Mark Latham
Tony Abbott’s PPL scheme is the most generous parental policy since the reading of Kerry Packer’s will. Photo: Alex Ellinghausen
The verdict on the election campaign is in. Tony Abbott is an opportunist on a scale rarely seen in federal politics.
It started with his four-year insurgency against carbon pricing, a policy Abbott had previously supported. Predictions of economic ruin from Labor’s carbon tax, with whole regions and industries wiped out, were made to look absurd by ongoing income and employment growth.
Then he turned to debt and deficit, in May proclaiming a “budget emergency”. The shallowness of this strategy has now become clear, with Abbott crab-walking away from his commitment to improve the budget bottom line compared to Treasury’s forward estimates.
In his policy speech on Sunday, all the Opposition Leader could promise was a surplus of 1 per cent of GDP in 10 years’ time – four elections away. Perhaps he plans to hold a 2023 summit to work out the details.
This is a new low in democratic transparency. By the normal standards of public life, a leader who declares a national budget emergency, trying to create panic in the economy, has a moral and political obligation to set out a solution. Yet to avoid scrutiny, Abbott has refused to release a full list of savings and funding sources.
If there is an emergency, the net impact of the Coalition’s policy announcements has been to make it worse. A consensus has emerged among private-sector economists that an Abbott government will add substantially to debt and deficit. The exact figures have been obscured by the Coalition’s fiscal secrecy and the type of rubbery numbers released on Wednesday by shadow treasurer Joe Hockey. On average, economists are predicting a deterioration in the budget position of $25 billion over four years.
Budgetary indulgences for the well off
What is certain is Abbott’s determination to create new middle-class welfare entitlements. His PPL scheme is the most generous parental policy since the reading of Kerry Packer’s will. The Coalition’s compo-for-nothing carbon tax payments and plan to abolish means-testing of the private health insurance rebate are no less extravagant. On Sunday, Abbott added a fourth budgetary indulgence: cheaper medicines for self-funded retirees.
Last year, Hockey said he wanted to “end the age of entitlement”, objecting to “the pain associated with grand announcements for extending the welfare state”. Yet his leader’s middle-class welfare agenda, if implemented in government, will cost the Commonwealth $11.5 billion per annum. The Liberals are inventing new entitlements on a scale not seen in this country since Jack Lang during the Great Depression.
Abbott’s campaign for fiscal discipline is as fraudulent as his carbon tax scare. It’s a low-grade pitch to the worst instincts of Australian politics: inventing crises, exaggerating difficulties, encouraging a culture of non-stop whingeing but then dodging the leadership task of presenting answers. In effect, the Coalition hopes to win by stealth, by cheating democracy. Any government it forms will be illegitimate.
His real sin is profligacy
Politically, Labor has misread Abbott. It has tried to portray him as a cost-cutting fiend when, in truth, his greatest sin is profligacy. As a disciple of BA Santamaria, the Opposition Leader is an old-fashioned state paternalist, positioning government as a counterpoint to the excesses of free-market economics at one extreme and the growth of non-Western, non-Christian values at the other.
Thus Abbott’s first instincts are populist, highly susceptible to electoral and interest group pressure for more spending. As with much of Australia’s right-wing cadre, he is fanatical about political life.
He has immersed himself in the collective institutions of party politics and parliament. Abbott’s objective is not to diminish state power but to use the authority of government as a way of bringing society closer to his own beliefs.
This is a frustrating time for Australia’s right-wing ideologues.
They want the Coalition to wind back the welfare state but through his addiction to opportunism, Abbott has emerged as a gold-plated welfarist. Labor will most likely lose seats on September 7, but in one vital respect this doesn’t matter. It has already won the debate about the size and role of government.
Mark Latham is a former leader of the ALP
The Australian Financial Review
