19
May
2014

Pollings

Recipients of my commentaries in recent months will not be surprised at today’s polls, although I confess to them being worse than I expected if only because it is unimaginable to think that the present Opposition could win an election with who they have as leaders.

My assessment is that the worse-than-expected part mainly reflects the decision to break promises on tax increases: if promises were going to be broken, why not break them where action is really needed viz middle class welfare?

Where to now?

The usual suspects have suggested that, to restore the cuts of $80bn by the Commonwealth in health/education grants over the next ten years (almost all of which appears to occur after the next election), the states should propose a raise in the GST. In short, Australia should go down the European track of increasing the size of government by raising sales taxes step by step over time without unduly upsetting the electorate. New Zealand is on that track and has announced a(nother) 1 percent increase in its recent budget.

Fortunately a survey published in today’s Financial Review suggests that 66% oppose any such increase and it seems unlikely that any of the three states with elections coming up will support an increase – at least for the present. One would have hoped that the leader of the current small government party in Canberra would not have left open the possibility of  an increase, as Abbott has done. Having broken the agreements with the states on health and education,  the Commonwealth can surely break the agreement with the states on the setting of the rate of GST – after all the GST is a Commonwealth tax and can only be changed if the federal parliament approves.

My expected part of the bad polling comes from the Coalition’s failure to “sell” the case for a major reduction in spending on middle class welfare by publishing a document showing why and how this is justified well in advance of the budget and explaining why the age of entitlements is over. Instead we have experienced Coalition spokespersons talking in generalities, with limited back up and, then, when it came to decision time, a shirking from doing what is really needed. Fancy setting all below $100,000 as not to be harmed by a reduction in one of the benefits.

The publication of such document asap would be a step in the direction of restoring at least some of the lost polling. But it will require some use of facts by ministers in persuading the customers to buy the product. One can only hope that there are ministers with that capacity.