspire to. What he means when he says unsustainable, says economist Richard Dennis, is jargon for he doesn’t want to.

Morrison is even willing to pretend that $80,000 an average salary in Australia when the ATO can tell you it’s way too high, especially for female workers. Peter Martin points out that the average wage is $60,000 and that most Australians don’t get close to $80, 000. Only a quarter earn over that amount. Quickly his pre-budget comments show an ignorance or a wilful deceit on what the average wage in Australia is, whatever they imply about his lack of fairness.

Morrison’s budget income tax cuts will be unavailable to eighty per cent of workers in Tasmania. But his aim is not to support the average Australian, despite the rhetoric. He wants to lower company taxes, claiming this will boost productivity yet there is not a reputable economist in the land who will support the belief that making the rich richer somehow creates jobs or trickles down into increased prosperity for all.

In fact that increased wealth just trickles up. He may call it a productivity dividend until the Kidman cows come home. Spare us the jargon. He is simply looking after the rich.

With dividend imputation that most Australian companies pay far less than 28% in tax. Morrison must know this. You only have to read a little history to see that when John Howard reduced company tax, there was no boost in productivity. Yet his Budget will set out a table of how company tax will be cut and continue to decrease in stages in future years.

His backers may be happy but the nation as a whole won’t thank him for widening the gap between rich and poor. Clearly, along with Joe Hockey he sees Australians as lifters and leaners; winners and losers. Already Labor is calling it an unfair budget, a charge which has every chance of creating considerable electoral damage.

Morrison is keen to portray his government as not a tax and spend government but his own MYEFO puts the lie to his mantra. Bernard Keane offers a neat summary of the real facts:

As a proportion of GDP, the tax burden on the economy has risen from 21.5% of GDP in the last full year of Labor to 22.3% this year and is planned to be over 23% in 2018-19 — putting the Commonwealth tax take at $113 billion more than the final year of Labor. Morrison plans to be the highest-taxing treasurer since Peter Costello sucked 24% of GDP out in taxes before the financial crisis.

Morrison’s government is a reckless spender. This year, spending will be 25.9% of GDP, higher than it was in 2014-15 (25.6%) while Labor’s last full year was significantly lower at 24.1%.

If his words on taxing and spending are false, Morrison is also keen to create an illusion of economic transition. The economy is transitioning is his mantra. You couldn’t trust Labor to minister to a transitioning economy. Yet it is all bogus. He can’t produce a skerrick of evidence that any sector of the Australian economy is remotely ready to take over mining’s lead. It’s all windy wishful thinking and endless, desperate repetition.

Morrison repeats his hollow claim as if there’s some soft landing after the collapse of the mining boom instead of a rude shock. He pretends to be nurturing an economic recovery when in fact his government’s ideological NeoCon decisions are helping us towards recession.

The Abbott Turnbull government has sacked 16, 500 public servants, closed the car industry, buggered investment in renewable energy industries, left industries such as Ardmona to be rescued by the Victorian government state. Steelmaker Arrium is about to collapse, threatening 7000 jobs nationally, 1000 in Whyalla S.A. alone, but it has offered nothing to save workers’ jobs. Instead, it has allowed the banks to put in their own administrator.

Now the news is that Turnbull has broken his government’s promise to halt public service cuts or productivity dividends. A further $1.2 billion, will be announced in the Budget, will be ripped out of the APS to fund the cuts it will offer to those earning over $80,000 a year to offset bracket creep already marginal in times of low inflation and record lows in wage growth.

Morrison may show charts and graphs about his Budget but he will never convey the effect of those public service job losses in terms of lives wrecked, careers destroyed and the flow-on effects on local communities of moving families from salaries to Newstart allowances.

Not all of them can hope to find employment in the contract positions which will pop up to do the work which under-staffed demoralised and depleted government departments can no longer manage. He will not produce a chart which shows the cost of hiring contract staff to do the work of those who have been sacked in the name of savings. Private contractors will continue to do well out of a Liberal government.

But it’s not really about savings. The Liberal government continues to pay $5 billion a year to subsidise multinational mining companies. Dividend imputation, introduced by Peter Costello, profits rich investors from the top 2 % and costs the tax payer $5 billion a year according to the Australia Institute’s most recent report. Here’s two savings we won’t see in Morrison’s budget. Yet he is obsessed with the mantra that he has an expenditure and not a revenue problem.

One trillion dollars is to go on Defence spending over the next twenty years, money that despite his rhetoric will go largely into the pockets of overseas corporations supplying specialist equipment. Yet even one trillion will not buy security. No-one in Defence or elsewhere in government or society believes we are likely to be attacked; none believe we could ever defend ourselves if we were. It’s all about the politics of looking strong on security while saving Liberal seats.

Subsidies and protectionism are OK when it comes to building submarines in South Australia; when it hopes they’ll win you votes but $50 billion looks like reckless spending when at best it is likely to net the government two seats and one of these is Jamie Briggs’ seat of Mayo.

The fact is that we are not transitioning. The only reason we are not in recession is because there’s still a flicker left in mining and because the property market in Sydney and Melbourne still chugs along thanks to foreign investment and the speculative activity of those who take advantage of the negative gearing and capital gains discounts the party introduced in Howard’s era.

Morrison is not averse to using bogus authorities. No-one believes BIS Shrapnel’s dire predictions about negative gearing, not even BIS Shrapnel who refuse to say who did the modelling behind that but who admit it was done before Labor’s policy was released. The Grattan Institute calls the report ‘manifestly ridiculous.’ Yet Morrison made great play of it in parliament and in radio interviews subsequently. It has done his credibility no good.

The same goes with his talking up your budget for months. Everything was on the table so long, it looked like neither Treasurer nor his Prime Minister could make a decision. Until others made it for them.

A rabid union-basher, Morrison has shown the nation that he can’t keep anything on the table without permission from your IPA, BCA and other top end of town backers. Whatever he put up, vested mining, business and banking interests made him remove from the menu. He has ended up looking weak; beholden to his powerful, ruthless mates.

Morrison runs off at the mouth. Australians know that the more technical terms you use, the less you really understand. Budgets are about communicating with ordinary people. They are not an excuse for you to name-drop economic terms such as ‘over the forward estimates’ when their treasurer could simply say “over the next four years.” Yet Morrison it seems craves the power of jargon.

Despite what he may think, jargon doesn’t help him shore up his claims to authority or expertise. Rather it exposes his flimsy purchase on his portfolio, as well as his credibility.

Let’s cut the slogans and the mind-numbing Treasury-speak. Let’s stop all the pretending. Drop the lies, the half-truths, the myths and the empty generalisations. Let’s drop phrases like growing the economy, too. The economy is not a wheat crop. Nor is it growing. The government’s austerity measures have not promoted growth.

So what will be in Morrison’s unfair budget? Five key elements are guaranteed.

Tax: Liberal backers won’t let Morrison make any real tax reforms but he needs to pay them back with company tax cuts they don’t need and income tax cuts for high earners which come at the cost of an effective public service.

He refuses to admit that he has a revenue problem so he’ll make some more cuts to expenditure that will ultimately dampen economic activity. His IPA pals will be distressed that he hasn’t gone far enough.

Roads to nowhere: He’ll pretend to be hugely investing in infrastructure – any infrastructure. No-one will be too clear that it’s the infrastructure we really need or how you intend to pay for it. How much will be new funding or recycled from a year ago is anyone’s guess. Of course he won’t be actually be spending any money but he will be guaranteeing loans. If you can attract investment.

Education and Health: will get less than either needs with much empty rhetoric about money not being the key to quality and hollow promises about keeping teachers up to the mark. He will break his government’s election promise to match Gonski dollar for dollar. Well, Gonski was about redressing inequality anyway.

With a great hoo-ha he will recycle the announcement of an extra $2.9 billion for the states to fund hospitals over the years to 2020. States accepted the money during the Council of Australian Governments meeting in Canberra a month ago. He will hope nobody notices that this only partly makes up for Tony Abbott’s cutting $7 billion from hospitals.

Banks: ASIC which he reckons is better than a Royal Commission and which has let the banks do exactly as they please will get $127 million which is almost as much as Abbott and Hockey stripped out of its budget. This money will equip them to go after the banks.

Verdict: Rather than be an election winner, or some type of manifesto, the budget’s manifest unfairness could help accelerate its growing unpopularity. The consensus will be that Morrison has generally wasted everybody’s time, upset the left who, bless them, still value fairness and justice, while disappointing the right who want more austerity just as long as it is not applied to them.

If his government is re-elected by a small majority, Morrison, hated by the Abbott faction and mistrusted by the Turnbull may find himself out of the hunt for a portfolio in the next Liberal government. Still it’s better than being called before The Hague.