Coalition MPs want Trump-style ‘Australia first’ economics pitch

Coalition MPs are pushing for bolder “Australia-first” populist policies in the wake of Donald Trump’s victory in the US, as an influential conservative think-tank questions the party’s economic vision.

Opposition Leader Peter Dutton and treasury spokesman Angus Taylor spent the early part of this week in shadow expenditure review committee meetings as the party prepares to roll out proposals on home ownership, using gas to lower energy bills and broader economic plans before an election due by May.

Opposition Leader Peter Dutton and shadow treasurer Angus Taylor are facing questions from their own party about their economic agenda.Credit: Alex Ellinghausen

In an ad campaign launched on Thursday, Dutton and Taylor emphasise the opposition’s philosophical attachment to smaller government after months of promises to peg back spending to reduce inflationary pressures.

The Coalition has overtaken Labor in surveys on economic management, but Taylor is still contending with pressure from MPs who want more policies and more ambitious pledges on items such as income tax cuts. Some MPs worry the Coalition does not have a compelling plan to combat Labor’s claims of economic success if the Reserve Bank lowers interest rates.

Trump has pledged to slash taxes, regulation and climate change targets to spur jobs and growth – while also proposing significant tariffs on overseas goods.

Institute of Public Affairs senior fellow John Roskam, a respected figure in Coalition circles, said presently the Coalition “lacks any sort of economic narrative”. The IPA is an important ally and ideas factory for the Coalition.

“MPs want to know whether there’ll even be a tax policy for them to sell,” he said.

Conservative writer and IPA fellow John Roskam.Credit: Matthew Bayard

“There’s a belief in the Coalition that the Australian public isn’t ready for an honest discussion about the country’s economic condition. Australians have become accustomed to ever-growing government spending, which is a big problem for the Coalition. The scars of Joe Hockey’s and Bill Shorten’s failed attempts at tax reform run deep.”

“Trump’s economic populism can’t be translated to Australia – we won’t win a tariff war. But Dutton can learn from Trump that working-class voters will listen to an economic argument.”

Dutton has made the question “are you better off after three years of a Labor government” central to the Coalition’s campaign pitch. It’s a line that echoes Trump’s campaign and other attacks on incumbent governments during a global inflation outbreak.

Labor has delivered two surpluses, largely due to a commodity price boom, but the opposition and some economists have accused Labor of putting too much money in the economy when the Reserve Bank has called for restraint.

The Coalition has suggested it will not offer income tax cuts at the next election, and has not yet released plans for industrial relations and productivity.

The opposition’s economic pitch has included few costed policies and instead prioritised more general pledges, such as lowering spending via a fiscal cap and a rejection of about $100 billion worth of Labor spending on energy, national reconstruction and housing funds.

Taylor said the Coalition had been brave to oppose such spending and take on political heat for doing so, adding that the plan to shift to nuclear energy was evidence that the party was prepared to back ambitious, big-picture policies.

“In modern politics, these weren’t easy decisions to make, but they were the right ones for our country. It is the only way we can sustainably bring down inflation,” Taylor said.

The opposition’s first economic policy of the year – a tax deduction for business lunches – was welcomed by small business groups but panned on Wednesday by Treasurer Jim Chalmers, who claimed his opponents had no ideas other than one to “get taxpayers to fund long lunches for bosses”.

George Washington University assistant professor Steven Hamilton, a prominent Chalmers critic, also dismissed the lunch deduction as “straightforwardly bad tax policy as it uses taxpayers’ money to incentivise overconsumption inside small businesses”.

One MP, who declined to be named so they could speak frankly, said the opposition’s focus on national and domestic security issues such as antisemitism was important and effective but the lack of focus on cost-of-living gave the impression the Coalition was a “one-trick pony”.

“People want a bold policy proposal every now and then. That was one of the appeals of Trump: he throws up big ideas and they cut through. We need some Australia-first economic proposals that people understand and make us relevant to aspirational voters,” the MPs said, nominating a new crackdown on corporate tax avoidance to set the opposition against the big end of town.

Another senior MP said Taylor had done well to focus on Labor’s spending, but added: “If the RBA cuts rates in February or April, or both, what’s our selling point?”

Frontbencher and former Nationals leader Barnaby Joyce, who opposes the Morrison-era commitment to net zero, said it was clear that cost of living was the only issue in town.

“The power debate is so crucial,” Joyce said.

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