For once today I was beaten to the punch in writing a sensible critique, from Tony Walker at Domainfax:
If a textbook case of how not to sell a big picture tax reform to the Australian people was needed, this has been it.
Prime Minister Malcolm Turnbull may still have time to rescue a tax reform push with some detailed proposals, but he is edging closer to a point of no return when it simply becomes impossible to do anything meaningful on the tax front beyond nibbling at the edges.
…If not now for meaningful tax reform – including realistic revenue raising measures – when Turnbull’s own popularity is at a high compared with the alternative, then when?
Turnbull’s indecisiveness on this issue is in danger of not simply demoralising his own troops, but the country as well.
Forget the polls, Australians are ready for root and branch tax reform accompanied by spending cuts if such a package is seen to be fair. But first you need some details, and then a commitment to marketing those reforms.
People understand that our good fortune which has been driven by the commodities boom, is at an end and something will have to give. That’s reality: what’s required is political spine to impart those sorts of hard truths in an election year.
Precisely. I have been warning PMT on this front for some time, he is in danger of pulling a Bob Carr, all talk and no action. Moreover, there is no policy process apparent. The last two days have seen not just the GST junked after months of groundwork, but PMT state that negative gearing is going to be cut, only to have Property Council alumnus Treasurer Morrison deny it. This is reminiscent of the Abbott regime at its worst.
The bizarre thing is that policy process is simple. First, decide what you stand for then do your research to determine what policies will guide the nation in that direction. Second, market those ideas to the polity. Don’t debate different policy ideas in public. Lead the discussion and fend off your opponents. Give yourself a long lead time in which to do it so that you win the dialectic and own the centre of the polity. Then announce your detailed policy and run with it. Only if you capture the public’s hearts and minds first will you be able fend off the vested interests that will crowd in to destroy the policy.
I mean, check this out, also from the AFR:
Liberal Party Victorian president Michael Kroger has called for Business Council of Australia chief executive Jennifer Westacott to be sacked and said the peak business group had “no idea” how to influence public opinion and had failed in the debate over the GST.
Responding to an outcry by the business community after Mr Turnbull all but abandoned the push to increase the GST, the long-time Liberal figure laid the blame squarely at the feet of the “slumbering” BCA and Ms Westacott’s “failure”.
“I think the Business Council of Australia ought to either sack Jennifer Westacott or she ought to resign because the BCA have been arguing for this, the fact that the government’s failed to be convinced of it is a condemnation of the BCA,” he told Sky News.
“They are a major participant in the public debate but once again the BCA have failed to make any impact on the government or the public debate, these people have got no idea how to influence public opinion and it is not a failure of the government, it’s a failure of Westacott and the BCA ought to sack her rather than allow her to write articles in newspapers criticising the government and the opposition, quite frankly.”
Did we elect the BCA? Come on!
The one point on which I disagree with Tony Walker is that the polity understands how deeply reform is needed. Nobody has explained to them the importance of the end of the commodities boom. The property obsessed media is dominated by a narrative of Australian exceptionalism, that nothing can touch us. People sense it’s false but they have not had a leader explain to them why.
This is Malcolm Turnbull’s deepest failure. I suspect that PMT is being driven by the advice of pollsters who do not want a rerun of the Abbott Budget debacle, as well as being informed by an RBA and Treasury that genuinely believe that they have licked the mining boom and bust cycle so long as consumer confidence can be propped up.
Both are wrong. Abbott had a good process of many months of selling before a tough Budget. The problem was his ideas were wrong and trashed confidence. As for RBA and Treasury hubris, there is no way confidence can be held up while people’s standards of living are falling unless they have it clearly explained why it is so and how it can be fixed. Confidence will rise only with a plan that resonates with people’s experience. Treating them like mindless shopaholics is mindless.
One wonders where PMT goes from here. His timetable is short. He’s explained nothing. The agenda is slipping. And so is the economy. If he comes clean now that we’re in trouble and need reform to prevent worst case outcomes he’ll look like a panicked goose. But if he runs with his waffling reform debate and happy forecasts he’s going to be mugged by reality.
That popping sound you can hear is the end of the Turnbull bubble.