Abbott's Lost Some Skin, But It's Far From Terminal

How much political damage has the Abbott government sustained from its 2014 budget?

The short answer is: quite a lot.

The longer answer is more complex and more uncertain. What is certain is that the politics of austerity will now dominate much of 2014.

There is no doubt the government has been blindsided by the scale and ferocity of the budget backlash. The misjudgments seem to be a product of a combination of ideology and tactics. 

Ideologically, this is a government that has drunk deeply the neoliberalism Kool-Aid. From “price signals” to the “end of the Age of Entitlement”, this is a government that believes, in its bones, in the primacy of the market as a system for allocating resources. Smaller government is better government. If that means dismantling the last vestiges of Australia’s welfare state, well, so much the better.

The ideological obsession with smaller government and personal responsibility may explain the many tactical missteps that the Coalition has made in preparing and explaining the budget. When you’re committed to ending the age of entitlement, kicking under 30s off Newstart for six months can be thought of as a necessary measure to end a “culture” of dole bludging. Similarly, the $7 GP co-payment is simply elementary economics, imposing a behavioural nudge on a health service that the government thinks is being rorted.

This kind of thing worked in 1996, and many in the government clearly thought it would work again in 2014.

Unfortunately, the government has comprehensively failed to convince middle Australia of its budget narrative. The problem is not so much with the government’s premise – that there is a budget emergency – as with its proposed solution: wholesale attacks against the welfare state.

The rhetoric about Labor’s debts and deficits undoubtedly contributed to the Coalition’s victory in September, and it’s also true that it’s a message that plays particularly well to the Coalition base. And this is still the case: a post-budget Essential poll found that the majority of Australians (56 per cent) agree with the government that there is a “budget emergency”.

The problem for the Coalition is that the specific measures it’s proposing to fix the budget problem are far less popular. Health and education, in particular, are running sores.

The GP co-payment is a huge issue for the government, one it is manifestly struggling to contain. Doctors are unhappy, while patients are terrified. So effective has the government’s austerity rhetoric been, some clinics are reporting 20 per cent drop offs in consultations, even though the fee has yet to be introduced.

University fee deregulation is also a growing problem, and one that Education Minister Christopher Pyne shows no sign of getting on top of.

Pyne had probably counted on support from the big sandstone universities for the measure allowing him to play divide and rule with the higher education sector. But the government’s decision to couple fee deregulation to a 20 per cent cut in funding per student has scared the living daylights out of university vice-chancellors, who can suddenly see yawning deficits blown in their tuition fee income with no certainty of recouping the difference from cash-strapped, debt-shy students.

As for the students themselves, the inevitable hikes in HECS and HELP fees have kicked off a new era of student radicalism that promises to dog the public appearances of Coalition ministers for years to come.

The horrid reception of the budget has an ironic symmetry with Labor’s contortions over carbon pricing between 2010 and 2012. After winning the 2007 election with a clear mandate for action on climate change, Labor struggled to translate that sentiment into support for a price on carbon pollution. A majority of Australians continue to believe in global warming. Julia Gillard’s carbon tax nonetheless proved wildly unpopular.

And then there are the unforced errors. The Abbott government’s fortunes are not being assisted by the slow drip of scandal. The Coalition has already lost a highly regarded minister, Arthur Sinodinos, into the maw of the New South Wales Independent Corruption Commission.

The New South Wales branch of the party has lost a premier, two ministers and a number of backbenchers. Revelations of dubious fundraising activities have dogged Treasurer Joe Hockey, and now the nominally independent Speaker, Bronwyn Bishop.

To top it all off, Abbott’s family has been drawn into controversy, with the revelation that his daughter Frances had secured a lucrative secret scholarship to a private design school. Unfortunately for Abbott, it’s the sort of thing that voters remember, because of what it says about the privileges enjoyed by the rich and well-connected, even while ordinary Australians are forced to pay more than ever for a basic education.

How different the political environment looks now, compared to the heady days of September! While we should be wary of placing too much faith in opinion polls, they tell a remarkable story of a government that has squandered nearly all of its early political capital in just nine months.

Tony Abbott is personally polling at disapproval levels rivaled only by Julia Gillard and Paul Keating at their nadirs. To put it in perspective, Kevin Rudd was never as unpopular as Tony Abbott is now.

And all of this has happened without any noticeable improvement in the organisation or policy platform of Labor. Bill Shorten is hardly setting the world on fire as Opposition Leader, and the much-needed internal reforms that Labor must push through if the party is to survive into the 21st century are still in their infancy. For the Coalition to trail a Labor Party it so soundly thrashed less than a year ago is a startling development indeed.

It all adds up to a government that has sustained serious injuries. But lefties and progressives would be wise not to pop the champagne corks just yet. The Coalition has stumbled repeatedly since taking office; new governments often do. But it would be foolish to assume that the government will continue to make errors, or that voters are permanently alienated from it.

In particular, it would be unwise to predict the demise of Tony Abbott as Prime Minister. While his unpopularity is certainly weighing the Coalition down, there seems little chance that the Coalition party room will panic in the same way that Labor’s did.

As long as Abbott enjoys the support of key factions in the party – which he manifestly does – then he is safe in the medium term. Left-leaning voters who love the idea of a Malcolm Turnbull prime ministership ignore the brutal fact that few in the party support him. As long as key powerbrokers like Christopher Pyne continue to support Abbott, he will remain in the Lodge.

It’s quite easy to construct a scenario in which the government recovers from this disastrous budget to comfortably win re-election in 2016. Sitting governments enjoy tremendous powers of incumbency, and vast resources to help them advance their cause.

We’re already seeing a little of this with the decision by Mathias Cormann to pull the trigger on government advertising in support of the budget measures.

The Coalition has the unswerving, although increasingly anaemic, support of certain sections of the media, particularly News Corporation. Voters have also shown they will reward governments they see as taking tough decisions, at least under certain circumstances.

Put simply, there is no reason to believe the Abbott government’s current unpopularity is terminal. Tony Abbott is not necessarily doomed to a single term. Politics is far too unpredictable for that. At the very least, we should never underestimate the ability of the Australian Labor Party to shoot itself in the foot.