News National The protracted company tax debate is not helping Malcolm Turnbull

The protracted company tax debate is not helping Malcolm Turnbull

malcolm turnbull
Even the backlash to Labor's dividend policy hasn't been a boon. Photo: AAP
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Some believe the government brought on the company tax debate to run interference as the 29th Newspoll was due. If that’s the case, it failed.

There is a strong argument that far from diverting our gaze, the Coalition’s commitment to multibillion-dollar tax cuts for the top end is a real factor in the long run of poor results.

Prime Minister Malcolm Turnbull was confronted with the sound of the tumbrel coming to get him at a Monday news conference.

Channel Ten’s reporter put it to him bluntly: “Twenty-nine Newspolls, it’s not good news. How are you feeling?”

Wearing his best confected happy face Mr Turnbull shot back: “Why are you smiling if it’s not good news?”

He went on to explain the reporter must be smiling because she is happy “that we have created 420,700 jobs in Australia in the last year”.

She refused to be fobbed off: “Prime Minister what about your job?” He ignored her.

But at the weekend his predecessor in the top job, Tony Abbott, told a meeting in his electorate that the Coalition is heading for a massive defeat. He apparently agrees with Mr Turnbull’s 2015 assessment that a trajectory of 29 bad Newspolls (the actual number at the time of the challenge) shows the voters have made up their minds.

Mr Abbott told the meeting there is “no appetite in the party room to change the leader even though the situation is so dire”. According to colleagues he is now working on being leader of the opposition after the projected rout.

Meanwhile, Finance Minister Matthias Cormann is locked in negotiations with Nick Xenophon defector and Senate newbie Tim Storer and Derryn Hinch to get them across the line backing the final stage of the $65 billion company tax cut “Jobs and Growth” package.

If either holds out, the tax cut is doomed.

The irony is that record jobs growth has been achieved without the full tax relief – and without plunging the budget into deeper deficit.

Treasurer Scott Morrison insists his tax cuts, none of which have yet kicked in and would not come into full operation for another nine years, are fully paid for in the budget. But the experience of all governments in the past decade is the mirage effect of the return to budget surplus.

Mr Turnbull and Mr Morrison are convinced these cuts are something of an economic panacea, but constant opinion polling shows voters aren’t persuaded.

Labor, on the other hand, is convinced that not only the government but the Senate crossbench will pay a price for supporting them and fully intends to promise their repeal – at least of those elements that have not yet commenced by the time of the next election.

The arguments, it says, against a tax cut for the biggest companies paying their chief executives millions while keeping their workers on stagnant wages and paying little or no tax will be as valid in 12 months as they are now.

Similarly, the opposition is confident its policy ditching cash rebates for excessive credits on shares is also a winner. Its line is: Why should millionaires and the wealthier retirees get a hand out for tax they haven’t paid?

However, it has had to do some re-packaging and has now announced a rethink exempting all pensioners and part pensioners with a “Pensioner Guarantee”.

This will still leave the budget bottom line $10.7 billion better off over a decade.

The Treasurer says the adjustment means “Labor stuffed it up”. But there could be a lesson there for him and Mr Turnbull in being more attuned to the public mood.

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

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