News National Turnbull government faces a bruising Senate budget fight

Turnbull government faces a bruising Senate budget fight

Malcolm Turnbull budget
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Prime Minister Malcolm Turnbull sounded almost Churchillian as he made a plea to the Senate to help him bring the budget back into balance.

“It is a responsibility that weighs heavily on the shoulders of every single member of the house and the Senate, regardless of their party,” he told reporters in Townsville on Monday.

He singled out the Labor Party for the simple fact that if the opposition is on board, then everyone else in the upper house is irrelevant.

But the chances of the government getting its fiscal fix through the Parliament unscathed are no better than the politically toxic 2014 budget that ended the careers of Tony Abbott and Joe Hockey.

In fact, the word around the government is Treasurer Scott Morrison is getting ready to ditch about $7 billion worth of so-called zombie measures – the walking dead savings still on the books the Senate repeatedly refuses to pass.

Turnbull Morrison budget
Treasurer Morrison has received a scathing response to his $50 billion Enterprise Tax plan. Photo: AAP

But here is where it gets somewhat mystifying. The radical surgery that Christopher Pyne as Mr Abbott’s education minister foisted on universities sight unseen three years ago has been ditched – but not the savings bottom line he was after.

The current minister Simon Birmingham has made a better fist of preparing the universities for the crunch but his $2.8 billion worth of cuts is no more palatable.

The opposition, and indeed the Greens, simply don’t buy the Deloitte Access Economics findings into the financial health of the universities. They certainly don’t believe it justifies raising fees and demanding earlier higher repayment of student loans.

Bill Shorten is scathing of the plan in the context of the Treasurer reaffirming that his $50 billion Enterprise Tax plan, cutting corporate taxes for the biggest companies, is still very much on the table.

“Why is it that everything is on the table for cuts except tax giveaways for the top end of town?”

Mr Shorten bluntly warned the Prime Minister against “slugging university students in Australia to help pay for his unfunded corporate tax giveaway to his rich mates”.

The ideological divide between the opposition and the government on trickle-down economics could not be starker. The Treasurer is unapologetic.

He is proud of the fact that he has already pushed half his business tax plan through the Parliament at a cost of $24 billion. His belief is that companies with a turnover up to $50 million will now employ more people and pay them higher wages.

That flies in the face of past experience. Company profits surged 65 per cent last year, and yet wages are stagnating and employment growth, especially for full-time jobs, is stalling.

Mr Shorten said the billions being thrown at the corporate sector, plunging the budget into deeper deficit for longer, should be directed at investing in health and education instead.

He has laid down a marker for the government homing in on the Prime Minister’s complaint that Labor “lied” about the government’s intention to dismember Medicare.

“All Medicare cuts should be reversed in full, on time, on budget night. It is time for Mr Turnbull to prioritise Medicare over millionaires,” Mr Shorten said.

That is a potent line of attack as we saw at the election. But some Liberal MPs believe the Treasurer and Prime Minister are taking less of a risk targeting universities.

“We’ve already lost that vote,” was one MP’s assessment.

Mr Turnbull will leave his Treasurer in the budget trenches on Wednesday and fly out for his meeting with US President Donald Trump in New York.

The heightened tensions on the Korean Peninsula will figure prominently in those discussions.

Whatever concerns there are over the budget numbers will pale into insignificance if the President’s threatened staredown of North Korea’s irascible Kim Jong-un explodes into war.

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

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