Coalition should try talking to Labor

Last week’s debacle over guns for votes demonstrates the folly of the Coalition trying to govern with the support of nine out of 11 Senate crossbenchers. At a time when the Turnbull government should have been concentrating on a strategy for budget repair it was developing a political strategy that succeeded only in portraying it as a truckload of shotgun-toting yahoos hunting for feral pigs.


Tony Abbott outflanked the Coalition cowboys on the left, declaring that allowing the importation of Adler seven-cartridge shotguns would be “crackers”, despite as prime minister opening the door to Senator Leyonhjelm’s demands that his government do exactly that. Meanwhile, back at the ranch, the ratings agencies are warning of a downgrade if the budget isn’t repaired quickly.


Australians are not Trumpeteers – mostly we accept the results of elections and hope the duly elected party gets on with the task of governing. But this government seems so easily distracted, not only responding to others’ sideshows while managing to create plenty of their own. Yet Malcolm Turnbull’s single greatest post-election success was the compromise on the omnibus savings bill negotiated with Labor. Instead of cutting sleazy gun deals with the likes of Senator Leyonhjelm, the government would be far better off negotiating quietly with Labor on a mini-budget to be presented in December’s mid-year economic and fiscal outlook.


If the risk of a downgrade to Australia’s AAA credit rating is to be averted, strong progress on budget repair must be achieved and further progress foreshadowed in the mid-year fiscal update. As the ratings agencies themselves have pointed out, progress will need to involve a combination of expenditure savings and revenue measures.


After campaigning against Labor’s policy to crack down on what Treasurer Morrison himself described as the “excesses” of negative gearing tax concessions – on the basis that it would reduce housing prices – Treasurer Morrison is now telling the states they must do something bring house prices down. The government can’t work out whether it wants house prices to go up (its pre-election position) or down (its post-election position). It was the Treasurer who waved around a BIS Shrapnel report, which hadn’t modelled Labor’s policy at all, warning of economic Armageddon from falling house prices if negative gearing concessions were touched.


Sure, the government went to the election campaigning against Labor’s so-called “housing tax”, making it more difficult politically to touch negative gearing post-election, but maybe it’s time to declare the on-gain, off-again budget emergency on again and at the same time explain that deflating the housing bubble is good for first-home buyers.


Obesity is a horrendous problem in Australia, with massive social, economic and fiscal costs. Britain’s conservative government has announced a tax on excessively sugary soft drinks. Australia taxes tobacco and alcohol, yet excessive amounts of sugar in soft drinks are not considered ‘bads’ in our tax system.


Instead of genuinely trying to repair the budget, perhaps some in the government think they’re onto another clever political strategy, like the guns-for-votes manoeuvre that went so well. Maybe they believe they can put up again a bunch of savings measures that Labor will never support, such as cutting back on paid parental leave and withdrawing the Gonski funding increases for Australia’s most disadvantaged schools, and try to blame Labor for the loss of Australia’s AAA credit rating. It might work, though the public will ask how a Coalition government that had been in power since 2013 could in late-2016 legitimately blame Labor for its ever-widening deficits.


And it’s just possible that the voting public would ask the government why in a fiscal crisis it continued to pour hundreds of millions of dollars into Australia’s wealthiest private schools and paid the age pension to cohorts of retirees who are clearly well off. A response that these beneficiaries constitute the Liberal Party’s political base is unlikely to cut the mustard among lower and middle income earners.


Within the government are serious parliamentarians who have the nation’s best interests at heart, including the Prime Minister. While there are legitimate disagreements on policy priorities, Labor, too, has a leader and an economic team including Chris Bowen, Jim Chalmers and Andrew Leigh who are willing to back in the national interest. Instead of being diverted and distracted by sideshows, assuring its self-destruction, the government should concentrate on the main economic game and build on the down payment negotiated with Labor that secured the passage of the omnibus savings bill.