The ploys are back in town as Parliament resumes

The first stanza of this election year will be characterised by political parties trialling election strategies to see which have traction with voters and which are a waste of precious campaign funds.

The first stanza of this election year will be characterised by political parties trialling election strategies to see which have traction with voters and which are a waste of precious campaign funds.

Drum_newWeekly column for The Drum.

Abbott navigates his crucial “year of reform”

Tony Abbott would be crazy-brave and bordering on foolish to take proposals to expand the GST and change workplace relations laws to the next election.

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.

Tough reform from the Coalition playbook

Abbott’s campaign to make IR reform electorally palatable will closely follow the blueprint created by his mentor, John Howard, when he introduced the GST.

Despite confected howls of indignation from the Opposition and the labour movement, the Abbott Government’s mooted Productivity Commission inquiry into workplace laws is an election promise kept, not broken.

The PC inquiry was foreshadowed prior to the 2013 federal election, partly to placate those in the business community and media clamouring for IR reform. But it’s also part of a bold plan to take WorkChoices Mk II to the 2016 federal election and secure the people’s mandate in order to deliver what the business community wants.

Not that the Coalition’s new IR policy will be called any such thing – for WorkChoices is dead, buried AND cremated. Abbott’s campaign to make WorkChoices-by-another-name electorally palatable will closely follow the blueprint created by his mentor, John Howard, when he successfully took the GST to the 1998 federal election, paving the way for the tax to be established in July 2000.

Keeping in mind that, following John Hewson’s humiliating loss to the unpopular Paul Keating in 1993 predominantly because of the GST, and that he himself had vowed to never, ever propose a GST, Howard didn’t just plonk it on the table during the election campaign and ask voters to trust him. Instead he spent more than a year preparing the ground and shaping voters’ expectations to ensure the new tax had the best chance of success at the ballot.

To counter its rocky past and reputation as a partisan plaything, the GST was first considered and then recommended by a taxation taskforce established by the government to prepare options for tax reform. (Said taskforce was chaired by Treasury official and former Keating staffer, Ken Henry).

Exactly one year after establishing that taskforce, Howard’s treasurer Peter Costello presented voters with a package of tax reforms that included not only a GST but also personal income tax cuts, an increase in the tax free threshold and pensions, and the scrapping of wholesale sales tax, as well as the elimination of nine other taxes imposed at the state and territory level. Then the government blitzed voters with a controversial advertising campaign before immediately plunging the nation into a moderately early federal election.

Abbott is wise to be treating industrial relations reform as carefully as Howard did the GST. While he hasn’t explicitly gone back on an undertaking in the way Howard did, Abbott will be subject to that accusation right up until the next federal election and it has a good chance of getting traction.

Like Howard, Abbott is trying to create a sense of vision, momentum and inevitability around a vexed policy that obliterated one of his predecessors. Instead of sending it to a bureaucratic taskforce, Abbott has chosen to launder the policy by sending it to the economically dry (and therefore reasonably predictable) Productivity Commission, which will simultaneously bestow a sheen of objectivity on the essentially predetermined recommendations to urgently reform Australia’s workplace laws.

The media scandals and union angst generated by the Royal Commission into union governance and corruption are intended to build complementary support in the general community for Something To Be Done and soften resistance to the Government reigning in union power. This should create a favourable environment for the PC recommendations to be handed down in April next year, leaving a year for the government to release its workplace relations policy in response and perhaps run a controversial advertising campaign before calling the 2016 election.

It’s a matter of record that Howard narrowly won the GST election, securing less than 50 per cent of the vote and shrinking his majority from 40 seats to 12. Less certain is whether the GST dragged Howard down or propped him up.

At this early stage it’s equally difficult to determine whether IR reform will be a bane or bonus for Abbott. He has only a majority of 30 seats and consequently less scope for failure than Howard.*

The key is likely a rarely discussed element of the successful GST campaign. Political scholar Richard Eccleston pointed out that particularly influential opponents of the GST in the 1993 election – namely welfare advocates – joined with the business community after the regressive indirect tax increases announced in Keating’s 1993-94 budget in 1996 to find common tax reform objectives. These ultimately included agreement that a low rate, broad-based consumption tax should be part of a wide tax reform package. According to Eccleston:

A combination of changing economic conditions, the Keating government’s consequent deceit in relation to indirect taxation, and the disciplined promotion of the need for reform by the welfare-business coalition from 1996 convinced a majority of voters that indirect tax reform was necessary.

Abbott is going to need a similar convergence of traditionally disparate interests to get his IR reforms across the line in 2016. He’ll need to bring workers and employers together to support workplace reform in the same way that ACOSS and ACCI jointly supported tax reform in 1996. Demonising the union movement and creating a common “foe” for employees and bosses appears to be the chosen way.

Yet 55 per cent of Australians say they’re concerned about job security, 61 per cent think unions are important, and 45 per cent say workers are better off with stronger unions. So it will be interesting to see how Abbott fares with the IR reforms he is prepared to make during this parliamentary term.

The Government introduced legislation last month to implement the Coalition’s Fair Work Laws election policy. The bill aims to amend the Fair Work Act to tighten right-of-entry rules for unions, allow employees to trade penalty rates for more flexible hours and close “strike first, talk later” loopholes.

Of course that won’t occur any time soon because the legislation won’t be passed by the current Senate. Instead the legislation is little more than a platform upon which the parties, unions and employer groups can continue to wage their industrial relations battle.

Abbott and his Employment Minister Eric Abetz may have introduced the legislation purely to create this opportunity to further denigrate unions in the eyes of the public. But if voter sympathy for the labour movement is generated instead, Abbott’s bold plan may well be dashed before it’s even really under way.