Manufacturing News

Grattan on Friday: The government wins on carbon – pity about the budget shambles

After the parliamentarians finally head off for the winter break, the government desperately needs the major win it had this week to flow through to the opinion polls – because it is struggling with head winds on so much else.

The Coalition at last ticked off the repeal of the carbon tax, the iconic item on top of its checklist, but it has had serious setbacks in this first fortnight’s sitting of the new Senate, which was marked by considerable chaos and the start of a dramatic erosion of the budget’s savings.

The repeal of the mining tax went through the Senate at 11PM on Thursday. But there were amendments to preserve associated measures – the schoolkids bonus, superannuation help for low income earners and the low income support bonus. The lower house, which meets on Friday, won’t accept the changes (amounting to a hole of some $7.5 billion in the budget period), leading to a stalemate.

The Senate has wrought havoc with the budget plan to give funds to the states for selling assets and recycling the proceeds into infrastructure, blowing another hole. The government won’t accept that either, although it says it will go ahead with providing money to the states.

Beyond any actual win, even one as significant as the carbon repeal, perceptions are crucial – the government has to try to convince the public it is on top of things, or at least on the way to being so.

The end of the carbon tax is a demonstration that Abbott can “land” a policy; it is totemic for the hard core Coalition base. It gave a fillip to the Coalition backbenchers, amid the glumness of the struggling budget.

The government expressed delight that Bill Shorten pledged to campaign on an emission trading scheme at the next election. “I can tell Bill we will hang this around his neck like a rotten, stinking carcass, right through to election day at the end of 2016,” Leader of the House Christopher Pyne told parliament.

But how important, after the initial flush of delivery, will the carbon tax’s repeal be in the eyes of ordinary voters, the swingers? Will their attention soon turn back to issues like the proposed rise in their health costs (though that is likely to be stopped by the Senate), squeezes on family benefits and the like?

An Essential poll on July 1 suggested a lack of passion about the fate of the carbon tax. It reported 33% believed it should be dumped and not replaced, 22% backed replacing it with an emissions trading scheme, 9% preferred the Liberal’s “direct action” plan and 16% said the government should keep the tax.

Voters, whose limited faith in promises has been further shattered by Abbott’s performance, are likely to be sceptical of the government’s claim that the average household will be $550 better off.

It’s notable that Abbott stresses this is a Treasury figure, provided to the Labor government for the projected RISE in prices. Is he constructing a let out here? In a year’s time, if the benefit has been less than promised, he can blame Treasury or Labor or both.

Palmer has been centre stage in the new Senate’s first fortnight, dictating outcomes and setting the price the government has to pay if it wants to get its way.

Whether the fortnight enhanced or diminished Palmer’s authority is disputed; it is too early to get an accurate fix on whether, in the longer term, he’ll make the government’s task near impossible or just challenging (or indeed to speculate on whether he can keep his senators in the kennel as they mature beyond the puppy stage).

Palmer plays to the crowd publicly; privately he is both astute and pig-headed, used to getting his own way (or buying it) and apt to arc up when he doesn’t.

His attacks on Senate staff, because Clerk Rosemary Laing advised his amendment to the carbon legislation would be unconstitutional in its proposed form, were bullying behaviour. Senators across parties, notably excepting the PUPs and their ally Ricky Muir, reaffirmed their faith in Laing’s professionalism, in effect a public chastisement of Palmer.

One unexpected success for the government this week was the deal with Palmer to save from disallowance the Coalition’s changes to Labor’s Future of Financial Advice legislation. Palmer got minimal extra guarantees for consumers, while being able to claim a victory. He did the long negotiation himself.

Finance Minister Mathias Cormann had Malcolm Turnbull (who enjoyed that celebrated Chinese dinner with Palmer earlier this year) put some pressure on the PUP leader.

Cormann’s week was a good deal better than that of Treasurer Joe Hockey, whose threat of new cuts if the Senate didn’t behave achieved little beyond giving fodder to the opposition.

The battle to get budget measures through will intensify when parliament resumes in late August.

One question in Green circles recently has been how much pressure leader Christine Milne will come under over her party’s decision to oppose the reintroduction of fuel excise indexation (after initial indications it would go the other way).

Within the Greens’ rank and file there has been a lot of concern at the stand that’s been taken. It will be debated at the Greens’ national council in Sydney this weekend. Questioned on Thursday, Milne said the parliamentarians made decisions about legislation, informed by discussion with the membership including at the council. It would be an interesting situation if there was a strong view at the council opposing the parliamentarians’ stand, but Milne gives no sign of another reversal (which would be embarrassing though good policy) and some Green sources insist the dissent is only a small push.

After Thursday’s carbon victory Environment minister Greg Hunt sent a text to Tony Abbott saying “Factum Est” (It has been done). It was well publicised, designed as a celebration of the moment.

If only, the government might think, Joe Hockey could sent his boss a “factum est” text.

As things stand, Hockey would have to be texting: “A fronte praecipitium a tergo lupi”. (A precipice in front, wolves behind.)

Listen to the latest Politics with Michelle Grattan podcast, with guest Senator Sam Dastyari, here.

The Conversation

Michelle Grattan does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

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