The integrity and judgment of the Australian parliament is on trial over the coming fortnight. Amid the clamour about institutions from the ABC to our universities, a bigger test now awaits — how a discredited Senate will manage its biggest decisions during this term of government.
The onus has fallen on the Senate crossbench. This flows from Labor’s decision yesterday to oppose the $144 billion income tax cut package and rescind in office the bulk of the package in stages two and three.
The future of politics and perhaps of the next election now depends on whether the government can legislate the package.
There are three related issues at stake. The first is whether a government should be allowed to govern by implementing its main policies. The second is the policy dimension itself — the decision of the crossbench will be vital, perhaps for years, for companies, households, global competitiveness, jobs and economic prospects.
The third is the election calculus — a government unable to implement its agenda looks broken and beaten while, on the other hand, a Labor Party pledging to abolish legislated income tax cuts worth about $120bn will be exposed and highly vulnerable at the election no matter what polling leads it enjoys at the start.
Who has the responsibility for such momentous decisions? A bizarre collection of crossbenchers and party-crossing desperates, some diligent, others consumed by a panicked quest for survival. Much of the result will hinge on Pauline Hanson and her much battered and diminished party, reduced to two senators — yet two is still vital.
Since Federation in 1901 there has never been a Senate that has witnessed such individual ineptitude, so many breaches of section 44 of the Constitution, such a huge turnover — with 16 out of 76 senators elected at the 2016 double-dissolution election having departed — such chronic changes and swapping of party allegiances, such corrosive interplay of personality-based minor parties and such sustained contempt for the original expression of voters.
Our democracy has become a sham. The entire crossbench should have obligations to the nation — but it is doubtful if this crossbench can rise above its squalid dysfunction.
Only one thing can be said in its favour: that amid the chaos, proper constitutional process has been followed. Yet of the 20 crossbenchers elected at the 2016 election, only 11 are left: a dropout rate of 45 per cent. This Senate is unrepresentative of the 2016 election result. It mocks democratic accountability and fidelity to party, a defect partly of individuals and partly of the system.
If Labor’s decision yesterday was based on any calculation the government would fold and agree to legislate stage one with Labor’s support, that is manifestly a false conclusion.
The government will seek to legislate the entire package but Labor’s hard line creates the opportunity for the government to seek crossbench support to legislate stages one and two — the bulk of the package — leaving Labor in a position where it goes to the election seeking a major increase in income tax (let alone company tax). Of course, if the government can legislate all three stages, then Labor’s position becomes even more dangerous, with the risk some nervous Nellies in Labor will actually lose their nerve.
The Turnbull government is set on a showdown with the Senate. It will force the crossbenchers into voting for or against tax cuts. The government is trying to operate from a position of strength. The two crucial measures are a cut in the corporate tax rate from 30 per cent to 25 per cent for companies with a turnover of more than $50 million annually and a three-stage $144bn restructuring of the personal income tax system, offering tax relief to households while maintaining the progressivity of the system.
This showdown will offer a deeper judgment on many issues — the willingness of a discredited Senate to sabotage the government’s main economic policies for the term; whether Malcolm Turnbull’s 2016 double dissolution, as opposed to a normal Reps and half-Senate election, was really the best option; the limited recourse available to a government when denied by the Senate on its main agenda; and, ultimately, the extent to which the parliamentary system has become a potent danger to effective and stable governance.
The previous Senate was instrumental in the demise of Tony Abbott as PM since he was singularly unable to counter its obstruction with an effective response. The issue now is whether the Senate will be instrumental in Turnbull’s demise for a similar reason or whether Turnbull can legislate much of his tax reform agenda and turn this victory against Labor.
The Senate, to a large extent, is a protected chamber. Its undemocratic nature is justified by the original Federation compact. Its constitutional structure and voting system allows the election of senators with small votes, thereby empowering minorities that then hold the balance of power when the major parties disagree, a frequent result in polarised polity.
Voting systems make or break democracies. Psephologist Malcolm Mackerras calculates that had the last New Zealand election been held under Australia’s superior preferential voting system then Bill English would have been re-elected PM and the darling of the progressive media, Jacinda Ardern, would be in opposition.
A conspicuous feature of the current crossbench is self-interested arrogance. This week we found that Clive Palmer was back — the Australian version of a poor man’s Silvio Berlusconi (though Palmer would prefer the Trump comparison). Palmer is a shameless braggart and wrecker who endlessly boasts about his deep pockets and entices the gullible, the weak and the desperate. Palmer is back because the system encourages his return. Given the incentives, why wouldn’t he back? He enticed former One Nation senator Brian Burston to join Palmer’s new party, called the United Australia Party. The Palmer-Burston announcement came just minutes after Burston told the Senate he was standing as an independent. These senators change parties like they change their underpants.
Loyalty, fidelity — forget it. There have been seven changes of party or allegiance in this Senate — Lucy Gichuhi arrived as a Family First senator, became an independent and then a Liberal. Cory Bernardi left the Liberals to start the Australian Conservatives. Fraser Anning replaced a One Nation senator, sat as an independent, then joined Bob Katter’s party. Steve Martin replaced Jacqui Lambie but became an independent and then a National. Rod Culleton left One Nation and became an independent before he was found to be ineligible. Tim Storer was declared elected to replace a Xenophon senator, sat as an independent and then established his own party. Burston presumably felt he had no chance of re-election so he went to Palmer.
For two terms the Senate has been hostage to personality parties — witness Palmer, Hanson and Nick Xenophon. It is commonly assumed the new voting system will solve the problem by reducing the crossbench at the next half-Senate election. This is a half truth at best.
The culture and operations of the Senate have gradually been transformed during the past 40 years. It has moved away from being a house of review or keeping governments honest. It runs its own agenda and is just as likely to vote against policies on which governments are elected — witness the corporate tax cuts — as policies that involve broken promises.
The Senate needs to be reformed. Why should the public be saddled with today’s imbroglio? Sadly, there is neither the slightest sign of any agreement nor willpower about such reforms. The system doesn’t want to know.
Maybe the public will tire of voting for minor parties, yet the risk is that variations of the present farce will be perpetuated while respect for our democratic institutions relentlessly erodes.
Watch how the Senate meets its challenge and conducts itself during the coming fortnight. Its decisions will affect most householders and provide a critical insight into the utility and integrity of our institutions.
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