Foreign Correspondence

[fuagf]

Anti-Kevin: a great big new trick
LENORE TAYLOR
May 15, 2010


Illustration: Michael Mucci

Kevin Rudd - who the Coalition once accused of sneaking in to power by pretending to be
John Howard lite - unveiled a $2.5 billion training policy in his budget speech in reply in 2007.

Tony Abbott - who as a minister developed a reputation for big-spending
crash-through policy ideas - used his budget speech in reply to paint himself as the anti-Kevin.

Abbott has framed the next election not around what he is but what he is not, not around what he will do but what he will not do - particularly the fact that he will not support the resource super profits tax, and that he won't spend as much money as Labor.

Understanding (as Labor never has) the virtues of concentrating on One Big Thing, the Opposition Leader used his speech to confirm he would oppose the mining tax and repeal it in government, and that he would not proceed with all the things the government says the mining tax will pay for - including policies that would normally wow a conservative politicians' argyle socks off, like cutting the company tax rate, superannuation concessions and small-business tax breaks.

It was a new direction, the culmination of a crucial strategic discussion in shadow cabinet on Wednesday night, where the traditional option of announcing a major spending initiative in response to the budget - including Abbott's career-long cherished policy of payments for stay-at-home mothers - was considered and rejected.

This was not how the Coalition leader - who former cabinet colleagues have said ''never understood the meaning of being a fiscal conservative'' when in government - had envisaged things turning out.

And it does not sit entirely easily with his already chosen advertising slogan - that he stands for ''real action''.

In his 2009 book Battlelines Abbott specifically argued that before this election the Coalition should go for big-spending policies on education and health and family payments, and not be deterred by ''the coalition's traditional prudence with public money''. He argued the Coalition had to be a vibrant alternative, a big target, in order to win.

''First-term oppositions can't normally wait for the government to lose. New oppositions normally need … some attention-grabbing policies … even the most prudent governments should know when to spend as well as when to hoard.''

According to sources he ''opened debate'' at the shadow cabinet meeting on Wednesday by asking ministers what they thought the Coalition's budget response should be and, after a long discussion, ''the economic ministers prevailed'' over the initial, and more traditional, spending instincts of the leader.

It is a strategy with significant risks.

The Coalition can - and will - announce new policies. But everything it does until the election has to involve undoing something proposed by the government. For every winner it creates, it will also create a loser. And, for the most part, it will be arguing about the things it is not going to do, rather than shiny new initiatives.

The strategy makes it crucial the Coalition's sums add up, which so far they do not seem to, although it is a little hard to tell because it has not shown us any of its own detailed calculations.

Abbott announced on Thursday that ''the Coalition would not proceed with the budget increase to the renewable energy future fund and will cut government advertising by 25 per cent'' and that ''these savings will pay for the Coalition's direct action on climate change policy, the green army and the retention of the current private health insurance rebate''.

The renewable energy future fund contains $652 million over the next four years. Government campaign advertising is about $150 million a year, so a 25 per cent cut over four years reaps around $150 million. That is $800 million, which most definitely does NOT pay for a ''direct action'' on climate change policy that costs $3.2 billion, AND the blocking of the private health insurance rebate that costs around $2 billion AND the ''green army'', which has yet to be costed by the Coalition but which the government reckons will cost more than $2 billion.

And - even with Abbott's promised $4 billion saving from a public service hiring freeze - it certainly does not pay for the $15.7 billion the Minister for Finance, Lindsay Tanner, calculates the Coalition has committed to already over the forward estimates, a figure the Coalition disputes without providing an alternative.

Nor was it clear whether the promise to ''redirect'' the Building the Education Revolution funding through ''school communities'' would result in savings (as in schools not getting things they have been promised) or not.

''I am not saying we won't make adjustments to the quantum,'' Abbott said in one breath in a radio interview yesterday, but in the next: ''We will promise schools at least as much our way as the Rudd government is their way.''

Joe Hockey, who is apparently now Abbott's ''details guy'', will make a ''directional'' speech and announce more spending cuts in an address to the National Press Club next week.

There will have to be a lot of them because fighting the election as the party of fiscal prudence and small government means the Coalition is unlikely to want to introduce any more great big new taxes of its own on top of the $2.7 billion-a-year company tax levy to fund its parental leave policy (an impost Tony Abbott astonishingly dismissed yesterday as a mere ''pinprick'').

He will also build on Abbott's budget-in-reply speech attempt to change the yardstick by which ''fiscal conservatism'' is measured, from whether or not future budgets are in deficit or surplus, to how much each party is proposing to spend as a proportion of gross domestic product.

Abbott promised spending under the Coalition would be about 1 per cent of GDP lower than under Labor. The Coalition likes this new measure better for two reasons.

First, because it is determined to deny, or at the very least distract attention from, Labor's forecast that it will return the budget to surplus within three years. The return to surplus is crucial to Kevin Rudd's election narrative that he saved the nation from the global economic crisis and can guide it to recovery. The Coalition bluntly asserts that neither the budget forecast, nor the Treasury assumptions that underpin it, can be believed.

And second, because without the spending initiatives that are paid for from the resource super profits tax, the Coalition spending is from the outset close to 1 per cent of GDP lower than Labor's.

That's a starting line advantage, although it does not quite amount to the full 1 per cent, so to make good on the boast the Coalition will have to find yet another few billion dollars more in savings.

The centrepiece of the politics of being the anti-Kevin is being anti the new mining super tax, so the strategy also relies very heavily on the government being unable to reach accommodation with the miners. The way things are going that seems to be a relatively safe bet but, given that negotiations are under way even as the miners engage in public threats and anti-tax advertising, it cannot be ruled out.

The Coalition strategy also depends on winning the argument that the big mining companies really cannot afford to pay more tax, and that their threats of investment delays are real.

It is a strategy which would be impossible to contemplate if Labor had not used so much of its political capital in its first term, with things like the spectacular mismanagement of the insulation program and its new and nonsensical policy on the emissions trading scheme, which Rudd this week finally began to argue for with some vigour and passion, now that he has effectively dropped it.

In Battlelines Abbott says that ''while it is largely true that 'governments lose elections, oppositions don't win them', first-term oppositions can't normally wait for the government to lose''. In other words first-term governments normally have not done enough to anger or disappoint voters for first-term oppositions to coast in to power on the negative sentiment.

Now Abbott, or at least his colleagues, seem to have decided that first-term Labor is an exception to this rule, that Kevin Rudd has in fact angered and disappointed voters enough to lose, that they do not have to promise fistfuls of dollars to be in with a chance. That in 2010, being anti-Kevin might just be sufficient.

http://www.smh.com.au/opinion/politics/antikevin-a-great-big-new-trick-20100514-v4ch.html