High expectations for Scott Morrison’s budget means a high price for failure

I FEAR the government is headed for a cropper on Budget night, and Treasurer Scott Morrison’s job is not sustainable if he fails, writes Peta Credlin.

IN the short space of two years, Scott Morrison has gone from potential party leader to a treasurer on political death row.

Having shifted the block of votes needed to deliver Malcolm Turnbull the top job in the leadership coup, Morrison’s alliance with Turnbull has brought him no end of trouble.

While his performance as the nation’s top economic minister has been under justifiable scrutiny, the treasurer hasn’t been helped by the undermining and public slap-downs from other senior colleagues, least of all the prime minister himself.

For a man once considered a key part of the Liberal succession plan, Scott Morrison’s fall from favour has been dramatic.

Now more than ever, the government needs the budget to be a success.

Having lost 10 Newspolls on the trot and with high expectations that they’ll fix the problems of housing affordability, the leaks against the Treasurer don’t only destabilise him, they destabilise the Turnbull government.

What a difference two years makes. Easter 2015 marked the start of a crucial six months for Scott Morrison. With the boats stopped, he had been promoted out of immigration to clean up Australia’s welfare system.

The ambitious Sydneysider was initially unhappy with the move but later saw it as a way to burnish his leadership credentials by tackling the waste at the heart of the Commonwealth’s social security spending.

Close observers of Canberra saw Morrison as the coming man, the conservative most likely to take over from Tony Abbott when the time was right. He had built up a significant profile among Liberal supporters and he was a strong media performer.

However, while acknowledged for his retail skills, Morrison’s bullish manner and hyper self-confidence rubbed many colleagues up the wrong way. That he needed time, and a bit of humility, was the view of most people, including supporters.

When Joe Hockey’s last budget was delivered that May, Morrison’s childcare reforms were a key focus. The policy work was designed to boost much-needed productivity and get better value from government childcare spending that’s approaching $10 billion a year. But orchestrated undermining from the Turnbull camp meant the budget failed to give the government sustained clear air and by September 2015, Malcolm Turnbull declared 30 successive Newspoll defeats and a lack of economic narrative as the dual reasons he should seize the top job. He got it and promptly rewarded Morrison’s support with the treasury portfolio.

Throwing away the support of conservatives to back Turnbull when he was already the heir apparent was a major error of judgment by Scott Morrison.

The lead-up to the Turnbull government’s first budget the following May in 2016 was an unmitigated disaster with the PM and treasurer publicly raising policy ‘thought bubbles’ only to rule them out days later.

Along with Kelly O’Dwyer’s superannuation policy changes that sent older Coalition voters into meltdown, this ‘kite-flying’ was noted in the Robb election review as a key reason for the bad campaign start.

Fast forward 12 months, and it seems they haven’t learnt anything with the latest round of leaks showing a government racked by infighting and unwilling to heed the lessons of its 14 seat electoral loss.

Those disappointed in the Treasurer’s performance to date often refer back to his time as Tony Abbott’s immigration minister and ask ‘where did that man go?’

I worked closely with Scott Morrison in opposition and government as we worked up the plan to stop the boats, and then made it happen.

There’s no doubt he deserves a lot of credit but so does retired general Jim Molan who was the key architect of the detailed ‘Operation Sovereign Borders’ document and Tony Abbott’s former national security adviser, Andrew Shearer, who helped put the steel into public servant spines when the going got tough in the first few months of government; obviously so does the former prime minister too.

In those days, Morrison was surrounded by a team who had his back, in sharp contrast with today, when there’s as much effort spent undermining his efforts, as there is supporting them.

Like many treasurers before him, Scott Morrison (right, with Prime Minister Malcolm Turnbull) is susceptible to Canberra public service groupthink. (Pic: Gary Ramage)

While colleagues are entitled to query whether Morrison has more bravado than brainpower, at a time when the Turnbull government needs a strong budget in order to survive, the leaks and briefings are just sheer madness.

Like many treasurers before him (at least in recent times), Morrison is susceptible to Canberra public service groupthink.

Without an authentic economic voice of his own, he risks merely mimicking Treasury — the ‘experts’ that advised Wayne Swan on budget surpluses that never materialised — rather than test their ideas.

You’ve got to wonder who was the brains trust that said the Turnbull government should make this budget all about housing affordability when it’s an issue where, besides immigration and tax policy, the main policy levers rest with the states, and the market.

For every buyer hoping to get a home at a good price there’s a vendor wanting top dollar and no homeowner wants to see their biggest asset lose value.

What little the Commonwealth can do on tax in this area has already been ruled out and with expectations sky-high, I fear the government is headed for a cropper on budget night.

Of course if they were serious, they would significantly cut immigration because adding 200,000-plus new residents to the mix each year, especially when they almost always end up in our crowded cities, puts pressure on housing. (Under Tony Abbott, annual net immigration came down by over 40,000, but has gone up again since he was toppled).

As I know from experience, though, Treasury fights hard against any cut to immigration as it impacts the smoke and mirrors of their economic growth number.

Fewer immigrants equal lower growth or so goes the argument — even though what matters is actually growth per person; this was twice as fast under the Howard government as over the past decade, despite annual immigration that was only half as fast on average.

With a $319 billion debt problem, no real plan to cut the deficit and ballooning spending pressures on the back of Labor’s uncosted NDIS and Gonski promises, a ‘business as usual’ budget for the Turnbull government is just not sustainable.

Nor is the Treasurer’s job if he fails in under four week’s time.

Easter is the time for resurrection and I’m sure the Treasurer is praying for his.