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Budgets are never delivered in a vacuum. They have a context, so let’s map the current context. At the start of 2020, Australians were disillusioned with government. Trust was low. But the pandemic and the response nudged public sentiment in a different direction.
We can illustrate this quickly with a couple of metrics from our Guardian Essential poll. On 24 March, only 56% of the sample trusted government to give them reliable information about Covid-19. A couple of weeks later, it was up to 63%. By August that measure of trust was holding at 66%.
Back in September 2016, only 26% of the Guardian Essential sample trusted the federal parliament. In March 2019, trust stood at 35%, but by the end of April 2020, that trust metric was up to 53%. The reasons for this rebound are pretty obvious. When the pandemic hit, governments demonstrated a degree of emotional intelligence and, broadly speaking, the responses were competent.
Sifting through all this helps me illustrate a point. Crises, convulsions like the one we are in, pick societies up and set them down in a different place. Perceptions and priorities change. The global financial crisis lit a match under populism and isolationism, and fuelled a politics of grievance. For much of 2020, documenting and analysing these extraordinary events, I’ve wondered what the bequest of Covid will be for our politics and our society. None of us yet know that answer to the question.
Let’s track back now to the budget and situate the offerings of the week within that broader context. Governments, including the Morrison government, have been very present during the pandemic, and speaking generally, Australians have been reassured by that.
But this week, the government in Canberra began a staged retreat. The special income support rolled out during the pandemic is on the way out, and for some weeks Scott Morrison has been telling us he wants a private sector-led recovery.
Turns out he wasn’t lying. Yes there are huge dollars marching out the door in this budget both in spending and foregone revenue, and that might create the appearance of very present government, but what we learned this week is the Coalition wants to outsource responsibility for the recovery to us.
Income tax cuts passed the Senate on Friday. The fervent hope is we spend them and not save them. As well as a more favourable lending regime and lighter touch insolvency rules, business has been handed a gobsmacking level of tax concessions ($27bn in foregone revenue) in the hope firms will go on an investment spree, and use a cut-price jobkeeper subsidy to hire apprentices and workers under 35.
The core message of the Morrison/Frydenberg budget is we’ve been there for you, and now you need to show up for the economy. As the prime minister said cheerily on Friday, the Liberal party’s passion for tax cuts remained undimmed, and “we don’t see government as the solution forever”.
Because the onus shifted so significantly from the parliament to the people after Tuesday night, and because the major measures were unopposed, the budget seemed to run out of puff by Wednesday afternoon. By Thursday, the government appeared more focused on anticipating Labor’s scheduled riposte and fortifying its defences than on trumpeting its own economic statement – which felt like another strange vignette in a year brimming with strange.
Anthony Albanese painted the future differently in Thursday’s budget reply, but we’ll get to the substance of that in a minute. First we need to set up what happened in the lead up to Thursday night’s speech. Going in to the budget week, some in Labor were nervous about launching an assertive alternative rather than keeping focus trained on the government.
A bunker mentality is understandable at a couple of levels. During the last two terms, by presenting to voters as the government in exile, Labor helped crowd out sustained scrutiny of the Coalition, and also facilitated the strange but recurrent sense of the Coalition governing like an opposition, which is one of the reasons the government maintains a teflon quality. Labor does not want to repeat that mistake.
The second contributor to the bunker mentality is post-traumatic stress. In 2019, Labor went to an election with a bold alternative policy offering and was rejected by the voters. So approaching budget week 2020, there were different views about how assertive Albanese should be in the budget reply.
Albanese approached Thursday night understanding that the current political environment benefits incumbents, and believing that budget week presented an opportunity to put Labor back in the spotlight and back in contention if the speech contained some attention-grabbing measures that would begin a case for change.
The childcare package was an appeal to working families, and women, and was pitched by its internal architects as a productivity measure, not a welfare measure, to help answer the critique of the last campaign that Labor lacks a growth strategy.
The energy policy was about the ongoing slog of trying to knit together the aspirations of the party’s progressive and blue-collar constituencies. A commitment to set up a government-owned corporation to build necessary transmission architecture shakes a righteous fist against privatisations (generally popular), enables Labor to say it is about ushering more renewables into the grid (popular with progressives), but reassure that transmission infrastructure will be built by workers from traditional industries in the regions, using Australian steel (thumbs up from the blue-collar voters Morrison likes to court).
Labor can’t win until it knits its constituencies, so Thursday night’s speech was an experiment in using the leader’s personal story as wool and needles. Albanese is a progressive bloke from the inner city who grew up in a working class household.
Albanese opened by identifying himself as a child of the Whitlam government. The reply speech opened with “men and women of Australia” – Gough Whitlam’s opening in the 1972 campaign. He foregrounded his origins: child of a single mother, growing up in public housing, who had worked for every element of his success, and now stood at the dispatch box in Canberra making a pitch to be prime minister.
The point of the log cabin story was part exposition (voters outside of Sydney still don’t know enough about Albanese despite his long political career); part relatability (telling working people he was one of them, not some slick apparatchik who discovered democratic socialism at the bottom of a Negroni); part homily about the Labor alternative he personifies (“I know government has the power to break down the barriers of disadvantage, to change lives for the better, because I’ve seen it, I’ve lived it”).
The sum of Thursday night’s speech – the most successful of Albanese’s various outings since taking the leadership in my view – was this: Labor would not be proposing an outsourced recovery from Covid-19.
If Labor was to win the next election, government would be present, and more than that, the pandemic presented an opportunity to shift the dial. “We have a once-in-a-generation chance to rebuild our economy and our country for the better,” he said.
I know Morrison copped some flak on social media for appearing to be disrespectful during Albanese’s Thursday outing. Apparently that’s how the body language looked on television. I was in the chamber on Thursday night, and I can tell you the prime minister wasn’t being disrespectful. Morrison was obviously tired, but he was listening, and closely. He was weighing his opponent’s words.
As you would. Morrison is a sharp political operator who understands there is more than one way to frame an economic recovery. The prime minister war games and researches, and he wouldn’t not have crafted his budget in the way he did if he didn’t feel like he could carry the “government isn’t everything” argument.
But there are risks in the path the government has set, the main risk being everyone saves, no one spends, business doesn’t feel confident enough to hire, growth doesn’t return, a third wave rears its head. While I’ve never met anyone who has ever returned a tax cut, there is a risk Morrison has misjudged not only the strategy, but the national mood, just as he did in the bushfires early in the year.
The question budget week has left us with is a simple one, and it’s this. To borrow a Howardism, who will the times suit?
Source: The Guardian
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