Abbott’s maternity madness smashes economic credibility
Imagine you and I own houses and they both burn down in separate incidents. The government generously steps in offering to pay for new houses.
Now, yours was a modest timber framed unit no better than a shack because you are not wealthy. Mine, on the other hand, was a grand Taj Mahal of a structure with an indoor/outdoor pool and all the mod cons. Thus, I get a cheque for a $1.5 million to rebuild. You on the other hand, well you get a lot less. Let’s say, $185,000. Incensed? It’s a fair bet you would be.
Leaving aside the legitimate question of why it is the state’s role to use scarce taxpayer funds to meet your private costs anyway, the equity of the above scenario, or rather the lack of it, stinks. It is after all, like a reverse means test: the better off you are, the more you get from the government. No one in a position of responsibility would endorse this kind of thing right?
Perhaps this is why Tony Abbott assessed that his party-room would look askance at his proposed paid parental leave scheme designed to give parents earning $150,000 per year and above, $75,000 to stay at home for the first six months of a baby’s life whereas someone on $30,000 a year, would be paid on $15,000 to do the same job. He knew the shadow cabinet would go into apoplexy over his plan to fund it through a new tax on business.
He knew also that the same result would come from the party-room if he bowled it up there. So despite the fact that both groups were due to meet in the next 24 hours, he jumped. Forcing their hands, he unveiled the policy unilaterally. It was, he told his startled MPs the next day, ``a leader’s call’‘. Sometimes it is better to seek forgiveness than permission, he added, in characteristically biblical, Abbott style.
As a way of operating, it was nothing if not decisive. Bold if not brazen. Calculating, if not devious. But mostly it was just plain crazy. Coalition MPs were pincered between rebuffing their new leader in an election year or embracing a policy fundamentally at odds with Liberal Party precepts. Some were able to be talked into submission on tactical grounds alone. According to this view, the surprise announcement was a master-stroke because it stole the oxygen from Kevin Rudd’s massive hospital take-over plan announced just days before.
Still more liked the policy itself because it offered 26 weeks with full salary and superannuation maintenance. From a popularity standpoint, they reasoned, it trumped Labor’s 18 weeks on the minimum wage and made Kevin Rudd look parsimonious into the bargain. Here was a way into the hearts of Labor’s ``working family’’ base, and particularly those of women voters - a key demographic with whom Mr Abbott was suspected to be on the nose.
But plenty were still miffed. At the party-room meeting, some 18 MPs arc-ed up. Curiously most were angry at being left out of the loop rather than with the merits of the policy itself. The minor upwelling was led by the intemperate fire-brand, Wilson Tuckey. Tuckey, you’ll remember, was the Guy Fawkes who eventually succeeded where his namesake failed, by blowing up Malcolm Turnbull’s leadership. Tuckey’s beef expressed publicly and often, had been that the millionaire republican had failed to bring the party-room with him.
So it should have come as no surprise to Tony Abbott, the direct beneficiary of those agitations, that Tuckey again led the charge against signs Abbott was headed the same way. In the end, Abbott promised not to do it again. But don’t be fooled into thinking this has quelled the discontent. Many senior Liberals remain outraged and now that outrage is with the policy itself. One MP, who wished to remain anonymous, said unhappiness in the party-room was deeper than had been reported. ``You would be hard-pressed to find anyone serious who likes it… it is not just seriously bad policy, it is completely nuts,’’ the MP said. ``We will get absolutely flayed. ``Rudd and Gillard will have a field day with this, it was unbelievably stupid and crazy’‘.
Another senior figure agreed saying the idea of applying a new tax on business right when all the momentum is for cutting taxes to encourage employment, was stupid. ``This was our logic for workplace reform and a lot of other things we did - to cut costs and drive investment and employment, this goes the other way’‘, the MP said. One Canberra insider, was even more scathing. ``If Kevin Rudd had proposed this, a new tax on the most successful businesses, the Liberals would have condemned it as the worst kind of European socialism’‘.
Of course, what some MPs were reluctant to say even privately, former treasurer, Peter Costello said publicly this week. To Abbott’s chagrin, the party’s most respected economic figure described it as ``silly’’ and Mr Abbott of engaging in ``a race to the bottom’‘. Costello said he’d been to a lot of Liberal Party meetings in his time, but never once heard anyone argue for higher taxes. Ouch.
Most worrying for Liberals is what the policy and, for that matter, its idiosyncratic release, says about the current leadership. As Labor keeps reminding us, Tony Abbott is a man who once described economics as boring. While many voters would agree with the sentiment, they expect their political leaders to get across the dismal science and to make policy driven by sound economic principles.
Yet this policy betrays the opposite on both counts. This is why the Government is openly likening the Liberal leader to Mark Latham.
Liberals everywhere are buoyed by their return to the competitiveness as shown in successive opinion polls this year. But they would be less happy about how this policy went down. Generous though it may be, Newspoll showed it was not cutting through with voters.
There is a growing nervousness that like Latham, Abbott’s rise is in danger of plateauing, of topping out well before polling day as the weight of contradictory policies and an over-eagerness to fight rather than make good policy, scares voters off.
For Tony Abbott now, the task must be one of trust building and consolidation. He must find a way to counter the ``Abbott is a risk’’ line being peddled against him. Unfortunately, brand new taxes to fund transparently populist policies you are known to despise, are more likely to result in your own house burning down than your opponent’s.
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