Newspoll: PM’s budget gamble falls flat

Australians have denied Malcolm Turnbull a political dividend following the federal budget | EXCLUSIVE

Malcolm Turnbull and Bill Shorten outside Parliament House on Wednesday. Picture: Kym Smith

The Turnbull government has ­failed to generate a swift reward from its dramatic move to “reset the budget” by using tax hikes to replace divisive spending cuts, with the government losing ground against Labor to trail by 47 per cent to 53 per cent in two-party terms.

In a blow to Malcolm Turnbull’s plan for a political recovery, voters have shifted to Labor and the Greens while voicing concern about budget tax increases, with 45 per cent saying they will be worse off from the budget.

Former Prime Minister Tony Abbott has defended the budget saying it is the best the government can do under the current circumstances.

The latest Newspoll, conducted exclusively for The Australian, reveals that 54 per cent of voters back the new $8.2 billion increase in the Medicare Levy amid a furious dispute over personal tax rates and Labor’s proposal to lift the top rate to 49.5 per cent over time.

The government has strong support for its $6.2bn bank levy amid a war with the industry and negotiations in the next few days on how to impose the plan, with 68 per cent of voters endorsing the idea and 71 per cent saying banks should not pass the cost on to others.

But the budget has failed to ­deliver a political pay-off for the Prime Minister and keeps the government on course for a devastating loss to Labor at the next election, despite hopes within the Coalition that it could use the economic statement to stop the slide in support.

A key finding is that 45 per cent of voters believe they will be worse off from the budget, a result that is better than the record 69 per cent finding on the divisive May 2014 budget but the second-worst for a federal government since 2000.

Another 19 per cent said they would be better off from last week’s measures, a level that is higher than the response to the May 2014 budget and in line with the reaction to the past two ­Coalition budgets.

Scott Morrison stepped up the case for his two big tax hikes yesterday by calling on Labor and the Greens to “come to the middle” in the economic debate by accepting the increase in the Medicare Levy from 2 per cent to 2.5 per cent on most workers.

“We have already come to the middle on this. We didn’t want to put on an increase in the levy. We wanted to be able to do it through savings. The Senate, in their decision, decided to reject that,” the Treasurer said.

Bill Shorten declared the budget was “sinking without trace” ­because the Medicare levy was being imposed on all workers when the government should instead keep a 2 per cent temporary deficit levy on people earning more than $180,000, a measure due to expire on June 30.

“Under Mr Turnbull’s budget on Tuesday night, millionaires pay less and everyone pays more — and that’s not fair,” he said. While the government has lost ground, Mr Turnbull has extended his lead over Mr Shorten as preferred prime minister, with 44 per cent approval compared with 31 per cent for the Labor leader.

The Prime Minister’s net satisfaction rating — the difference between those who are satisfied and those who are dissatisfied with his performance — has improved from -25 points to -20 points — his best result in months. Mr Shorten’s net satisfaction rating deteriorated from -20 points three weeks ago to -22 points.

While voters believe the new measures will hit their hip pockets, 7 per cent believe the budget will be ­“extremely good” for the economy while 29 per cent say it will be “quite good” — a total of 36 per cent and a better result than last year’s budget.

Another 19 per cent believe it will be “quite bad” and 8 per cent believe it will be “extremely bad” for the economy, a combined total of 27 that is lower than any budget since May 2008, when the Rudd government forecast big surpluses before the global financial crisis struck later that year.

With economists warning about the need for stronger action to prevent deficits mounting, there has been a slight increase in objections to spending cuts that could help pay down debt.

While support for this has held steady, 45 per cent of respondents said they were not willing to see a reduction in entitlements such as family payments to restore commonwealth finances.

This is up from 43 per cent one year ago.

The Newspoll survey of 1716 voters was taken from Thursday to Sunday amid a heightened public debate over personal tax rates, with Mr Turnbull defending the increase in the Medicare levy while Mr Shorten came under fire for a budget reply speech that signalled a 49.5 per cent top tax rate under Labor.

At 36 per cent, the Coalition’s primary vote was unchanged from the past two Newspoll surveys but remains six points below the result at the July 2 election last year.

Support for Labor increased from 35 to 36 per cent in primary vote terms since the previous Newspoll, which was conducted from April 20 to 23, while support for the Greens rose from 9 to 10 per cent.

After strong gains last year, Pauline Hanson’s One Nation’s primary vote slipped from 10 to 9 per cent amid scrutiny of its policies and inquiries into the ownership of a small aircraft used to fly Senator Hanson to events.

The combined impact of these shifts was to give Labor a lead of 53 per cent to 47 per cent in two-party terms, widening the gap from 52 per cent to 48 per cent in the last poll.

Mr Turnbull countered arguments last Friday that Australians felt they would be worse off under the budget, saying he believed it was “well received” because ­people knew it was fair.

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