News

Fri Oct 9

Anthony Albanese tries to climb an impossible mountain

Written by Michelle Grattan, Professorial Fellow, University of Canberra

Many people who know Mathias Cormann – let us except Malcolm Turnbull – will hope he wins his bid to become secretary-general of the OECD.

Not only is he well qualified, but it would be a feather in Australia’s cap.

He’s certainly no shoo-in, however. There are already multiple candidates, the pandemic will make campaigning complicated, and Australian’s record on climate change might be a negative.

But he’ll have strong government support and, given his meticulous organisational skills and network of contacts abroad, nothing will be left undone.

Finance minister throughout the Coalition’s term, Cormann is respected across the political spectrum, which has made him effective as the government’s “wrangler” of the difficult characters in the Senate.

His dour image conceals a lighter side, seen in Wednesday’s cameo appearance on the ABC’s “Mad as Hell” as he jested with his “spokesman” Darius Horsham, a long-running character on the show.

Cormann’s October 30 parliamentary exit – the timing determined by the OECD’s process – is a significant loss for the government. But Scott Morrison was determined not to let it become a disruption.

Morrison has filled Cormann’s shoes even before his minister has stepped out of them, announcing Simon Birmingham will take over the finance portfolio and Senate leadership when Cormann goes.

The PM said he’d make no other changes at that time, but there’ll be a reshuffle at year’s end.

Birmingham will then shed his trade ministry, and Morrison will have the opportunity to make other alterations to his team. With aged care set to be a mega issue after the royal commission reports in February, one thing he should do is put a heavyweight into that portfolio and elevate it to cabinet.

Thursday’s small shuffle was a side show in the major play of the week, which saw a budget with a deficit of $213.7 billion this financial year that gambles on being large enough to get the country marching to recovery.

It will take months to judge whether the government has pitched its budget well (and that’s assuming no new seismic setbacks), but it is satisfied with the immediate reception. Income tax cuts are likely to be popular even if their critics argue other measures would be better. Business can only welcome the massive incentives to invest, although many enterprises won’t survive to take advantage of them.

Labor has given its support to the huge tax concessions for business in Josh Frydenberg’s second budget.

This ease of passage is in sharp contrast to the company tax cuts in then treasurer Scott Morrison’s first budget, which embroiled the Turnbull government in a debilitating fight from 2016 to 2018. Even Cormann couldn’t wrangle the big business tranche of those through the Senate; it was abandoned in the final week of Malcolm Turnbull’s leadership.

The budget has come under fire on various fronts – for example, the wage subsidy for younger workers carries the risk of being rorted, and there’s criticism about the lack of assistance for older workers.

Nevertheless, it has been a difficult budget for the opposition to savage, given Labor is endorsing its core elements of income tax cuts and business concessions.

But one fertile area for the opposition has been the lack of specific assistance for women, many of whom have been particularly hard hit by the pandemic. They’re often in casual jobs, and in sectors with the biggest job losses (although Frydenberg pointed out women have been strongly represented in the restored jobs). Women have also carried a disproportionate load of home schooling.

Albanese tapped into this area of government vulnerability when he delivered his Thursday night budget reply.

The opposition leader had several imperatives to meet as he went into that speech. To produce some policy flesh. To set up an ideological difference with the government. To cut through to the public.

With possibly only a little over a year before an election, the opposition is under pressure to start rolling out detailed policies. Albanese’s promises to make child care more affordable (at a cost of $6.2 billion) and to modernise the energy grid (a $20 billion investment) were substantial commitments.

The child care policy will appeal to women in particular. The pandemic has made families, but especially women, even more aware how important child care is for them – the brief period of it being free only increased the appetite for a better system – and the budget didn’t respond.

The proposals Albanese put forward to boost skills and local manufacturing highlighted Labor’s message that it believes in using government as a driver of change, through prescriptions, procurement policy and other means.

Albanese proposes mandating that a certain proportion of workers on major government-funded projects should be apprentices and trainees. He even suggests this could be extended to government-funded sectors such as aged care – how practical that would be is debatable.

There wasn’t a detailed social housing policy but Albanese flagged Labor would invest substantially in this area – that’s spending favoured by many economists as well as necessary to improve lives.

While Albanese is at pains to argue he’d mobilise the power of government, Morrison has muddied this political water.

The budget might be heavily private-sector oriented (and from that vantage point, seen as ideological), but Morrison is also interventionist when it suits him. His so-called gas led recovery, and his identification of designated sectors in his manufacturing policy are examples.

In terms of the imperatives he was trying to meet, Albanese did produce some policy flesh but of the announcements, probably only the child care initiative is likely to achieve general “cut through”.

The danger for Albanese is that come the next election, if Morrison sees child care as a political weak spot, he’s likely to address it.

In his stress on child care and social housing, Albanese made his point that Labor had different priorities to the government’s. And we got the message about putting government in the driver’s seat.

But the picture of what an Albanese government would actually look like wasn’t clear – as it can’t be, because that remains a work-in-progress.

Nor did we get any comprehensive idea of how, if this had been a Jim Chalmers budget, Labor would be tackling the immediate crisis differently.

Albanese’s problem was that circumstances demanded too much of him in his budget reply. He had a fair crack at meeting those demands, but he couldn’t change the perception that the pandemic has made the opposition one of its victims.