Joyce saga a distraction from economic debate

The scandals and questions generated by Barnaby Joyce’s personal life, his rent-free living arrangements, his approval of two taxpayer-funded jobs for the woman who is now his partner and his political judgment have distracted political debate from the government’s core business, including economic management. On Thursday, the announcement of another record-breaking month of jobs growth barely registered, despite a further 16,000 positions being added to the economy in January. The result lifted total jobs growth over the past 16 months to 492,000. Malcolm Turnbull and Scott Morrison tried to play up that achievement but the Joyce saga was too salacious and politically damaging to be pushed out of the limelight — especially after the slanging match between the Prime Minister and Mr Joyce exacerbated an already parlous situation. Mr Turnbull’s frustration will be compounded today by the 27th consecutive Newspoll showing the Coalition trailing Labor.

The Joyce saga is biting in National Party heartland, especially in Queensland, with support leeching to One Nation. After a stronger showing in the first Newspoll of the year a fortnight ago, the government has slumped back to where it was at the end of last year — trailing Labor 53-47 on the two-party-preferred vote. Mr Turnbull’s lead over Bill Shorten as preferred prime minister has been halved from 14 to 7 percentage points.

Unless the Coalition can clear the air surrounding Mr Joyce before parliament resumes in a week’s time, it will continue to struggle to sell its successful economic narrative. When Mr Turnbull meets Donald Trump in Washington this week he will probably hear more about the impact of US corporate tax cuts on business, jobs and wages growth — further boosting the case for the government’s enterprise tax plan to make Australian businesses more competitive.

Spending restraint must also become front and centre of the national political conversation if the budget is to be in surplus in 2020-21 and looming cost blowouts from rising health and aged-care costs and the National Disability Insurance Scheme are to be contained. The next generation should not be saddled with debt, as Reserve Bank governor Philip Lowe told the House of Representatives Economics Committee last week: “One day we will have another downturn in Australia and it’ll be in the national interest to have a fiscal stimulus to offset that.” In response to Dr Lowe’s warning that taxes should not be cut while the budget is in deficit, the Treasurer said the business tax cuts were ­already factored in to the budget. The majority of the remaining business tax cuts, Mr Morrison said, would come into effect after the budget was projected to return to balance. Personal income tax cuts expected from July this year, however, would be delivered only if they did not jeopardise the return to surplus.

The importance of balancing the budget and containing spending to accommodate the long-term costs of Australia’s ageing population are also a significant issue for the opposition as it prepares its economic policy for the next election. On Saturday, in an exclusive interview with Paul Kelly in The Weekend Australian, Opposition Treasury spokesman Chris Bowen agreed: “The fiscal argument will be a substantial one at the next election.’’ Mr Bowen says he and opposition finance spokesman Jim Chalmers are finalising a set of fiscal rules that would guide an ALP government. He claimed their release “well before’’ the next election would give the public a “degree of comfort’’. That will depend on what they produce and whether their plans are realistic. To date, the opposition’s record in joining with the Greens and crossbenchers to block Coalition spending reforms has been very poor.

One of the biggest challenges for Labor — which is already committed to an extra $22 billion in Gonski school spending over the next decade — will be producing a plan for containing welfare spending, which already amounts to more than defence, health and education spending combined. In a change of tone from the hackneyed and populist class-warfare language and politics of grievance that regularly pepper the Opposition Leader’s economic arguments, Mr Bowen declared his fidelity to the market — a position rarely heard from current Labor politicians. His willingness to at least listen, deal and negotiate with business is a welcome contrast to the hostility towards the “big end of town’’ of Mr Shorten and ACTU secretary Sally McManus. After committing himself to a “refurbished’’ Hawke-Keating reform agenda for the 21st century, we look forward to more specific detail from Mr Bowen, who will face an uphill battle persuading some in his party about his preferences for market solutions.

While Mr Joyce’s position, and the rift between him and Mr Turnbull, remain unresolved, however, Labor will continue to enjoy an easy ride courtesy of the Coalition’s political failures.