This is a budget for the true (Coalition) believers

The gap between political observers and mainstream voters is never more obvious than during election campaigns and at budget time.

In the lead-up to a budget, political pundits obsess over pet issues and project their reactions onto everyday Australians. Yet most voters’ interaction with the Budget will be little more than a scan of the news on Wednesday to find out if cigarettes are up or family benefits are down.

Much of the rhetoric will simply pass them by, despite Christine Milne’s best efforts to suggest the Budget will contain Tony Abbott’s JuLIAR moment and Bill Shorten’s line about the trust deficit.

These voters’ attention deficit won’t change even if 100 talking-head economists were wheeled out across the different media platforms to intone that Australia really doesn’t have a budget emergency.

This is because these voters still believe the Liberals are better economic managers than the other lot. They believe a changed position (or broken promise) is justified if it’s in the interests of good economic management. And they’ll give Tony Abbott and Joe Hockey the benefit of the doubt until proven otherwise.

The Essential Poll did a good job last week of dissecting this view. The poll found respondents rated Labor as being better than the Liberals in representing the interests of working families, standing up for the middle class, and being more concerned about the interests of working families than those of business.

Yet 40 per cent of the same respondents judged the Liberals to be better at handling the economy overall, compared with 26 per cent for Labor. This has barely changed from the 15-point difference between the two parties when voters were asked who they trusted most to manage the economy just before the election last year.

One of the strongest drivers of Coalition support at the 2013 election was this perception of economic competence. When asked just before the election what would be their main reason for voting for a certain party, 69 per cent of Coalition voters said they would vote Liberal or National because these parties were better at handling the economy.

This focus remains, with 75 per cent of Coalition voters stating last month that economic competence was one of the three most important issues that would decide their vote.

While the Coalition is being jostled by opinion poll turbulence as it exposes potential budget nasties to gauge public reaction, a strong majority of Coalition supporters appear to be nevertheless keeping the faith: only 24 per cent of them see Abbott’s proposed deficit tax as a broken promise, and 61 per cent consider it is more important to reduce the deficit than stick to pre-election promises. This is mostly unchanged from the 62 per cent of Coalition voters who said in December it was reasonable for politicians to change their positions as situations change.

This is in contrast to the people who didn’t vote for the Coalition – they’re protesting loudly about broken promises but essentially preaching to the choir. This was never going to be a Budget that they would support, and the Government is essentially sidelining them from the debate by communicating only with the Coalition heartland.

As long as Abbott and Hockey can continue to convince Coalition supporters that the shared pain is for the good of the economy, they will suffer little long-term damage from the cuts inflicted in this year’s Budget. The real test will be in how Coalition voters choose to measure “good economic management”.

In his long campaign to subvert Julia Gillard, Abbott managed to form a connection in voters’ minds between the rising cost of living and perceived economic mismanagement. These days, while most voters may have little time for the CPI, GDP, current account deficit or cash rate, they’re quick to blame government incompetence for interest rate hikes, utility bill increases and their burgeoning grocery bills.

Cost of living remains the economic issue that most worries voters (56 per cent), with the second highest concern being unemployment (11 per cent).

This could be a problem for Abbott if the Government reintroduces indexation of the fuel excise. Although the increase will mostly be hidden within the ebb and flow of daily petrol pricing, it will also raise the price of any goods that are transported by road and push up the overall cost of living.

In order to neutralise this weakness, the Government appears to be attempting to reframe voters’ measure of economic management from being about the cost of living to being about job creation.

This ties in with Abbott’s strategy of reinvigorating the economy, left languishing by the end of the mining investment boom, with a bonanza of infrastructure projects and associated jobs. By assuaging the 57 per cent of voters concerned about job losses in the next year or so, Abbott hopes to retain the mantle of good economic manager and keep the Coalition voter base loyal.

Abbott and Hockey’s first budget will undoubtedly be the biggest political test either man has faced; it is not, however, the test of truth that their opponents claim it will be. The budget will instead fulfil both men’s promise to Coalition supporters to be superior economic managers. And this oath has pre-eminence over everything else.

Coalition eases us into tough love policies

Given the option, most politicians would prefer to do what the community wants instead of what it needs. But governments that configure their policies to meet only the voter popularity test inevitably will be faced with a humongous bill and the twin terrors of debt and deficit.

The solution to this conundrum is surprisingly straightforward: Simply convince the public to support an otherwise unpopular but necessary government action. While not quite an act of sorcery, this ability to transform public opinion can help a politician or government lead a relatively charmed life. And it is often seen as the measure of a truly effective government.

Kevin Rudd once had the knack, being able to turn public opinion 180 degrees in his favour. His most audacious prestidigitation was as opposition leader in 2007 when he told Australians made comfortable by years of middle-class welfare under John Howard that “this reckless spending must stop“. Capturing the public’s imagination as well as that of the media and political commentators, Rudd made fiscal responsibility the new black and thereby relegated Howard to the Whitlam and other Profligates’ Hall of Shame.

It’s a matter of record that Rudd’s eventual successor as prime minister, Julia Gillard, did less well in convincing Australians to bear a little carbon price pain for some climate action gain. Gillard did, however, prove to be a more adept apprentice as time went on, transforming both the potentially unpopular increase to the Medicare levy for the National Disability Insurance Scheme and the scrapping of the surplus into actions widely welcomed by the media, commentariat and broader community as sensible and appropriate.

And now Tony Abbott and Joe Hockey are proving to be keen acolytes, converting what could have become public opprobrium into widespread support for scrapping assistance to the car manufacturing industry.

Abbott and Hockey did this by slowly but persistently chipping away at the locally-based but foreign-owned operations’ credibility, questioning their intentions, and undermining their grass-roots support by implying they were nothing more than spivs and carpet-baggers.

The Productivity Commission inquiry into the domestic car manufacturing industry, the results of which were never in doubt, was meant to be the final piece of damning evidence against car industry subsidies. But events moved more quickly than the government expected after Hockey clumsily called Holden’s bluffin December.

Despite Hockey’s over-reach, public opinion has moved from supporting the local manufacturers to the government. Back in January 2012 an Essential poll found 68 per cent of Australians supported the current levels of assistance to the car manufacturers and 58 per cent supported giving them even more. Public approval of subsidies was still high at 58 per cent in October last year, but by December only 45 per cent approved of subsidies to Holden (and even less of increased subsidies to keep Toyota in Australia). The latest poll by Essential finds support has now dropped to 36 per cent*.

This change of sentiment suggests Australians can see the broader merit of some tough decisions being made by the government, which is admittedly easy to do if it’s not your own pay cheque on the line. The next test of whether Abbott and Hockey have mastered the alchemy of public opinion transformation will come when the federal budget is handed down in May.

By all accounts, the first Abbott/Hockey budget is going to be a harsh one – for households, businesses and marginal seat holders.

Having talked tough on fiscal responsibility since being elected (although not consistently walking that talk), the government’s gestures and incantations – from MYEFO and the Commission of Audit to keynote speeches and feature articles – are all crafted to shape voter expectations into acceptance, if not support, for a budget that shares the pain around. The age of entitlement, according to Hockey, has become the age of responsibility. In short, he’s trying to recreate the Rudd magic of 2007.

Expectations management for the budget is just the beginning. The many reviews and inquiries, accompanied by thought-bubble debates in the media suggest the government is also trying to frame the debate, shape views and normalise unpopular reform plans for a range of contentious matters including welfare payments, privatisation of government assets, the unions, and the ABC.

The government may see these also as a simple matter of convincing the Australian public to want what the country needs. But the latter point – what the country needs – might well become hotly contested ground.

* The Essential poll questions on subsidies for the local car manufacturing industry vary, but nevertheless indicate a downward trend over time.

More than one message in SPC decision

Not one but three messages reverberated from the Abbott government’s cabinet decision yesterday to reject a request from iconic Australian fruit-processing company SPC Ardmona for $25 million assistance.*

Both Prime Minister Tony Abbott and Industry Minister Ian Macfarlane stated in no uncertain terms that the decision was a message for business that the days of government being a crutch for business were over. Labeled “an important marker” by Abbott and a “defining point” by Macfarlane, the rebuff signaled that industry restructuring should be led (and, by extension, resourced) by business alone.

Doing as much as possible to deflect any inferred responsibility for jobs lost through the decision, Abbott made a big play on the size, profitability and social conscience of SPC’s parent company, Coca-Cola Amatil. He expressed confidence that the multinational would do the right thing by the canning company and its workers.

And for the second time this week, the government also drew attention to the responsibility of companiesto strike wage agreements with unions that do not threaten their business’s sustainability over time. This is part of a strengthening government homily that companies must take more responsibility for their actions.

However, the big dose of tough love for the ever-demanding Australian business community will likely give little comfort to the recipients of the second message. Taken together, the Cadbury and SPC Ardmona decisions starkly tell voters one thing: some jobs are more equal than others.

Yesterday the Prime Minister rationalised the Coalition’s 2013 election campaign decision to support Cadbury with $16 million in assistance as development of “regional tourism infrastructure” and not simply propping up another struggling business. But at the time he seemed particularly focused on the continuing viability of Cadbury in Tasmania and the 200 jobs that the factory upgrade would add to state’s depressed economy.

The key to this apparent contradiction lies in votes – or more precisely seats in the federal parliament. The SPC Ardmona facility is nestled in the very safe Liberal seat of Murray, which Sharman Stone holds with a whopping two party preferred vote of 70.87 per cent. This healthy margin gives Stone some latitude to be a rebel at times, but it also means the Coalition can treat Murray’s voters with impunity without risking a backlash that bites. In fact the Abbott government could probably slay every first male child in the electorate and still retain the seat.

In contrast, the Cadbury factory is located in Andrew Wilkie’s Tasmanian seat of Denison, and is supplied by the dairy industry in the adjacent seat of Lyons. Not coincidentally, Liberal candidate Eric Hutchinson went on to take Lyons at the 2013 election from Labor’s big man Dick Adams with an almost 14 per cent (two party preferred) swing in his favour.

So the SPC Ardmona decision revealed that if you live in a marginal seat or one represented by a potentially influential independent MP, your job is important to the Coalition. Otherwise, not so much.

Finally, the decision not to protect the jobs of canners and, by extension, their fruit-producing suppliers, sent a decisive message to the Nationals: you can’t always get what you want.

Even though it remains perennially puzzling why this rural rump of agrarian socialists wields greater influence on Coalition decisions than its total vote or number of seats in parliament, they continue to do so. Most recently they were successful in convincing Treasurer Hockey to reject the $3.4 billion foreign takeover bid by US agriculture giant Archer Daniels Midland for local grain-handler GrainCorp. The “national interest” grounds on which he did so were spurious at best and sent a ripple of unease through the business community.

But now a similar public campaign in support of assistance for SPC Ardmona by Agriculture Minister (and deputy leader of the Nationals) Barnaby Joyce has failed. It may be that the Nationals expended their political capital on keeping the Yanks’ hands off our grain-handling infrastructure, or that any preparedness by the free traders in Cabinet to countenance further protectionist assistance for Australian businesses was consumed entirely by the GrainCorp decision. Perhaps it was simply because there are more marginal votes in the grain belts of rural Australia than in Murray.

Either way, the messages conveyed by yesterday’s SPC Ardmona decision may prove counterproductive for Tony Abbott. While he sees them as “an important marker” and a veritable line in the political sand, the message recipients may see them more as a challenge, an ultimatum and a call for retaliatory action.

The voter doesn’t always know best

Voters’ ability to express their displeasure through seemingly perpetual opinion polls has created an entire generation of risk-averse, poll-driven politicians. But who is actually to blame for this populist approach to public policy and the tenure of political leaders?

As Katharine Murphy observed earlier this week:

We elect governments as an investment in [the] long game, yet tear them to shreds for not delivering for us in the here and now. It’s always been thus, an enduring perversity of expectation about politics, but I worry it’s getting worse.

I worry that politics is losing some of its capacity to stand its ground against the various toxicities in the media cycle, and dysfunctions within the parties themselves – that too many perverse incentives are being created to mortgage the future for the present.

The most obvious symptom of this is the trashing of political leaders we’ve seen over the past few years. Politics is itself devaluing the currency of leadership in some Faustian bargain to remain one step ahead of opinion polls.

Our elected representatives once were leaders we admired, or at least respected, and we were confident they would make the right decisions on our behalf.

While Katharine Murphy invokes Faust in her analogy of how our leaders have become devalued, I’d suggest a different type of demonic force has infiltrated our democratic processes: our politicians have become doppelgangers, mirroring our views, our concerns and yes, even our basest prejudices to win favour and the approval of the Newspoll gods.

We need to keep this in mind when railing against policies such as the Government’s proposed changes to 457 visas or the Opposition’s approach to asylum seekers.

Both these positions are mirrors, reflecting the views of the parties’ prospective supporters back to them. The parties do this to convey not-too-subtle subliminal messages to the visceral voters who ultimately will decide the election. “We are like you”, the messages whisper, “we share your concerns” and “your priorities are our priorities”. The parties do this in the hope of making a connection that will deliver a vote on election day.

Whether it is based on fact or fiction, job security and the broader question of employment continue to be voters’ number one obsession. Many factors contribute to this fixation including the inequities of the two-speed economy, the pressure of huge mortgage commitments and the uncertainty associated with GFC-diminished superannuation.

Job anxiety is also a political legacy, an albatross borne by both major parties directly as a result of the fear campaigns they ran against Work Choices, in the case of Labor, and the Liberals’ crusade against the carbon price.

It’s easy for those of us with tertiary educations and regular pay cheques to dismiss such job anxiety as an indulgence of the narrow-minded and ignorant:

But the reality is that every adult Australian, ignorant or not, has the right to vote with as much or as little thought as they care to exercise.

And let’s face it, while its honourable to urge politicians to resist being guided by the ignorant majority, to show some leadership and do what is right, the political reality is inconsistent with that noble goal: there’s little chance of implementing a suite of worthy policies from the opposition or cross-party benches. Just ask the Greens…

It seems the days are long gone when the public supported a politician for doing the right but unpopular thing. In fact, we may well have lost respect for our political leaders altogether. As Jonathan Green observed this week after a (possibly orchestrated) outburst from the parliamentary public gallery during Question Time:

It would be fair to say that many Australian voters view their politicians with something more than laconic distaste and a lot less than humble awe. But this Question Time outburst had that special feeling that is close to a defining feature of our modern politics: that edge of guttural, contemptuous ugliness.

In the converse of my mirror theory, Jonathan Green posits that the depth of voters’ current disdain for political leaders is a reflection of the disrespect with which they are held within their own parties:

Last week we saw the effect again in full and fatal swing, with Victorian Premier Ted Baillieu losing the confidence of his party and thus his job … If the role is so easily tradable, the office so easily removed, is it truly worthy of the sort of respect it has traditionally attracted? … It seems logical that if political parties see leadership as something so casually vulnerable, then the voting public will follow suit and look at those high offices with scant respect.

Former Prime Minister Bob Hawke apparently also canvassed this issue when he addressed a reunion celebrating his time in office at the National Press Club last weekend. Dennis Atkins reported that the striking thing about Hawke’s address was that he didn’t simply dwell on the good old days:

Hawke laid out his story of 1983 to 1991 with typical clarity – explaining the problem his government inherited and how they tackled the momentous challenges. He also pinpointed a central problem of the present broken system of politics and government – that Parliament is held in low regard.

Hawke said the contempt for national politics had to be tackled urgently. He proposed breaking down the way parties approached agendas by having one set of issues that fit neatly with Labor or the Coalition and bigger, more contentious matters handled in a new way. Hawke said these challenges wouldn’t go to party rooms but to parliament to be thrashed out and voted on without politicians bound by pre-determined positions.

There certainly is merit in Hawke’s proposed approach, encouraging parliamentarians to venture beyond their party platforms and explore what their communities think and want. But it does nothing to address the real faultline in Australia’s democracy – the reality that voters are likely to think and want things that might not actually be in the nation’s best interest.

Meanwhile, opinion polls continue to drive our political conversations and popularity remains the most important element of a policy, causing politicians to resort to lowest-common-denominator policies in order to survive.

As Katharine Murphy notes, this approach:

… prioritises personal survival over coherence: it creates a palpable sense of contingency.

In that frame, who will take on hard reform?

The first step towards answering that question is for us, the voters, to accept that our community’s views are at least partly responsible for the populist but ultimately self-destructive state of Australian politics today.

Don’t be surprised – Greens are not ALP’s natural ally

I’m not a psephologist, so I’m quite prepared for this to be blown apart by Mumble or Poll Bludger.

But I’m being driven crazy by the political ignorance displayed by those gnashing their teeth over the recent ratcheting-up of the ALP’s stance against the Greens. In short, the ingénues are saying “why fight with each other when the Libs are the enemy?”.

Such naïveté ignores the reality that each political party considers all others the enemy – even the Libs and Nats vigorously compete against each other for a seat previously held by a retiring Coalition MP (sometimes to their detriment, and sometimes not).

The mistake being made by political newbies and idealists on Twitter is that Labor and the Greens are natural allies against the Coalition. They forget that in the real world, it is each party for themselves with all others being considered the enemy.

Since the last federal election, primary votes for the two major parties and the Greens have taken this path (according to Essential Research, whose polls trend similarly to those of Newspoll and Nielsen):

  • Liberal/National 43.6% → 49%
  • ALP 38.0% → 33.0%
  • Greens 11.8% → 10%
  • Other/independent 6.6% → 8.0%

Note that the only significant changes in support are from the ALP to the Libs/Nats and other/independents.

According to what Australian voters are telling pollsters at the moment, some who voted for the ALP at the last election have now parked themselves with the Coalition or the other/independent category. No Labor voters have shifted to the Greens since the last federal election.

Those aghast by the ALP’s demonisation of the Greens seem to think the ALP needs to win progressive voters back off the Greens to win. But they don’t – they need to win back disaffected Labor voters who are parked with the Libs or others/independents.

Yes, the ALP will still need Green preferences in some seats, but most likely they’re taking those preferences for granted. Green voters are likely to give their preferences to the ALP anyway.

As Andrew Catsaras pointed out on Twitter in response to this post: Every vote the ALP gets from Greens is worth 0.2 of a TPP vote, whereas every vote the ALP pulls off the L-NP is a full TPP vote. This is because Greens voters preference the ALP at about 80%.

The ALP isn’t trying to win progressive votes from the Greens, they’re trying to win the middle class, middle income voters who are parked with the Libs but are uneasy about Abbott. They’re also trying to win progressive voters parked with the other/independent category who find the Greens too extreme.

If you look at Labor’s approach through that prism, what they are doing makes perfect sense. They’re saying both Abbott and the Greens are too extreme, and that the safe harbour is with the ALP.

The by-election for the state seat of Melbourne is the trial run for the ALP’s campaign. Without a Liberal candidate, they can gauge the extent to which non-Green voters are willing to come back to the fold, using an anti-Greens campaign.

They lose nothing from running hard against the Greens, because the Greens’ votes are not the votes they want – they want votes parked with the Libs.

Make no mistake, the next election will have nothing to do with the Greens. It will be about voters returning to the major parties. The only question that remains is which party will they return to?

Post script: Interesting responses and related reads from Andrew Elder, Bernard Keane and Victorian ALP.