AFTER getting a serious bollocking from Ray Hadley on Thursday, Tony Abbott told the Sydney shock jock that he’s determined to be “a better prime minister with a better government and a more effective parliament next year than this year”. It’s a fine New Year’s resolution but can he execute it?
Despite Abbott’s constant repetition of the government’s successes, only the most deluded Coalition member would see 2014 as anything but a very bad start. The consistently poor polls tell the sorry story, let alone the speculation that, unless things transform, this might even be a one-term government.
If Abbott is to have the slightest hope of swinging the situation around, he’ll need to better grasp and define the domestic agenda, dramatically improve his own performance and that of Treasurer Joe Hockey, and contain the backbiting and discontent in the higher reaches of his government.
Hockey has been the real ministerial shock, in a bad way, of 2014. The treasurer’s position is pivotal, and unless Hockey can lift his game, Abbott can’t get a “better government”.
On Thursday, Hockey called for submissions for his second budget. “The government places considerable importance on receiving community views in developing its budget strategy and policies,” he said. Well that’s good, because in May its insensitivity to community opinion started the government on its disastrous road.
Hockey not just has to listen more, but he also has to understand ordinary people’s circumstances a lot better, so he can lace the important case for budget repair with greater empathy.
It’s politically impossible for Abbott to reshuffle Hockey. But neither of them can afford a second budget that has even half the first one’s bad fallout. And that’s not over yet. Early in the new year the government will have to re-engage with the Senate on outstanding items, especially its higher education deregulation and revamped Medicare changes.
But the 2015 budget and the remnants of the 2014 one are only the start of the problems confronting Hockey and Abbott next year.
Apart from an uncertain economic outlook, and the prospect of rising unemployment, there is the reform agenda – admirable in theory, a nightmare in practice.
The looming tax debate will be hard to handle, with the danger it could eventually end in not much at all.
Hockey was due to release a paper before Christmas, discussing the current system. This has been delayed until early next year. Then submissions will be called, with the process culminating in a white paper. That may not come before 2016 but the argument will be robust throughout 2015, with the future of the GST at the heart of it.
The government’s messaging – inadequate or misleading in many spheres – is particularly confusing about the GST.
Objectively we know the tax system is skewed and that more of the burden should fall on indirect tax, which means increasing or broadening (or both) the GST. But Hockey is playing down the prospect of change, saying the budget is in no shape to bear the burden of the significant tax cuts required in compensation.
If it had its druthers, the government would like to alter the GST. But it daren’t get out in front, especially given its low standing. And it has promised any plan would be put to the 2016 election. Whether it has enough political strength to lead serious tax reform must now be questionable – it’s like someone with lung failure entering a marathon.
It is also becoming obvious the government faces the wider predicament of having bitten off too much. Trying to reform the tax system while also aspiring to overhaul the federal system would be ambitious for a well-placed, popular administration. There are obvious links between taxation and federal-state relations but the federalism review sweeps far beyond that. Prudence might have dictated a more modest approach on federalism from the start; Abbott has recently indicated that only a limited amount of change may be possible.
More pragmatism – in this case in the form of greater ambition – is also called for on climate change, now an even more hazardous area for Abbott because it has become a high-profile battleground between Foreign Minister Julie Bishop, with ministerial responsibility for the international negotiations running up to December’s Paris climate conference, and Abbott’s chief of staff Peta Credlin, a hardliner on the subject. So far, Bishop is winning the points.
Apart from having to better manage issues, Team Abbott will have to transform style and communication to be a “better government” next year. Ministers remain agitated about the Prime Minister’s Office; restless backbenchers will increasingly kick up if the polls stay bad; the “friends and enemies” attitude to the media has become counterproductive.
But is Abbott willing to alter the way his office operates, both to get more pluralism internally and to soften its dictatorial approach externally? Can he improve his relationship with his ministers so the team operates more cohesively? Is he able to manage the backbench better? Can his propagandists ever get to understand the subtle art of persuasion?
Abbott, never popular, has squandered much of the capital of a strong election victory. Unless he can build some respect and credibility in 2015 he and his government will go from being in a big hole to facing a major crisis that could seriously test internal stability.