This was published 3 years ago
Opinion
While Scott Morrison stays true to form, China is setting itself up for the future
Sean Kelly
ColumnistOnce upon a time, when Peter Costello was treasurer, the festival of the budget would last for a couple of months. There would be a month of feverish speculation beforehand, accompanied by leaks, of both the deliberate and the accidental kind.
The end of this first part of the festival would come with the budget itself, unveiled, like a wonderful meal, to a waiting nation. And then, having accepted the congratulations of his colleagues, the treasurer would set off on a tour of the country, spreading the good news to any Australians who had not yet been fortunate enough to hear about what he had so skilfully prepared for them.
Illustration: John ShakespeareCredit:
This second part of the festival would only draw to a close once the most controversial parts of the budget passed (or didn’t pass) through the Parliament.
That second act is all but gone now. Sometime in the past 15 years it vanished, the victim of a more cynical public and a speeding media cycle.
Unless the budget gives the opposition something truly juicy to oppose – the mistake Joe Hockey made in 2014 – it’s often over, more or less, three days after the budget is presented. At that point, the media and the public move onto something else.
This change has had two effects. First, it means that the sales job of the month before is more important. And this, in turn, means that, while governments inevitably work on budgets until the very last moment, taking early decisions is important if a government wants to get the full political bang for its buck.
Now consider just how difficult this has made the government’s budget preparation this year – in what was already a very complicated situation. Just a few weeks ago the country felt mired in crisis. The mood was sullen, tending towards a kind of claustrophobic indignation. The premiers and the Prime Minister were yelling at each other.
This is the environment in which the government was shaping the budget. And this means that the budget will look very different from what was envisioned a few months ago, and different, perhaps, from the one that might be crafted if the government were beginning the task now.
Scott Morrison had originally intended a budget of dramatic reform, it seemed. In April, towards the end of one of those interminable prime ministerial introductions, he said that we “must look to the recovery”. The government was looking at old reports on economic reform – though he stressed that it was looking at them with “fresh eyes, with very fresh eyes”. It was engaged in the process of “harvesting all of these important policy options”.
A journalist – I think it was Michelle Grattan, who is never content without specifics – asked if that meant overarching reform would appear in the budget. Morrison told her it was early days, but that “the budget will be a significant contribution in that respect. I mean it always is. And the scale of the task that we have on the economic front is bigger than anything we've known for a very, very long time, arguably since the Great Depression. And so you can expect the budget to be very significant in that context".
A lot has happened since April. Perhaps, for quite some time, the government retained this intention. But in recent weeks the government seems to have started quietly seeding the idea that this won’t be a reform budget after all. There might be a lot of spending, and a lot of announcements, but nothing really dramatic. The word “reform” is still being used, but more in that blandly aggrandising way that governments these days call everything they do “reform”.
At the simplest level this is Morrison following his usual habit of occupying several news cycles by suggesting he is working on momentous changes, before actually making only very small changes. But in this case there are two specific reasons worth noting.
In that April press conference, Morrison suggested that reform would be delivered by working with other groups, and mentioned “the excellent working relationship we’ve been establishing with the ACTU”.
In the early days of negotiations on industrial relations changes, Morrison was sometimes described as the new Bob Hawke, bringing unions, business and government together, and it’s true that working relationship has been better than anybody had any right to expect it to be.
But on Thursday, after several reports suggesting trouble, the ACTU put out a media statement criticising employer groups for breaching confidentiality. They had, said the union, no desire to reach common ground, but only a wish “to undermine working people’s rights”. The statement said the union still believed an agreement was possible – but it’s reasonable to think the chances of large shifts have diminished.
At the time the government first began trumpeting its work with unions, the journalist Dennis Atkins drew an important distinction between Morrison and Hawke. Hawke, he wrote, would have run the process himself, rather than handing the work off to his minister. Similarly, when John Howard had to get the GST passed by the Parliament, he had to negotiate with the Democrats himself. And so it’s worth noting that the other group Morrison said he would work with on reform was the states and territories.
Later, he said the national cabinet would be “driven by a singular agenda, and that is to create jobs”. Some of the reforms that seemed to be in the mix were state responsibilities, but there were hopes there might be some kind of trade-off between the two levels of government. But fairly quickly the federal government began to suggest that what the states did was up to the states. Again, Morrison chose to be hands off.
Morrison’s habit of always keeping himself at a distance, in order to avoid full responsibility, carries a political risk, that voters will one day get sick of the dodging. But the more immediate risk is that, by keeping him from getting properly involved, his ability to make things happen is severely hampered. At some point, if he wants to deliver real change, Morrison is going to have to put his own authority on the line.
Of course, whether Morrison wants to deliver change is an open question – his policy passions remain a mystery. But regardless, any desire for reform in this budget would have been tempered by the situation in which he thought the budget would be delivered: still in the emergency phase, still trying to prop up the bridge he had tried to build to the other side of this crisis, rather than worrying what might lie on the other side of it. And so it makes sense that the measures we’ve heard about this week – to help businesses through insolvency and to improve people’s access to loans – feel more about economic survival than anything else.
As numbers in Victoria and NSW fall, the nation’s mood has brightened; we have begun looking forward to the future. Things shift quickly during this pandemic. But the government, its policy decisions forged in the atmosphere of weeks ago, feels still as though it is approaching things month by month.
Perhaps this will pay off. After all, the virus might do anything, and a little more certainty might be helpful in deciding what comes next. But this past week has brought warnings of the way that time can get away from a government.
The most obvious was the government’s decision to finally, after seven years of complaint, accept the inevitability of Kevin Rudd’s plan for an NBN based on fibre to the home. Then there was Josh Frydenberg’s wise announcement that the government would stop worrying about debt and deficit for the next few years.
Of course, the Reserve Bank has been telling the government for some time to stop worrying about debt and invest in infrastructure. We would be in a better position, with some of these projects up and running, and their benefits to be delivered sooner, if the government had listened earlier.
Most importantly, China’s President, Xi Jinping, announced that it would aim to be carbon neutral by 2060. This is a decision of massive significance. As a country very exposed to the dangers of global heating we should be glad.
But that joy should be hedged by concern that we have missed our chance in the massive race in renewable energy that will now speed up. Again, this is something the government has been warned about for years.
For some time, Anthony Albanese has been pointing out that by the time the next election comes around, this government will have been in power for around nine years. This hope for an “it’s time” factor can sometimes seem like wishful thinking – when Morrison came to power, didn’t he reset the clock? But sometimes impressions mount quietly. Just as Labor governments are often punished by voters for overreach, Liberal governments are often punished most for what they fail to do.
It’s the opportunities Morrison doesn’t take with this budget – just when other countries are setting themselves up for the future – that could end up hurting him. And even if they don’t, at some point down the track, they’ll probably hurt us.