Finance Minister Mathias Cormann sent a very strong signal on whether the government would persist with its company tax cut policy all the way to the next election. “We are absolutely committed to this plan,” he said.
Absolutely committed. Remember that.
The signal wasn’t to voters, however, but to Cormann’s colleagues, on the backbench and within cabinet, who feel that the byelection results show that the idea of handing so much money to multinationals and giant companies — including $17 billion to the hated big banks — is so toxic it should be dumped. Many of them have thought that for a lot longer than the last 36 hours. But Cormann, a true believer in the fictional economic benefits of company tax cuts, is having none of it.
The problem for the Finance Minister — a man but for whom this government would long ago have collapsed into a mire of abject incompetence — is that he himself declared that “the byelections will be a referendum on who has the better plan for a stronger economy and more jobs”. Now the referendum results are in, and they’re not exactly a ringing endorsement for a windfall for large corporations. It’s a lot like the Prime Minister declared: the byelections were a contest between himself and Bill Shorten. No one forced the two leading figures of the government to frame the byelections those ways, but they went ahead and did it.
If the government backflips, Cormann will find a form of words to cover himself, and he’ll repeat them with the same discipline and stick-to-itness that he brings to everything. But to get that backflip, colleagues are going to have to go through him. Who else stands with him is an interesting question. His fellow right-winger, Peter Dutton, who has a veto role over economic policy as well as anything he can shoehorn into his vast Home Affairs portfolio, might be eyeing his margin in Dickson even more nervously after the bath the LNP took next door on the weekend.
The other problem is that, as Alan Kohler correctly noted, the government has no economic policy other than company tax cuts. If they’re abandoned — if they go the way of Turnbull’s first economic strategy of agility and innovation — what’s the government’s economic agenda?
It’s a rather ironic problem given the government has presided over huge jobs growth and a surge in revenue that has brought the return to surplus closer. Wage stagnation undercuts the government’s bragging rights on jobs growth, but the fact that they haven’t been able to get voters to focus on this enormous success in growing employment is one of Turnbull’s and Scott Morrison’s major political failings — or one of Bill Shorten’s successes.
Pauline Hanson might save the government from this dilemma by backflipping yet again and deciding to pass the tax cuts (or some form of them), having agreed to do that earlier in the year. Shorten — who was supposedly in all sorts of trouble and facing the end of his leadership — made quick work of that in the early stages of the Longman campaign by linking Hanson to a $17 billion gift to the banks. Even by Hanson’s own non-standards of consistency and logic, another backflip would now be very difficult.
That just leaves the Business Council and its media representatives, like Michael Stutchbury at the Financial Review, still desperately investing in efforts to spruik the tax cuts. A government backflip will inevitably have ramifications for business donations to the Liberals. There are no easy options. At least Cormann has the benefit of sticking to his principles when his colleagues want to cut and run.
“The other problem is that, as Alan Kohler correctly noted, the government has no economic policy other than company tax cuts. ”
Yes. At the 2016 election, as Turnbull endlessly parroted his line about the “government’s strong economic plan for jobs and growth”, SOME of us were begging for journos, any journos, to ask what was in this plan beyond company tax cuts, and none of you sods did.
The protection racket for Turnbull to avoid scrutiny of his policies was astounding. No-one pressing him on his IR policy. No serious questioning of his scare campaign aimed at Labor’s negative gearing changes (but happy to parrot Turnbull’s lines about “Mediscare”). Godwin Grech couldn’t be mentioned. Climate change? Nope, because of journos believing that as long as Turnbull won in his own right without scaring the horses he could then deliver stuff he didn’t promise, so they’d better not ask him difficult questions (and hasn’t that worked well?), like Lenore Taylor’s repeated fantasy land insistence that Turnbull and Hunt were going to introduce a backdoor emissions trading scheme. It’s really hard to think of any scrutiny applied to Turnbull in the 2016 campaign, really, much like the collective lack of skepticism at Tony Abbott’s promises in 2013.
Arky has very good points, although no one has mentioned the massive spending on defence so-called: a lot of expensive military hardware. No one has produced data on its employment potential, although some have mentioned the Abbott refusal to keep peaceful manufacturing alive. I see a lot more jingoism from this government, in desperation against facts that funnily enough, a lot of Australians would prefer decent health systems, education, job training and [anti] climate change policies that can also be job creating. Whether the government has the nerve to continue its attack on unions [so Stalinist aka oligarchic] is moot. Arky’s question about the lack of scrutiny of Abbott/Turnbull is very serious too. There is no point criticising ABC journalism: they are pounced on viciously, but some political reporting in the Fairfax press is fatuous: the economic reporting is far better. The Fourth Estate is at a low ebb.
You stick to your trickle down guns Cormann!
You wouldn’t by any chance be the recipient, or not, of any medals would you?
There will definitely be a place in the sun and a nice big salary with bonuses for the Cormannator post parliament. Well done good and faithfull servant will be the cry from the cronies.
It’s early days. You can’t expect them to scrap these tax proposals the day after. That would look too much of a capitulation. Like most things in politics you have to resist for a while – What, me change policies? Never – until it can’t be resisted any longer and you have figured out the new spin.
Seriously Bernard. ” the government has presided over huge jobs growth”. Where?
Any idiot can create jobs growth just by importing 400,000 economic migrants every year to cover up the fact they have absolutely no ideas about how to create “jobs and growth’ other than the migration Ponzi scheme. And that’s exactly what the Liberals shave been doing.
The Romans had a word for the way they “presided over huge jobs growth” (to serve the upper classes) – roughly translated, we call it “slavery”.
I heard a huge slab of the jobs growth is desperate people taking a second job….
And the good news is, that “little extra” isn’t going to “paying off a mortgage” – because they can’t afford to buy a home…..
They’ll dump the tax cuts a couple weeks out from Christmas in the MYEFO, the mid-year ‘budget update’ that is usually squeezed in between overs in the first cricket test. It’s toxic policy. It’s bad economics. And it won’t do anything but create a bigger deficit and shovel taxpayers’ money into the pockets of multi-national corporations so they can buy back their own shares. Apart from that, it’s a wonderful plan – straight out of the Trump playbook.