News National Scott Morrison has six weeks to join the real world where voters live
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Scott Morrison has six weeks to join the real world where voters live

Morrison, Turnbull and Cormann
Cheshire cats: Scott Morrison, Malcolm Turnbull and Mathias Cormann spruiking the government's tax cuts. Photo: AAP
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On Friday the three key economic players in the government all looked like the cat that had swallowed the canary. The PM, Treasurer and Finance Minister were trumpeting the big win in getting the Senate to deliver half of the enterprise tax cut plan.

But yet again, the Newspoll came as a thudding reality check. OK, the election is not for another two years but almost 10 months of the government trailing Labor is saying something.

When combined with the other major polls we see an indicative trend, market research, if you like, that implementing its agenda is impressing nobody much, except themselves.

In truth, you don’t need the pollsters to tell you that on the issues that really count to people the Turnbull government is on the wrong side of the arguments. And last week was ample testimony to that.

By Friday, the Parliament had rejected the government’s attempts to weaken the defences against race hate speech. An issue put on the agenda by a rump of right wingers in the Coalition, aided and abetted by a small cheer squad outside the Parliament.

It was a long way from where most Australians are focused.

Then the coup de grace, the $24 billion worth of tax cuts for companies with a turnover up to $50 million. This was trumpeted as ensuring “our tax system is competitive to keep the jobs, to keep the wages and to keep the growth”.

Pardon me … “keep”? Out there in voter land, unemployment is rising, as is underemployment. Wages have been stagnant or even falling. Growth is struggling.

But there is more. We have no clear way of knowing how Treasurer Scott Morrison intends to pay for this largesse. Anyone would think there isn’t a budget deficit in the vicinity of $36 billion already out there.

The Treasurer hasn’t ruled out tax rises elsewhere. And in evidence of a political tin ear, he is boasting that he has achieved 75 per cent of his projected budget savings. Those are the ones targeting family payments, pensioners and other welfare recipients.

And just by the way there is evidence to show giving small business a tax cut and a more generous asset write-off regime doesn’t achieve its stated aim.

Former treasurer Joe Hockey delivered a 1.5 per cent small business tax cut in his second budget to no discernible effect. The deficit kept growing.

So while Mr Morrison is demanding that Labor come clean on whether it will repeal these business tax cuts, the opposition is demanding that he show what their economic benefits are.

On treasury’s own modelling the $50 billion, 10-year package would deliver a growth dividend of 1 per cent and a wage increase of $2 a day in 20 years’ time. So what would a halving of it do?

nick xenophon
Nick Xenophon on Monday defended helping the Turnbull government land its company tax cuts.

The Treasurer, or ScoMo as he is known to his mates, has six weeks to leave the parallel universe and join the real world where the voters are. His budget is his last best chance to begin turning the government’s fortunes around.

He has to neuter the lethal opposition charge that he is all about tax cuts for business and wage cuts for workers. He can’t do that by defending the Fair Work Commission’s Sunday penalty rate cuts. Or while the government argues in the Commission that it should leave the minimum wage where it is or at least be very cautious about raising it.

He also should think long and hard about scrapping the energy supplement for pensioners and others worth $365 a year, every year in favour of the Nick Xenophon-inspired one-off $75 for singles or $125 for couples.

For a government promising to make energy costs a central element of its own recovery plan, it is gobsmacking that it refuses point blank to put a market price signal like an emissions intensity scheme in place. A reluctance that stubbornly rejects the urgings of its business mates and the energy producers as the best way to deliver its promises.

Then there are the other zombie measures from the 2014 budget which Mr Morrison says he is still fighting for, though they are continually rejected by the Senate because they are too draconian.

You can’t talk fairness and equity while you are palpably not delivering it.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics. He tweets at @PaulBongiorno

For more columns from Paul Bongiorno, click here

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