Budget 2017: greatest risk stalking Coalition is infighting

Remember when Julia Gillard and Wayne Swan promised untold billions of dollars to deliver nirvana within our shores? It was only five years ago, when Gonski was a slightly obscure surname and the NDIS was a meaningless collection of letters.

Now we all know Gonski came to represent unprecedented federal generosity delivered into the bursary of every school in the land and the National Disability Insurance Scheme aims to ensure every Australian in every state can receive equal and excellent care and support. Like motherhood, these things were hard to oppose.

But they cost a bomb in the medium term, and in perpetuity.

Desperate to get into government, Tony Abbott dared not critique or oppose them from opposition. He signed up — knowing they were unfunded, expansive and expensive. Because no one dared to question the models or their effectiveness they have become part of the furniture.

If Abbott had survived and won the election he would have had to deal with this legacy issue — instead it has fallen to Scott Morrison and Malcolm Turnbull.

They have had enough of fighting; fighting the fallout from the 2014 budget, fighting the recalcitrant Senate and fighting the election. They want some love. So they have adopted Labor-style policies to fund Labor’s grand plans; a tax increase in the form of a higher Medicare levy and a hit on the banks in the form of a new levy. Higher taxes, higher spending.

Labor is left to make shrill claims it would not only spend the Coalition’s extra $19 billion on schools but probably another $22bn as well — from where this would come no one can say.

Turnbull and Morrison have probably gone a long way to achieving their main political aim — neutering Labor’s attacks and claiming the mantle as a government of fairness and empathy.

But what of their claim to be focused on budget repair? What about the downside risks to the economy if global growth stalls or our terms of trade fall? And what are their points of difference from Labor? It is not a compelling slogan: The Coalition — high taxing and high spending but not as high as Labor.

In fairness, the Coalition is delivering tax cuts for small business — cuts that Labor has previously advocated. It has also kept a lid on spending growth but is yet to envisage overall expenditure falling below 25 per cent of GDP.

Conservative elements inside the Liberal Party will be frustrated at a federal government implementing Labor’s agenda. But Turnbull had to deal with Abbott’s legacy of refusing to oppose Gonski or the NDIS; not to mention fallout from the broken promises of the overly ambitious 2014 budget.

Turnbull also needs to be popular. He justified rolling Abbott on the basis of prolonged poor Newspoll results. Now he has trailed for the best part of a year. His predecessor is noisy on the backbench and the Prime Minister probably feels he can’t afford to make hard decisions; whether or not they are necessary.

So the biggest political risk in this budget is not from the opposition or the public but from dissent it might foment within Coalition ranks. And the economic risk is blowing in the winds of global growth and stability.