Dutton sharpens practical and philosophical divide

Peter Dutton’s budget reply speech promised “lower, simpler and fairer taxes for all – because Australians should keep more of what they earn”. We agree, and when he unveils the policy details, which he must do in good time for the next election, we hope he makes cuts to uncompetitive company tax, for businesses large and small. While blatantly pitching for popularity – such as reducing immigration by 25 per cent and imposing a two-year ban on foreign investors and temporary residents buying existing homes in Australia – the Opposition Leader’s grab-bag sets out worthwhile markers for tackling some of the nation’s most serious problems, such as poor productivity and workplace relations. Jim Chalmers in his budget speech did not mention productivity. Mr Dutton also said too little, apart from broaching the issue of industrial relations. Unlike Labor, which has pursued a complicated alternative economic orthodoxy to the approach that has stood Australia in good stead for 40 years, Mr Dutton has put forward a straightforward, pragmatic narrative.

Since John Howard’s defeat in 2007, successive Coalition leaders have been too timid to pursue industrial relations reform. The rigid centralisation inflicted by Anthony Albanese and Workplace Relations Minister Tony Burke now makes this a no-brainer. The ACTU will be sharpening the knife but, in the national interest, Mr Dutton’s determination to “remove the complexity and hostility of Labor’s industrial relations agenda, which is putting unreasonable burdens on businesses”, is important. His pledge to “revert to the former Coalition government’s simple definition of a casual worker and create certainty for our 2.5 million small businesses” is a good start.

After the Albanese government’s relentless drive to increase the government’s footprint in the economy, Mr Dutton is on the right track envisioning a more liberal mindset, including tax reform, that gives Australians greater control over their own lives and finances. He has built on an important Coalition policy from the 2022 campaign, allowing homebuyers to invest up to $50,000 of their superannuation savings to help with buying their first homes. Extending that measure to separated women to help restart their lives makes sense, with the money withdrawn from super to be returned to support retirement. Further increasing the amount older Australians and veterans can work without reducing pension payments also makes sense, for those individuals and to help deal with workplace skills shortages.

At this stage, the sharpest practical divide between the two political sides is over energy policy. Mr Dutton’s argument that green hydrogen and critical minerals projects should stand on their own without $13.7bn in taxpayer subsidies makes sense, as does cutting red tape and speeding up approvals processes that are too slow. Soaring power bills, as he argues, will easily swallow up Labor’s $300 un-means-tested rebate. A three-fold increase in the number of manufacturers that have shut up shop or moved offshore in two years, he said, stemmed from rising energy prices.

Mr Dutton posed an important question as regards Labor’s renewable energy drive. That is: Who will bear the $1.3 trillion cost of rewiring the nation? Answer: “You will. Farmers will. Manufacturers will. Businesses will.” In standing by the opposition’s policy of nuclear power, Mr Dutton, too, will face hard questions about cost and the ability of current technology for nuclear power to help carry baseload energy requirements. As we have argued previously, it is a debate worth having. And given Australia’s uranium resources, it is long over due.

Mr Dutton’s criticisms about runaway spending under Labor are well-founded. But we need to hear far more about where and how he would curtail it. His budget reply offered a different vision to current policy directions, including IR. That is good. But costed detail is needed.