Today’s Newspoll shows the Coalition still behind Labor on third party preference votes by 49/51 and indicates that only 41per cent think the tax-cutting budget was “good”. But the improvement in Turnbull’s Better PM rate to 46/35, compared with the 38/35 at the previous Newspoll, has led The Australian to present the poll as a major victory to Turnbull, to argue that the budget was “one of the most well-received …in a decade”, and to claim “the result maintains an electoral position for the Coalition that it has not enjoyed since September 2016”. It also says the result “builds momentum” for the five by-elections expected in early July (see Newspoll Shows No TPP Change on Budget).
However, the absence of any “bounce” in the poll after the supposedly well-received tax cuts, shows Turnbull’s improved polling has not been translated into an improvement in Coalition polling. Interestingly, The Australian’s National Affairs Editor offers sound reasons why the improvement may include that “Turnbull has been less noticeable”, has “avoided a major self-inflicted political crisis”, and has stayed “on message for more than 48 hours”. In short, he was previously acting in ways, and making decisions, which detracted some support from the Coalition but his passing of greater responsibility to Morrison may have helped lift support for the Coalition.
There is also the fact that today’s Fairfax/Ipso poll shows Labor’s TPP vote to be even higher at 54/46 per cent and only 38 per cent thinking they are “better off”, with 35 per cent thinking they would be worse off. This 54/46 result is based on how preferences flowed at the last election, which differ from how Newspoll recently decided to take more account of preferences shown in recent State elections, including an indication that more One Nation voters have shifted to increased favouring of preferences for the Coalition. My inclination is to conclude that the Newspoll result/assessment shows more support for the Coalition than there really is and that vice-versa applies to Fairfax (see Fairfax Poll Shows Coalition’s Reduced TPP).
The surprising aspect of assessments made since the Budget is that few, if any, commentators have offered an accurate account of the budget’s effect and the rubbishy explanations of it by Morrison and Turnbull. My own view is that, on this occasion, the commentators have put too much emphasis on the benefits from the tax cuts and to the changes in the structure of the tax system, and have implied much larger amounts are involved. I have already published some analyses in my last Commentary but the key point is that, over the next four years, total income taxes are estimated to increase by 26 per cent (from $305.4 billion to $383.8 billion) and they would only have increased by $11-12 billion more if there had been no tax cuts. Looking at total taxes, the increase is 24.7 per cent (from $ 416 billion to $519.6 billion) and would have increased by only about 2 per cent more in 2021-22 if there had been no tax cuts.
In other words there is a miniscule cut proposed in taxes and, even if all passed in the Senate, that will have a miniscule effect on GDP and employment.
Through letters and my Commentary I have attempted to expose this but only Quadrant has published the Commentary and only the AFR has published my letter (see AFR Letters on Budget), which regrettably understates the estimated increase in the tax burden by 2021-22 at $20 billion when it should be about $100 billion!