March 17th 2012

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Articles from this issue:

COVER STORY: Two Melbourne academics want infanticide legalised

QUEENSLAND: Election outcome could derail same-sex marriage push

MEDIA: Journalists scandalised by family lobby's tactics

CANBERRA OBSERVED: Abbott's pre-election commitments come under scrutiny

EDITORIAL: Bob Carr's appointment will destabilise Labor

MEDIA INQUIRY: Finkelstein's Monster: a media horror story

POLITICS: Is GetUp! a democratic organisation?

POLITICS: Daniel Hannan: future prime minister of Britain?

IRAN: Iranian opposition pleas unheeded by Obama

INTERNATIONAL TRADE: The case against floating exchange rates

PARENTING: Caring for terminally-ill unborn babies

SCHOOLS: Gonski report penalises non-government schools

OPINION: Russia and the West reverse roles on Christianity


CINEMA: Marilyn's mystique mesmerises still: My Week with Marilyn (rated M)

BOOK REVIEW From Vinegar Hill to the mountains of Afghanistan

BOOK REVIEW Excommunicable heresies

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Abbott's pre-election commitments come under scrutiny

by national correspondent

News Weekly, March 17, 2012

Tony Abbott is about to face an uncomfortable period of intense scrutiny over his fiscal credibility as Labor refocuses its artillery back on the Opposition instead of on itself.

And the pressure on Abbott to explain his saving and spending strategy is likely to come from his own side of politics and from the business community, which is starting to look closely at the distinct possibility of an Abbott-led Coalition Government in 2013.

Into the mix comes Treasurer Wayne Swan who has decided to take the populist route of trying to demonise Australia’s trio of resource billionaires — Andrew “Twiggy” Forrest, Clive Palmer and Gina Rinehart — as greedy tycoons and label them “threats to democracy”.

Mr Swan is attempting to play into the prejudices of everyday Australians who live in a world where it is an ongoing challenge to balance their own household budgets and run their own small businesses in good times and bad.

However, it is not certain the tactic will work because Australians are broadly of the view that mining is currently underpinning the nation’s wealth, and that class warfare, if it is not a thing of the past, has certainly dissipated during the current boom times.

The high dollar may not be great for farmers and manufacturers, but it does make imported goods cheap and overseas holidays affordable.

At the same time Mr Swan is trying to depict Mr Abbott in this political melodrama as the cat’s paw of the greedy tycoons and on the side of wealth and privilege.

After all, it is Mr Abbott who is trying to repeal the mining resource rent tax (MRRT), so opposed by the tycoons, thereby denying ordinary Australians a share in the mining boom, goes the Swan mantra.

Mr Abbott would have none of that and declared Mr Swan’s views as “half-baked neo-socialism”.

“They are wealth-creators, Wayne Swan is a wealth-waster,” was Mr Abbott’s riposte.

However, it is likely the blowtorch will be applied more directly to Mr Abbott over the coming weeks.

And his vulnerability is on fiscal policy. Mr Abbott has declared (“in blood”) that he will repeal the carbon tax, as well as the mining tax.

The carbon tax has been devised by the Gillard Government to pay for tax cuts for low and middle-income earners, while the proceeds from the mining tax are meant, in part, to be used to increase higher employer superannuation levies.

Mr Abbott proposes to deliver the tax cuts and the super benefits to match the Government’s handouts, but without apparently relying on any extra revenue from the new taxes or any other taxes.

At the same time, he has promised to get the Budget back into balance faster than Labor, and to deliver on a generous expansion of the welfare budget to include six months’ paid parental leave.

And, finally, he has recently re-pledged the Coalition’s commitment to the Baby Bonus and more recently to a universal 30 per cent private health insurance rebate after the Gillard Government finally got the numbers in the Parliament to trim eligibility.

The reining in of the private health rebate is likely to save the Government $2.4 billion over three years.

It is hard to quantify all these pledges, but they certainly amount to tens of billions of dollars, which is why there is growing consternation and bickering among Abbott’s finance team, namely Joe Hockey and Andrew Robb.

Mr Abbott defended his refusal not to trim middle-class welfare along the following lines: “The private health insurance means-test is an attack on middle Australia; the means-test on the baby bonus and childcare benefits — these are attacks on middle Australia from a Government which is against people who want to do a little bit extra to get ahead.”

This may be true, but Mr Abbott is setting himself up for the mother of all “where’s the money coming from?” campaigns.

The Coalition has declared it will cut 12,000 public servants, but has not nominated any areas of government, apart from climate change, which will be wound back.

It is true there has been a lot of waste under the Rudd/Gillard Governments, but most of the achievable savings are in transfer payments — pensions, superannuation concessions, welfare benefits and family payments — areas that set off howls of fury if touched.

Sooner or later, something will have to give.

The question is whether Mr Abbott opts to take the hits now by announcing areas where a government he leads would cut, or wait until closer to the election.

Either way, he will have to come up with a credible and cohesive Budget policy and the Gillard Government knows it. 

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