Abbott navigates his crucial “year of reform”


While it’s true that a week is a long time in politics, and politicians’ careers can be made or unmade in the course of a day, there are still some things in the political domain that tend to follow the same pattern over the years.

One such thing is the cyclical approach taken by governments, particularly those that are new, to what should be done over the course of an electoral term.

Traditionally the first year is when exclamations are made about budget black holes, the other side’s profligacy and the need for “tough decisions” to be made. This is the best window for implementing such decisions, thereby giving time for voters’ memories to fade before the next election.

The mid-term period is for developing and implementing the government’s new policy initiatives. Any contentious matters should be dealt with well before the final 12 months of the electoral term, leaving that year for the government to hand out goodies at the pre-election budget and focus on the re-election campaign.

The Abbott Government has adopted this approach, as did the Howard and Rudd-Gillard governments before it. In fact, the first Howard government budget is considered to have been tougher than the one handed down by Treasurer Joe Hockey last year, although certainly not as unfair.

This strategy becomes difficult when governments have only three-year terms, leaving only 12 months or so to undertake policy reform. That’s not a lot of time to research, consult, negotiate and formulate draft legislation, let alone get it through the parliament.

We saw this with key policies implemented by the Rudd-Gillard Labor governments, such as the National Disability Insurance Scheme and the Gonski education reforms. Both were initiated during Labor’s first term under Rudd but not implemented until the second term under Gillard.

Perhaps the need to have more than one term to put policies in place is why voters have traditionally been disinclined to toss out first-term governments. That of course assumes voters support an incumbent government’s policy agenda.

The Abbott Government is now well into its mid-term, and is receiving considerable pressure from corporate and other business sectors to reform taxation and workplace relations laws. However, these are not reforms the broader Australian community necessarily supports, and it doesn’t seem likely the Government will be able to convincingly explain them to a public already made cautious and sceptical by last year’s budget.

Until now, Abbott’s reform plans have assumed his government would be given at least two electoral terms. The PM has consistently stated that following inquiries into taxation and workplace relations laws, and public discussion of the issues, he would take any proposals about changing the GST or labour laws to the 2016 election.

In fact, Abbott may even be depending on this plan to revive his flagging leadership. It has become folklore in Liberal circles that PM Howard revitalised his electoral standing in 1997 with his “bold” tax reform strategy, which delivered victory at the 1998 election. Others argue the GST almost lost Howard the election.

Granted, business and welfare groups were both calling for taxation to be reformed then, as they are now, but it was a huge risk for Howard to take a new tax (albeit one that replaced 10 others) to an election. Abbott may think he can emulate this feat but he should keep in mind that taxation reform (and a possibly expanded GST) is not the only policy minefield he is trying to navigate during this mid-term period.

Abbott is also trying to meet demands for workplace relations reform from a business community grown impatient and frustrated by the previous Labor government’s dismantling of Howard’s WorkChoices: a policy reform, it should be remembered, that Rudd and the union movement used to bring Howard down in 2007.

Taxation, workplace relations, and also the nature of our federation – these are the complex and fraught policy reform agendas PM Abbott is attempting to wrangle – within the confines of this mid-term period, which for all intents concludes at the end of 2015. Meantime, Abbott is also trying to draw a line under the previous, tainted budget while positioning the upcoming budget as being about jobs and families.

Aside from its evident lack of humanity, the biggest flaw in last year’s budget was that it tried to do too much, too fast. Abbott’s policy reform agenda is similarly defective. The PM has only this year to get his policy reforms under way, but he mustn’t lose sight of the need to get re-elected in order to implement them.

In pursuing what are likely to be major reforms on both the taxation and workplace relations fronts, Abbott is inviting his opponents to run a double-barrelled scare campaign against him. The 2007 federal election as well as recent state elections in Victoria and Queensland show how formidable Labor can be when it campaigns closely in association with the labour movement. The next federal election will be no different.

Howard almost lost, or only just managed to win, his second term of government by taking a new tax to the election. He lost his final election thanks to a masterful campaign by Labor against his workplace relations reforms.

If Abbott takes proposals to expand the GST and change workplace relations laws to the next election, he will be combining the electoral risks that Howard chose to face individually at two separate elections. Abbott would be crazy-brave, bordering on foolish, to think he could win an election proposing both.

2 thoughts on “Abbott navigates his crucial “year of reform”

  1. A rise in the GST would be the fairest way to raise more tax. The truth is of course political suicide. Australians will not vote for politicians who tell the truth so they keep getting PM who stumble about looking for ways of setting groups against each other in ways that will cost them the least votes. Its amazing how quickly Australians begin to hate whoever is in power. Are modern democracies ungovernable?

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