The 2014 budget was the Abbott government’s “biggest misstep” and the time for political “spin and slogans” or “exaggeration and oversimplification” is now over, Malcolm Turnbull has declared.
As the prime minister retreats from a series of key budget and economic policies without obvious alternatives – including reinstating previously axed industry assistance schemes – the man seen as his strongest leadership rival has pointedly remarked that governments seen as bad economic managers are usually thrown out.
Australia now needs an “evidence-based, spin-free, fair-dinkum debate about the budget position and what we should do to fix it”, Turnbull declared in a speech to the Brisbane Club, saying this put the spotlight on Tony Abbott and Joe Hockey as well as on Labor leader Bill Shorten and shadow treasurer Chris Bowen.
“The more fundamental problem the 2014-15 budget faced was that the public was not persuaded tough measures were necessary in the first place,” the communications minister said.
“We – and I include myself and every member of the government in this criticism – did not do a good enough job in explaining the scale of the fiscal problem the nation faces, and the urgency of taking corrective action. In addition there was a deeply felt sense in much of the community that our proposed budget measures were unfair to people on lower incomes when taken as a whole.”
“In my view the failure to effectively make the case for budget repair was our biggest misstep, because it was a threshold we never crossed,” he said. The failure meant the government had been unable to make its case and the opposition had been able to avoid pressure to come up with viable alternatives.
Turnbull said Australian governments “delivering good economic and fiscal outcomes are very rarely ejected” whereas “governments judged to be inept economic managers or presiding over recessions (even recessions caused by global events) on the other hand seldom survive the next election”.
As the prime minister comes under fire for announcing the reversal in policy on car industry assistance without any public consultation or reference to his own cabinet or party room, and for exaggerating its monetary benefits, Turnbull said the key to economic management was “that the public have confidence economic management is in safe and competent hands. That means policies need to be carefully thought through, painstakingly explained and be robust enough to withstand rigorous policy debate.
“As I have said many times, the time for spin and slogans is over. The Australian people want all of us in public life to respect them, by laying out the challenges we face clearly and accurately, not insulting them with exaggeration or oversimplification. They expect us to debate the options for dealing with problems honestly, transparently and with open minds.”
Turnbull said it was “in no way correct to say that the 2014-15 budget was a failure. Many measures, amounting to a net saving over the forward estimates of $16bn, have been passed. But we clearly haven’t been able to achieve the degree of fiscal repair and reform that was and is needed.
“A number of its most important measures, which would have generated savings over the forward estimates of more than $25bn, have been unable to secure support from the Senate crossbenches and have been abandoned or modified.”
His speech comes after Peter Costello, the long-serving former Liberal treasurer, also questioned the Abbott government’s claim that the intergenerational report proved its 2014 budget could have delivered ongoing budget surpluses, saying it was based on “very interesting” assumptions.
Costello also said the Coalition had conflicting economic messages and dismissed treasurer Joe Hockey’s recent suggestion that homebuyers be allowed to access their super.
But he praised the government for attempting to use the long-term focus of the intergenerational report to “reset” the economic debate.
