Finance Federal Budget Budget 2017: The Coalition will capitalise on Bill Shorten’s hard work
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Budget 2017: The Coalition will capitalise on Bill Shorten’s hard work

Bill Shorten remains less popular than Malcolm Turnbull. Photo: AAP Photo: AAP
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It’s early days yet, but so far it appears Malcolm Turnbull and his Treasurer Scott Morrison have crafted a federal budget that could turn around the government’s political fortunes.

And if the opinion polls do move in Mr Turnbull’s favour, he can thank Labor for pointing out the way to achieve this.

Aside from being an audacious play to keep his job, the federal budget shows Mr Turnbull has finally twigged to something that Labor has known for some time; voters have begun to realise the measure of a good government is more than its budget bottom line.

This is due mostly to the efforts of Bill Shorten and his team. Labor has been tapping into the community’s concern about health and education to turn around the common perception – promulgated by successive Coalition governments and oppositions – that all government debt is bad.

An opinion poll released this week shows the majority of voters, regardless of their political persuasion, think it’s okay for a government to delay returning its budget to surplus if debt is required to maintain services and invest in infrastructure. Even 59 per cent of Coalition voters supported a delay for this purpose.

Sure, voters haven’t completely forgotten Tony Abbott’s “debt and deficit” mantra, and don’t want an enduring blowout in the “government credit card”. But they’d rather have a deficit if it means the popular Gonski and NDIS programs are rolled out in full, the Medicare rebate freeze is lifted, and more roads and rail are built.

Scott Morrison’s “good debt/bad debt” line helped crystalise that concept in voters’ minds, meaning voters may accept the Turnbull administration’s big-taxing, big-spending ways without thinking less of its economic capabilities.

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What will be important in the days and weeks to come is whether the budget’s projections for economic growth stand up to scrutiny by the experts.

Labor’s shadow treasurer Chris Bowen has already insinuated that Treasury isn’t above cooking the books to produce a favourable set of projections for the government of the day.

We can only assume Mr Bowen knows this from the time he was the actual Treasurer, and we should expect the opposition to produce an “independent” set of projections that cast doubt on the government’s.

This will result in the somewhat bizarre scenario where Labor leader Bill Shorten continues to emulate former opposition leader Tony Abbott by railing about the government’s profligacy, and Mr Turnbull does his best Julia Gillard impersonation defending the Coalition’s spending as being for the greater good.

No wonder Mr Abbott and his diminishing band of supporters are spitting chips.

Aside from passing the initial sniff test administered by the nation’s economists and the rating agencies, the budget will also need to survive any slow burning issues if it is to save Mr Turnbull’s skin.

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This includes the Catholic education sector being unhappy about its funding under Gonski 2.0. But the more easily exploitable, and therefore dangerous, budget decision is the imposition of an across-the-board increase to the Medicare levy while essentially giving high-income earners a tax cut by letting the deficit levy lapse (as promised).

Paired with the government’s ongoing commitment to the full $50 billion tax cut for all Australian businesses, the Medicare levy decision is potentially this budget’s fatal flaw.

Labor is already testing a line on the decision, saying the budget hits low-income earners with a tax increase to pay for a tax cut for millionaires and big business. We can expect the opposition to repeat a version of that accusation every day until the next federal election.

The budget also scraps measures from Mr Abbott’s horror 2014 budget that stalled in the Senate, while increasing taxes and government spending.

This is a slap in the face for the ideologues that make up the conservative rump of the Liberal and National parties. They would rather budget measures be stuck in the Senate than “betray” the Coalition tradition of a low-taxing and low-spending government.

So even if Labor fails to blow a hole in this budget’s credibility, we can be sure that Mr Abbott’s camp will certainly try to do so.

Paula Matthewson was media adviser to John Howard in the early 1990s and then worked for almost 25 years in communication, political and industry advocacy roles. Paula has been tweeting and blogging about politics, the media and social media since 2009 under the pen name @Drag0nista.

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