Leash the PUP and deal direct with Labor

Instead of making empty threats in an attempt to arrest its ill-fated budget, the Government could negotiate with Labor to see some measures passed while also neutralising the Palmer problem.

It’s hard not to get the sense the Abbott Government’s budget strategy is spiralling out of control.

Finance Minister Mathias Cormann insisted repeatedly yesterday in a television interview that he and his colleagues were “working in an orderly and methodical fashion” to implement the budget. Yet one only had to listen closely to pick up the quiet keen of panic underlying his rushed and automated responses to see that even Cormann does not believe his own lines.

The Minister’s weekend television appearance was in stark contrast to his interventions last week, when he had to mop up after Treasurer Joe Hockey’s unfortunate comment about poor people not driving cars.

Cormann was assured and confident at the time, dismissing Labor’s clunky allusions to the budget having more reboots than a Macintosh or Commodore 64.

He wrested back control of the budget debate, pointing out that “no government in recent political history had passed all of its budget measures through both houses of Parliament by the end of August”, and that “a number of the measures that are the subject of the most intensive post-budget debate are not due to take effect for some time”, which left ample time to keep engaging with the Senate crossbenchers.

This was necessary because voters not only think of the budget as unfair, they perceive the Government as having lost control of its implementation.

Coalition strategists would see the latter as far more troubling because the Government can ride through, or if necessary change, a tough budget but it is much harder to cast off the burden of perceived incompetence. Just ask members of the former Gillard government.

And yet yesterday, just one week later, Cormann had been reduced to the same gibbering mess as his Government colleagues, rapidly reeling off numbers, acronyms and other econo-babble and attacking Labor instead of reminding voters what “orderly and methodical” is supposed to look like:

If we stay on a spending growth trajectory that takes us to 26.5 per cent of the share of GDP, when tax revenue on average over the last 20 years was 22.4 per cent of the share of GDP and you don’t want to balance the books by reducing spending, then the only alternative to balance the books is to increase taxes.

The Finance Minister may be correct, but such an “explanation” would have caused most voters’ eyes to glaze over rather than win Cormann any new-found support or respect.

Cormann’s interview was an unfortunate conclusion to the five-week parliamentary break in which the Government was meant to consult and ideally negotiate with the crossbench on the more contentious elements of the budget.

Instead of doing this in a low-key fashion, the Government chose to accompany the negotiations with ham-fisted threats in the media, deploying an artillery of dud firecrackers in an attempt to soften-up the belligerent Senators.

Hockey’s threat to re-introduce legislation on asset recycling/privatisation as an appropriation bill, only gave Clive Palmer a free kick with a headline on being prepared to block supply.

Education Minister Christopher Pyne’s “speculation” that he may have to cut university research funding if the Government’s reforms to university fees are not accepted, will have gone down as well with Senators as his comment that university students are being asked to pay an additional 10 per cent of their course cost, not “donate their left kidney”.

And now tax increases are being threatened as the way of repairing the budget, which in itself is nonsensical and empty: if the Government can’t get any of its existing tough measures passed, how does it intend to get tax hikes through the same intransigent Senate? It’s certainly not the policy an unpopular Government would take to the next election either.

Very little seems to have been gained from all this tough talk. Palmer said a week ago that his Senators would not support the GP co-payment or the changes to university fees, although he has been known in the recent past to simply change his mind when presented with more information. It would seem this variability is the constant upon which the Government is depending.

Judging from the previous sitting of the new Senate, Palmer will deliver in spades his very own brand of parliamentary unpredictability and its attendant drama. His political viability and that of his party depends upon it.

And yet, there is another path that Abbott could take to dispel the sense of chaos that pervades the budget and his Government.

Instead of making empty threats in an attempt to arrest its ill-fated budget, the Government could make better use of its time working out which is the greater threat to its political survival. Labor may compete with the Coalition for the swinging vote, but Palmer and PUP are stealing the Coalition’s base.

On this measure, Labor is clearly the lesser evil and ironically the means by which Abbott could regain control of his careening budget.

By negotiating with Labor, the Prime Minister could secure Senate passage of mutually agreeable legislation. This would of course require some eating of humble pie and incorporation perhaps of uncomfortable changes into Government policies. It would also give the main opposition parties some brownie points in the eyes of voters.

But such an approach would completely neutralise Palmer. It would negate his balance of power position and relegate his media stunts to irrelevancy. Most importantly it would rob the renegade MP of the kudos and increased support he gets every time he makes life difficult for Abbott.

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