Miranda Devine: Malcolm has killed the zombies

THE 2014 budget was the rampaging Frankenstein’s monster which wrecked the Abbott leadership, and came close to killing off the Turnbull government at the last election, writes Miranda Devine.

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THE 2014 budget was the rampaging Frankenstein’s monster which eventually wrecked the Abbott leadership, and came close to killing off the Turnbull government at the last election.

The budget set about slaying the zombie spawn of 2014 once and for all.

It’s an admission that the Coalition has given up on the sort of fiscal asceticism that was supposed to be Liberal DNA, and instead has ­embraced the reality of a cynical public frightened by monsters, less willing than ever to give up gold-plated public services or trust that governments know what they’re doing.

Cartoon: Warren

It’s a sensible understanding that, “You have to take the people with you”, Treasurer Scott Morrison said.

It’s a decision by the government to stop bashing its head against the brick wall of a bolshie Senate ruled by populists.

“Having exhausted every opportunity to secure savings from our 2014-15 and 2015-16 Budgets, we have decided to reset the Budget by reversing these measures at a cost of $13 billion,” Morrison said last night.

If Malcolm Turnbull has struggled to shake loose the political legacy of his predecessor, this budget puts a stake through the heart of Tony ­Abbott’s economic legacy.

“It’s $13 billion of zombie measures having to be put down” is how one government staffer described the budget imperative. Zombie measures are the hotchpotch of policies and promises, on health, education and welfare, that the Senate has refused to pass.

Morrison boasts that the only people who will pay higher taxes are bankers and multinational companies.

Even policies that never made it to the Senate have haunted this government. The GP co-payment, a feature of the 2014 budget, strangled soon after birth, caused so much consternation in the community it was still showing up in polling in 2016.

It helped fuel Bill Shorten’s bogus ­“Mediscare” campaign, which Turnbull blamed for his near-death experience at last year’s election. This budget is aimed at neutralising Labor’s attack.

Lifting the freeze on indexation of the Medicare Benefits Schedule and legislating a new Medicare Guarantee Bill is a direct response to Shorten. But it’s also about making clear where taxpayer money is going, demonstrating that the Medicare levy pays for just one third of the cost of Medicare.

Miranda Devine. Picture: Peter Brew-Bevan

Another slain zombie is the 2014 budget’s 2 per cent deficit reduction levy. In its place is a 0.5 per cent increase in the Medicare levy, bringing the ­effective top marginal rate of tax down to a still eye-watering 47.5 per cent. The levy hike is supposed to fund the rest of the NDIS, the disability leviathan that eventually will dwarf ­expenditure on Medicare.

Apart from that, Morrison boasts that the only people who will pay higher taxes are bankers and multinational companies.

With a recovering economy, benefiting from company profits which climbed 65 per cent last year, thanks to increased mining profits, on the back of surging global iron ore and coal prices, courtesy of the Chinese, Morrison sees “potential for better days ahead”. He expects real growth to “rebound” to 3 per cent and wages growth up from 2 per cent to more than 3 per cent over four years.

He promised to “guarantee the essential services that Australians rely on”.

Morrison believes there is no public appetite for smaller government, so he aims to rein in spending growth, while trying to boost the economy, so the deficit pays itself off in four years, creating a theoretical surplus of $7.4 billion in 2020-21. Which, of course, we’ve heard before.

With the government unable to confront a public now addicted to cradle to grave health, education and welfare, spending as a proportion of GDP will remain stubbornly high, from 25.5 per cent next year to 25.2 per cent in 2021. Chastened by the legacy of 2014, Morrison now feels our pain.

“Not all Australians have shared in this hard won growth,” he said, appealing to the economic disenfranchised, Australia’s equivalent of Trump’s outsiders.

He professed empathy for those in “areas where technological change, globalisation and the end of the mining ­investment boom has had a significant impact. And it’s been a fair while since most hardworking Australians have had a decent pay rise.”

Then, in echoes of Kevin Rudd, he said the government must “tackle cost of living pressures for Australians and their families. We cannot agree with those who say there is nothing government can do”.

He promised to “guarantee the essential services that Australians rely on”.

For good measure he ­reminded cynics that he was responsible for “stopping the boats … something many said could not be done”.

Morrison had warned the budget would not “tickle the ears” of ideologues. And sure enough, financial pundits in the budget lockup in Canberra yesterday called it variously “socialism”, “Labor Lite” and a “budget that would make Wayne Swan proud”. Morrison’s retort: “The difference is we pay for our spending.”

But one thing is sure. Postcode 2600 will keep booming. Canberra and its bloated public service, which has prospered for a decade, under Labor and Liberal alike, can rest easy.

You want big government? You got it.