Leaders to show new year’s resolution

May’s budget is the first major policy test of the new year for the big two political parties and their leaders.

Opposition Leader Anthony Albanese and PM Scott Morrison during question time in the House of Representatives. Both leaders will look for a clean slate in the new year. Picture: Kym Smith

Scott Morrison and Anthony Albanese are embarking on a recasting of political and policy settings for 2020 that will project the Coalition and Labor Party into the new jagged political landscape sculpted by the surprise 2019 election outcome.

After his party’s unexpected and disastrous defeat the new Opposition Leader must engineer massive change. Labor’s big-taxing, big-spending and divisive agenda was clearly rejected.

The Prime Minister, while he must deliver his election promises and keep faith with quiet Australians, has an almost equal challenge in crafting a post-election direction for the government that provides guiding boundaries for the next two years.

For both leaders the most significant shorter-term test comes with the May 12 budget — a week short of the first anniversary of the transforming election.

The Coalition must deliver its promised surplus and, crucially, at a time when the economy is still growing, to keep credibility by avoiding being jammed between a surplus and slowing growth.

Albanese’s budget reply, in which he must lay out an alternative to the Coalition’s mantra of limited spending, no new taxes, a schedule of personal income tax cuts and paying off debt, will have to deal with the ALP policies so resoundingly rejected the year before.

Both leaders finished the parliamentary year this week energised, aggressive and cognisant of the need to maintain confidence and discipline, and provide direction into 2020.

Each is framing his vision within the parameters of a threatening global economic and strategic environment, an increasingly divided domestic body politic and a gap between the demands of scores of self-interested groups and what can actually be delivered.

Morrison’s 2019 leadership has concentrated on reinforcing his election victory, maintaining the central importance of budget control, remaining calm in the face of demands for economic stimulus, trying to turn the climate change and environment debate to practical, achievable issues, building an Indo-Pacific regional focus with stability and security, and ensuring the delivery of services.

His 2020 agenda will continue to concentrate on these areas but with a broader strategic outlook and a more detailed attention to ensuring services, such as health and aged care, are not just delivered but delivered with an emphasis on what people need and want.

“The success of the budget is what enables everything else,” Morrison tells Inquirer. “The budget surplus builds the capability — without going into debt or raising taxes — to progress our agenda. It is central to everything we do next year.”

On Thursday Morrison told parliament: “Australians have earned more based on the national accounts numbers, and as a result of the tax relief we provided and legislated they have kept more of what they earn. I’ve always said what they do with it is up to them, it is their money.”

The Prime Minister’s agenda for 2020 and 2021 goes beyond delivering the first surplus in a decade to include increasing productivity, trade, competition and engagement with the Indo-Pacific. In the New Year, he will travel to India and Japan where he will promote practical engagement and reinforce regional security and stability in the name of prosperity.

While balancing the interests of China and the US, and pursuing new trade deals with the UK and EU, there is a commitment to deeper engagement with the region across trade, security and business, where Australian businesses will be encouraged to operate as part of the Indo-Pacific economy, not just the Australian market.

But as evidenced this week with the radical reshaping of the federal public service, Morrison’s commitment to the delivery of services will move to a new level and take on a different character in 2020.

Morrison wants more services — particularly in aged care and mental health — to become like the more client-oriented NDIS, where services are based on the consumer’s needs rather than the ease of suppliers.

This is a double aim to provide more personalised benefits — such as the extra 10,000 home-care packages for the aged — but also a desperately needed rise in productivity for the economy. The final report of the aged-care royal commission will provide a vehicle for a much greater emphasis and spending on aged care before the next election.

“It is not just about having a resilient economy but being able to take advantage of the potential in the economy for more productivity and for people to earn more,” says Morrison.

“It’s also about a delivery of services that makes a difference and that are consumer-oriented and not designed for the supplier.”

Politically, Morrison has committed to a hard line against Labor, pursuing Labor’s failed election strategy and highlighting the parliamentary victory in overturning the medivac asylum-seeker laws imposed when the Coalition was a minority government.

Part of the Prime Minister’s political tactics this year and next is an aggression towards Labor and a use of incumbency and parliamentary power that was missing under the leadership of Malcolm Turnbull.

While Morrison has suffered a scrappy couple of weeks in parliament with mistakes and the embarrassing incompetence of Energy Minister Angus Taylor that allowed Labor to lift confidence, he finished the parliamentary year on top.

For Albanese the final two weeks of sitting were even more important and he succeeded in achieving two of his 2019 aims — damaging Morrison personally and lifting the spirits of demoralised Labor MPs.

While the Labor leader has a more challenging internal task for 2020 and beyond, at least he’s not tied to delivering election promises that would have been impossible to deliver in today’s economic conditions.

Perversely, one of Labor’s main tasks for 2020 is to make up for the failure in 2019, before the election, of properly recognising the danger Morrison posed as Prime Minister and resting on the assumption that the campaign to make Turnbull look like an arrogant millionaire who sided with the “top end of town” was enough to kill Coalition support.

Albanese has successfully needled and distracted Morrison on the issue of his “integrity” and not punishing corporate greed and the banks sufficiently while exploiting “scandals” surrounding ministers.

The Labor leader’s political strategy is to first pull down the government and the leader before presenting as a viable alternative to the electorate.

This week, in his final address to his parliamentary colleagues, Albanese revisited the pain of the May election loss and tried to pull his still-grieving MPs into a more confident and optimistic mood for next year.

“We will go into 2020 with confidence. Confidence that we can hold this government to account. Confidence that we can defeat legislation. Confidence that we can present an alternative vision for this nation. An alternative vision that’s based on fairness, that’s based on creating wealth but also is concerned about its distribution,” he said.

He also sought to use the government’s rear-vision tactic of blaming Labor and concentrating on the failed 2019 $387bn big-taxing election campaign, declaring: “This is a government that is failing. It’s failing because it’s obsessed with attacking Labor.” Promising a new agenda, Albanese said: “Labor will have to formulate our plans for Australia against a backdrop of unparalleled economic, social, geopolitical and environmental change.

“We can approach this task in one of two ways. We can ignore inconvenient truths. Shout cultural insults louder and louder at each other.

“Or we can have a proper, grown-up, democratic conversation about the best way forward for the country,” he said.

But for all the positive rhetoric and parliamentary success Albanese still faces the dangerous task of choosing which Labor policies to dump and which ones to try to salvage.

There has already been a divisive debate over the tax policies on franking credits and negative gearing that put off older Australians and investors during the election and whether the corresponding big-spending agenda can be kept.

When John Hewson dumped his proposed GST overnight after losing the unlosable election in 1993 he lost all credibility. Albanese can see that having a big-spending agenda means you have to have a big-taxing plan to pay for it and so it is up to him to limit taxing by limiting spending. This was Morrison’s successful ploy and Bill Shorten’s inflexible failure.

Albanese is working to a plan of hurting the government, trying to heal Labor pain and developing a simpler, more flexible, policy platform that is a far less detailed election manifesto.

He’s also avoiding the class warfare rhetoric of Shorten and quelling the culture wars.

“Coping with the future is going to require difficult choices,” he will proclaim in a speech on Saturday. “To succeed, broad interests, concerns and ideas must be heard. We must examine things as they are, rather than as we want them to be.

“On the other side of the argument, I think those of us who advocate change need to understand the viewpoints of those who will feel insecure by that change. We must consider their point of view, their interests, their security, their future, their solutions,” he will argue.

This is about style, but the May budget will be about substance and strategy for 2020 for both Albanese and Morrison.