Whether or not the Prime Minister intended it to be the outcome of his income tax folly with the states last week, Malcolm Turnbull now appears to be using the premiers’ refusal to raise their own taxes to turn Labor’s greatest strength into a liability.
Education, health, jobs and the economy are traditionally the principal issues that influence the way people vote. Labor is considered to be superior on schools and hospitals, while the Coalition has the edge when it comes to economic management.
This latter point is borne out by last month’s Ipsos poll, in which 43 per cent of respondents thought the Coalition had the best policies for managing the economy, while only 25 per cent nominated Labor.
However, in a worrying sign for the Government, health appears to have eclipsed economic management for the first time as one of the three most important issues voters said would influence the way they vote at a federal election.
According to an Essential Poll taken last month, 43 per cent of respondents said “ensuring the quality of Australia’s health system” would decide their vote, while 37 per cent said “management of the economy” would influence theirs.
This means the Government has to sharpen its sales pitch on health and hospitals, or blunt that of the Opposition.
Opinions vary as to whether the PM genuinely offered state and territory governments the chance to levy their own income tax at the COAG meeting on Friday.
Turnbull certainly made the most of their subsequent refusal, telling journalists on the weekend the states had no credibility because they knocked back the opportunity and that “if they’re not prepared to make the case to their citizens through their parliament for higher taxes, they cannot seriously or credibly ask us to raise taxes to give money for them to spend”.
According to the PM, “if the states are not prepared to take responsibility for raising more of the money they spend, then what that means is we must live within our means.”
These comments are an attempt by the PM to drag the goalposts from one field to another, recasting health and education spending as a measure of good economic management.
In case we missed this point, the PM emphasised it on the weekend, claiming the states’ actions provided a “great and revealing moment of clarity” that exposed the Gillard government’s commitment to provide $80 billion in future funding for health and education as a “fantasy” because the budget deficit proved “the money was never there”.
Turnbull’s approach is therefore not only an effort to shrug off Labor’s claim that the Government’s refusal to commit to the $80 billion expenditure is a material cut in health and education spending, but also to paint the Opposition’s recommitment to the measure as economic vandalism.
The tactic comes straight from the playbook of one K. Rudd who managed to turn years of well-received government handouts against PM John Howard by declaring at Labor’s 2007 election campaign launch that “this reckless spending must stop!”
It was counterintuitive if not risky for a leader from the party of Gough Whitlam to denounce excessive government spending, but Rudd’s admonition struck a chord with the public in a way that ultimately turned the tables on Howard.
Of course, parsimony was only a passing phase for Rudd, who went on to embrace Howard’s spendthrift ways in an effort to fend off the global finance crisis.
And it is likely Rudd lifted the idea from Howard, who audaciously campaigned against Labor’s Mark Latham with the counterintuitive “who do you trust?” on economic management despite having taken on water in the children overboard affair.
Now Turnbull is trying this crazy-brave approach. If the PM can successfully neutralise Labor’s natural advantage on health and education he can potentially reduce voter’s election choice to “who is best placed to pay for their promises without hurting me or the economy?”
Then it will come down to the Coalition’s spending cuts versus Labor’s higher taxes.
The premiers’ decision last week plays into that dynamic, allowing the PM to emphasise his Government’s belief that the federal tax burden is already high and its unwillingness to increase its net tax take.
Turnbull told the media after the COAG meeting on Friday: “We are determined to … use the resources we have more efficiently. And we believe all levels of Government can do that… The focus should be on outcomes, not … harking back to unfunded promises that were made years ago.”
The PM further developed the point yesterday, fending off a question about Tony Abbott’s behaviour to emphasise that voters would choose between himself and Bill Shorten on polling day.
“The choice is between a government which has an economic plan for growth, for investment, for innovation, for greater productivity, stronger competition for open markets, for better jobs,” Turnbull said.
The alternative, according to the PM, was a “Labor Party that wants to defend the shocking industrial lawlessness in the construction sector … increase taxes on investment … stand in the path of entrepreneurship and … run up more and more debt to fund $50 billion of unfunded promises.”
This is an oddly conventional line for an unconventional plan of attack. And it will fail if voters decide they want quality health and education systems, regardless of the cost.