The battle for trust begins – Round 1: the budget

The party that proves the best at juggling economic prowess with fairness will enjoy almost certain electoral victory.

The party that proves the best at juggling economic prowess with fairness will enjoy almost certain electoral victory. The Coalition faces its first test next week.

Weekly column for The Drum.

Lettuce rejoice: Shorten finds new cause for hope

The Political Weekly: The Opposition Leader found a new way to help boost flagging poll ratings, but unforeseen circumstances threatened to derail his progress.

The Political Weekly: The Opposition Leader found a new way to help boost flagging poll ratings, but unforeseen circumstances threatened to derail his progress.

For The New Daily.

Jamie Clements saga: The politics of sexual harassment a bipartisan affair

Sexism and other forms of disrespect against women can only be eradicated if all our community leaders, including the two at the top, actively repudiate those behaviours.

Sexism and other forms of disrespect against women can only be eradicated if all our community leaders, including the two at the top, actively repudiate those behaviours.

Drum_newFor The Drum.

Turnbull Government looks shaky on its trainer-wheels.

The Political Weekly: The Government’s budget update was an amateur affair.

The Political Weekly: The Government’s budget update was an amateur affair.

For The New Daily.

Voters treated like goldfish

If the past week in politics is any indication, politicians have no idea whether voters pay attention to politics.

Are we the political equivalent of goldfish, needing to be constantly reminded about what is good and bad about politicians and their policies? Or are we more like elephants, never forgetting the vices and virtues of the passing political parade?

The Political Weekly: If the past week in politics is any indication, politicians have no idea whether voters pay attention to politics. Are we the political equivalent of goldfish, needing to be constantly reminded about what is good and bad about politicians and their policies? Or are we more like elephants, never forgetting the vices and virtues of the passing political parade?

For The New Daily.

Shorten’s union troubles aren’t over yet

The royal commission into union corruption may have cleared Bill Shorten, but the Labor leader is still facing pressure over his party’s union links and in many ways his job has just been made harder.

Late last Friday the royal commission into union corruption quietly slipped out a media release, essentially declaring it had given up the chase on Labor leader Bill Shorten.

The statement advised that, following the examination of Shorten’s former union, the inquiry’s counsel believed a number of AWU officials may have had a conflict of interest when “causing the union to enter into lucrative side deals that were not disclosed to the members”.

There was however “no submission that Mr Bill Shorten may have engaged in any criminal or unlawful conduct.” Unsurprisingly, Shorten and Labor moved swiftly to depict the Labor leader as vindicated by the announcement.

However, it would be a mistake to see the union royal commission’s waving of the white flag as taking the pressure off Shorten. In fact, it effectively tightens the screws on the Opposition Leader.

Now the TURC dogs have be called off, Shorten is no longer in a position to dismiss the inquiry as simply being Tony Abbott’s very expensive personal vendetta against him and Julia Gillard. With that convenient deflection no longer available (even if true), Shorten has no choice other than to confront the evidence of union thuggery and corruption that has been uncovered.

In short, the Labor leader and his party will face increasing political pressure to deliver on Shorten’s declaration that they have “zero tolerance” for union wrongdoing and corruption.

It’s no coincidence that one of the early political manoeuvres by new Prime Minister Malcolm Turnbull was to call for Shorten to change Labor’s opposition to the Government’s proposal to create a union watchdog and reintroduce the building and construction industry commission.

Calling the “appalling cases” unearthed by TURC “a very sorry tale”, Turnbull pointedly stressed that “anyone who had the interests of the labour movement at heart” should see the royal commission “not as an opportunity for political point scoring but as … a watershed event we should use to clean up the act for the benefit of members”.

In presenting this “test” for the Opposition Leader, the Prime Minister was also gauging the Australian public’s appetite for a political tussle over the need to clean up the unions.

This is partly because Turnbull has a double dissolution trigger at his disposal on the issue – even though he has all but ruled out using it. However, the Government also needs to find a way to counter the union movement’s strong grassroots campaigning capability, which will be rolled out to support Labor at the federal election.

The potential strength of that capability can be seen in seemingly incongruous data that emerged just last month. While the Australian Bureau of Statistics reported that union membership continues to be low, the union-aligned Essential Poll found two thirds of voters still think unions are important “for Australian working people today”.

It’s a little known fact beyond those who closely follow politics that the major parties tend to treat the Australian Senate more as a reward for loyal foot soldiers than a forum for talented community representatives.

Shorten’s challenge is to balance this apparent high public esteem for unions with the need to respond to the troubling findings from TURC. And he must do this while managing the often contentious role of unions within the Labor Party itself.

Like any Labor leader, Shorten owes his position at least in part to the factions that put him there; factions that are loosely arranged according to the unions that make up the party’s membership.

With the help of dominant unions, Shorten kept philosophical divisions to a minimum at Labor’s national conference earlier this year. But the price he paid for such peace was to accede to demands that unions maintain their power over key party decisions such as the preselection of Senate candidates.

It’s a little known fact beyond those who closely follow politics that the major parties tend to treat the Australian Senate more as a reward for loyal foot soldiers than a forum for talented community representatives.

Long-serving unionists, in Labor’s case, or senior office holders in the Coalition parties, almost exclusively populate the upper house along with former political staffers and party apparatchiks from either side.

While no political party has an exclusive right to stupidity, Labor’s union-based factions have made Shorten’s life difficult by demonstrating a lack of political smarts when it comes to exercising their power of Senate preselections.

Echoing the selection of antediluvian Joe Bullock over gay rights advocate Louise Pratt in Western Australian before the last federal election, and an attempt in South Australia to do something similar to Penny Wong, the unions and their factions have a done a deal in Tasmania to relegate the talented (and factionally-unaligned) young shadow minister Lisa Singh to the unwinnable fourth place on Labor’s Senate ticket in that state.

Of the three women only Wong was spared, and then only when senior Labor MP Anthony Albanese threatened to get the original decision overturned by the national executive.

Most recently, Shorten had to deal with unions trying to oust former Labor minister Gary Gray from his seat, an attempt that was apparently abandoned after the now familiar threat of national intervention.

Commenting after the preselection battle smoke cleared, Shorten claimed he supported Gray’s calls for reform of the Labor Party, and that he wanted to give “more voice to rank and file members”.

This ambition unambiguously translates into a reduction of union influence, thereby placing the Opposition Leader in a position where he appears to be acceding to the unions’ demands for their power to be retained (if not increased) while promising the opposite to Labor’s grassroots members.

As a result, Shorten has double trouble when it comes to the unions. Not only is he exposed by his own double-talk on union power within Labor, the Opposition Leader will be under pressure from what is anticipated to be a fresh attempt by the Government to wedge him on union corruption.

Shorten should therefore savour any relief he may feel from being “excused” by the union royal commission. His attempts to be all things to all people when it comes to unions will ensure the reprieve is considerably short-lived.

GST reform: Bill Shorten has a tough decision to make

A popular Prime Minister leading a party praised for its economic management wants to have a national conversation about expanding the GST. This leaves the Opposition Leader in an invidious position.

To paraphrase a certain former prime minister, Australia seems poised to have a conversation it apparently needs to have. This conversation – at least in the Government’s view – will be about convincing voters to accept an increase to the GST.

The weekend tabloids carried a shock, horror story about the Government’s “secret” plans to hike or broaden the nation’s consumption tax.

Except this expose isn’t exactly a revelation, given the Coalition Government has made various attempts since being elected in 2013 to create momentum for tax reform – including changes to the GST – in a way similar to that initiated by former PM John Howard in 1997.

Howard created a national discussion about Australia’s “broken” tax system, and how it could be “fixed” by scrapping a bunch of inefficient taxes and replacing them with just one.

The campaign started with a comprehensive report from a taxation taskforce (similar to the Government’s current tax reform white paper process), followed a year later by a package of initiatives that included the GST as well as personal income tax cuts, increases in the tax-free threshold and pensions, and the scrapping of wholesale sales tax.

Just weeks later, Howard took the GST to an election that he won – but only by the skin of his teeth. Political pundits still disagree about whether the tax helped or hindered Howard’s re-election chances, but in Coalition ranks Howard’s GST campaign is considered to be the gold standard for “visionary” politics.

Also being rather fond of the vision thing, new Prime Minister Malcolm Turnbull is likely keen to try his hand at something similar. Considering an increased or broadened GST could help fix the Government’s current “revenue problem”, it shouldn’t come as a shock if Turnbull is found to be testing the waters of public opinion with his own tentative plan to take an increased GST to the next federal election.

Some of the groundwork has already been done, with former treasurer Joe Hockey having done some early spadework on the state and territory governments, who’ll be the major beneficiaries of any increased GST revenue.

Admittedly, Hockey was not particularly subtle, essentially trying to extort state and territory governments into acquiescence by flagging in the 2014 federal budget that there would be a $80 billion cut to future funding for schools and hospitals by 2024-25.

Yet this manoeuvre had the planned effect, with NSW Liberal Premier Mike Baird holding a “crisis” meeting to discuss the cuts straight after the budget, and then 12 months later leading the charge to increase the GST.

In a video posted on social media in July this year, Baird argued:

We need revenue. I know that’s not popular, I know that’s not something people want to talk about, but unfortunately, we must. And as I look at it, it’s quite clear. The best way of dealing with this is to increase the GST.

Baird’s move was vital, given he was the most popular politician in the country at the time. PM Abbott needed the support of a leader with the stellar levels of political capital and voter trust that Baird possesses (and Abbott lacked) to calm voters feeling anxious about such proposals.

It would be fair to say that now Baird has been joined by an even more popular politician advocating tax reform, there is an even greater chance that an increased GST will be taken to the next election.

Former Howard chief of staff and now Turnbull Minister, Arthur Sinodinos, admitted as much over the weekend when he responded to the Murdoch tabloids’ non-expose.

“If you’re someone like Malcolm” and “want to do something substantial,” Sinodinos said, “you’ve got to do it quickly and upfront and you’ve got to do it when you’re in a capacity to maximise the use of your political capital to sell a story to the Australian people.”

“But,” the Minister warned, “you need their consent, so you have to do it soon in the context of putting stuff to an election rather than seeking to foist something on people before an election.”

This was also important in regaining the trust of the Australian people as a government, Sinodinos said, “because you can’t get on with reform or anything else unless you have their trust.”

Trust will be a factor for Labor too as it reiterates the party’s broad but not unanimous anti-GST stance. It will be considerably tempting for Opposition Leader Bill Shorten to try to emulate former PM Paul Keating’s attack on John Hewson’s GST, former Labor leader Kim Beazley’s denunciation of Howard’s tax, or even Tony Abbott’s “big new tax” campaign against the Gillard Government’s carbon tax.

But Shorten should keep in mind that opinion polls suggest voters are starting to come around to the idea that a GST increase is needed to fix the budget, while only 23 per cent of voters trust Labor the most when it comes to economic management.

The other complicating factor for Shorten is that the Labor state and territory governments need the money.

South Australian ALP Premier Jay Weatherill has expressed frustration with the extended stalemate on the GST, giving conditional support for an increase and saying “somebody has to step up and be honest about the size of the problem and actually be prepared to advance some positive ideas for solving it”.

Weatherill also warned his Labor colleagues not to play politics with the issue, dismissing Bill Shorten’s strident rejection of any GST increase by noting federal Labor was in opposition, “and I don’t have the luxury of just opposing for the sake of it.”

And while the Queensland and Victorian Labor state governments are still sounding hairy-chested in their opposition to any GST increase, a media report today suggests the Queensland Government could be “open to a broader reform package that included a change to the base or rate, provided it did not leave Queenslander’s worse off” and that the Victorian Government would respect the Turnbull Government’s mandate if it won an election with the GST.

This leaves the federal Opposition Leader with an invidious choice.

If PM Turnbull has his way, Australia is about to embark on a grand adventure involving a national conversation and a mutually-agreed way to fix the budget.

However, if Shorten continues his blanket campaign against the GST, he risks further damaging Labor’s already poor economic record. And if he joins the conversation on tax reform and secures wins for lower-income voters who can’t afford the GST increase, he’ll face accusations of enabling the Government as the Democrats did in 1999.