Libs to play the imitation game in budget 2016

In matching or co-opting some of Labor’s initiatives in the budget, the Government will hope to neutralise the Opposition’s attack and clear the battlefield of all but the key points of differentiation before the election.

When Treasurer Scott Morrison delivers his first budget tomorrow night, he will tell the people of Australia that the measures contained therein are all about jobs and growth.

But as is often the case with politicians, the Treasurer will be telling only half the story.

The Turnbull/Morrison budget will be focused not only on the economy but also on the election, and therefore will also be about neutralising Labor’s most threatening policy initiatives.

We won’t know until election day whether Opposition leader Bill Shorten and the Labor Party were brilliant or foolish when they decided to release a small number of signature policies courageously early in the electoral cycle. The election result will determine our retrospective assessment of that strategy.

Not since Liberal leader John Hewson released the longest political suicide note in history, the 600 page Fightback policy manifesto, has an opposition been prepared to risk showing its hand so far out from an election.

Conventional thinking suggests the long lead-time simply gives the Government one of two free kicks – either an extended period in which to criticise any policies that have been announced early, or the option of stealing them altogether.

Nevertheless, Shorten and his strategy team decided to throw caution to the wind, releasing Labor’s first post Rudd/Gillard policy 18 months before the next election was due.

That was the policy to crack down on tax avoidance by multinational corporations, which is now supported by the vast majority of voters. The following month, Labor broadened its scope from fat-cat corporates to cashed-up retirees, announcing plans to cut tax concessions for wealthy superannuantsThis has also become a popular policy.

Labor now has almost two dozen “positive policies” listed on its party website. Unsurprisingly, the list is dominated by education initiatives, given that policy area is a traditional strength for Labor. There also appears to be residual good will in the community, if not necessarily for the Gillard government’s Gonski reforms, then at least to increase education funding.

Other budget measures proposed by Labor that appear to have captured the public’s imagination include proposed changes to negative gearing, and increases to the taxation of tobacco products.

Popular policies such as these pose an electoral risk for the Turnbull Government, a risk that must be neutralised either through co-option or by providing a credible alternative.

One of the biggest points of differentiation has been, until now, on the funding of education. The Government sought to narrow that gap on the weekend by announcing an increase of $1.2 billion to education funding for the final two years of the Gonski package, was well as an additional year.

This move stops Labor from saying the Government has abandoned Gonski, although the Opposition will still be able to point out that it is promising $4.5 billion in extra funding. It will be left to voters to judge which party is more likely to keep its word, and which commitment is more economically responsible.

Both questions will be on the minds of voters after the budget, as we commence the long walk to an election on July 2: “Can we afford this policy?” and “Who do I trust to run the economy?”

Treasurer Morrison has done his best to establish that frame of thinking, saying on the weekend that now is not the time for “throwing money around”. The PM has also done his bit, saying we must “live within our means”.

The Coalition’s decision not to tamper with negative gearing clears the way for it to depict Labor’s reforms as a tax increase rather than a housing affordability issue.

Granted, neither admonition seems to have applied to the recent awarding of a $50 billion submarine contract to the French, but that will be of little concern to the voters in South Australia who have been concerned about their job prospects in that beleaguered state.

The Government also appears likely to steal a couple of Labor’s initiatives, firstly the tobacco excise increase, and cuts to superannuation perks for wealthy retirees.

Morrison confirmed on the weekend that the budget will include measures to “better target the concessions” in superannuation, while some leaks to the media have suggested the Government has decided to up the ante on this point, lowering the threshold even further than the Opposition to minimise those getting an enhanced tax benefit.

It has also been recently suggested the Government will announce a crackdown on the tax minimisation/evasion tactics of multinational corporations, emulating the spirit of Labor’s policy, if not the detail.

In matching or co-opting some of Labor’s initiatives in tomorrow’s budget, the Government hopes to reduce the number of fronts on which it has to defend itself from Labor and clear the battlefield of all but the key points of differentiation.

One of those contrasts will be tax, which the Government plans to make a proxy for economic management. The Treasurer said on the weekend that the budget was configured to ensure the overall tax burden will not rise, and that the Government would save more than it spent over the forward estimates to reduce the deficit.

Accordingly, Labor will be depicted as the spendthrift, irresponsibly ratcheting up taxes but still spending more than it earns. The Coalition’s decision not to tamper with negative gearing clears the way for it to depict Labor’s reforms as a tax increase rather than a housing affordability issue.

This will be a compelling argument for voters still disposed to the view that Labor cannot be trusted with the keys to the Treasury coffers. The Ipsos poll found just a few weeks ago that only 25 per cent of voters said they believed Labor had the best policies for managing the economy, while 43 per cent nominated the Coalition.

We will likely see in Bill Shorten’s budget reply later this week how Labor intends to deal with that perception deficiency.

And then voters will be off to the polls. When July 2 finally arrives, it will be time to cast judgement on Labor’s go-early strategy, the Government’s neutralisation tactics, and the policies being offered by both parties. Even so, the final decision could rest on which party voters distrust the least.

Author: Drag0nista

Political columnist at The New Daily | Editor of Despatches & AusVotes 2019 | Author of On Merit, a book on the Liberals' *women problem*. Former Liberal staffer and industry lobbyist. Studying the entrails of federal politics since 1989.

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