Politicians are scared of springing major reforms on us without seeking our approval first. But that’s how it has been done in the past, and contrary to popular belief, voters can get over it, writes Peter Brent.
Yesterday in Parliament, Christopher Pyne confirmed what Malcolm Turnbull had indicated last weekend: that the Federal Government will not take a GST increase to the 2016 election.
And why should they? Where is it written that any alteration to the GST must be publicly approved first?
Ideally, a change like this would not be taken to the ballot box before being implemented, but instead sprung on voters mid-term, leaving enough time for any shock and disappointment to subside before an election.
If that offends your democratic sensibilities, it’s how important change has usually come about in this country, despite popular tales about past political greats bringing electorates along with them.
For example, those Hawke-Keating “economic reforms” the political class gushes over today were not as a rule showcased before elections, but instead just announced and put in place, usually against the spirit, and often the letter, of their most recent campaign. The same with the Howard government, with one exception: the GST. That experience gave them such a fright they never dared anything like it again.
The 1998 GST election was a one-off, but there’s plenty of mythology about that too. John Howard and Peter Costello didn’t really convince Australians of its desirability. Their tax package remained unloved right through to polling day – for example, a Newspoll a week before the election found 40 per cent in favour of it compared with 45 per cent for Labor’s policy. That government was re-elected despite its GST, and would probably have enjoyed a more comfortable win had they not so lumbered themselves.
Our GST fetish can be traced back a quarter of a century to the 1993 election, when Paul Keating surprised most, including himself, by defeating John Hewson and Fightback!
So powerful was the lesson of Fightback! that in 1995 a recycled John Howard felt obliged to promise that not only would a GST not be introduced in his first term of government, it would “never ever” again be Coalition policy.
Once in office Howard changed his mind and took it to an election – and lived to tell the tale (albeit with, at 49 per cent, the lowest winning two-party-preferred vote in federal history; many a marginal seat holder wasn’t so lucky). And before every election since then both sides have sworn off any change to its rate or breadth. Such high-profile, unequivocal declarations make subsequent backtracking difficult, and even if a popular government was inclined to take a deep breath and do it anyway, recent Senates wouldn’t allow them.
The legislation also stipulates unanimous state government agreement before any change, but that can be overridden by Commonwealth legislation.)
In New Zealand, with no upper house or states, GST policy is not so elevated. In 1986, a first-term Labour government brought in a 10 per cent GST and two years later, in their second term, jacked it up to 12.5 per cent. Two decades on, in 2010, John Key’s first-term National government hiked it to 15 per cent.
None of these changes were taken to an election first. In the 2008 campaign, Key had promised no GST increase, but two years later opponents had to look hard to find the quote.
In the first and third cases (but not the second), the governments were easily re-elected. So it was rather like the Hawke government’s privatisation, deregulation and tariff reductions: swinging voters might have been miffed about the pre-election fibs, but when next casting their vote, reckoned that what’s done is done, it didn’t hurt nearly as much as they expected, and the opposition isn’t promising to undo it anyway. Eventually, added respect accrues to those leaders for making citizens eat their greens.
That was the idea of Joe Hockey’s 2014 budget, with its slew of broken promises, but most of the contentious elements never made it through the Senate, which delivered the worst of both worlds for the Abbott government.
Between now and polling day 2016, the opposition and media will demand that Turnbull swear that no Coalition government will ever increase the GST. Labor will campaign on “Malcolm Turnbull and Scott Morrison’s secret GST increase plan” anyway – with perhaps, given the government’s temporary evident openness to the idea, some success.
We’ll never know how a 2016 “GST election” would have panned out. This government is travelling better than Howard’s was before his 1997 GST announcement and Turnbull is more popular and a better fit for Australian voters than his shrivelled, rhetorically hemmed-in 1998 counterpart. Labor leader Kim Beazley, a former long-term cabinet minister, was widely liked, respected and trusted. Bill Shorten is no Beazley.
One dynamic of the 1998 contest, the broad perception that Labor in office had spent too much and could not be trusted with the economy, applies today – only doubly, triply so.
A rate increase is not as scary as a brand new tax. And an elector can oppose a policy without it necessarily determining her vote.
Turnbull has wimped it, but that’s understandable, given the public backbench rumblings. Political parties prefer to maximise their chances of survival.
Commentators who wail “reform is dead” tend to be selective in their outrage, but they do have a point.
Australian politics becomes more bitter and oppositional by the decade, major party support shrinks, and into the middle of our powerful upper house we plonk attention-seekers boasting the support of tiny sections of the electorate, reliant on stunts for re-election.
The GST contagion – any alteration must be taken to an election first – has already spread to workplace relations, courtesy of the perceived lessons of WorkChoices.
Will we get to the stage where no policy can become law if it wasn’t outlined during the last campaign – and even then the Senate might kibosh it, as it did Kevin Rudd’s emissions trading scheme?
In a better-functioning political world we’d already be munching on our 15 per cent GST, and we’d have an ETS.