Turnbull’s left turn pushes Shorten to extremes

If you were a bookie taking bets on an early election, last night’s ­budget speech certainly shortened the odds.

In his third effort as Treasurer, Scott Morrison promised less tax, more spending and a faster return to surplus.

Come tomorrow night, in Labor’s reply, we’ll get even more spending, even bigger tax cuts (at least for low-income earners) and an even faster return to surplus. Believable or not, now see why a poll this year is looking more and more likely?

According to Morrison, there’s a surplus on the way, one year earlier than promised, although at $2.2 billion it’s arguably a rounding error.

But with surpluses projected to grow, the Coalition’s good budget name has far more weight than Wayne Swan’s promises which never materialised.

Clearly that’s what the ­Coalition is banking on to turn around the good ship Newspoll, and set it up for the campaign.

The budget centrepiece is the much-spruiked personal income tax cuts. As an article of faith, the Liberal Party base — bruised after hits on superannuation and non-government school funding — will find this welcome.

The government will hope the fine print is missed as the cuts are spread over seven years, or three elections, meaning many households hoping for immediate relief will be disappointed.

But the government’s intention to lock in these changes with legislation, as early as this week, is a political masterstroke.

Unless, of course, Labor ups the ante and amends the government’s own bill to increase the tax cut for low-income families, which it can afford, but the government can’t. With that, Labor would force the government to blow its surplus or stand in the way of bigger tax cuts — a vexed choice ­either way.

And forget the sandwich and milkshake comparisons. Anyone who thinks $500 isn’t meaningful to low-income families needs to get outside the bubble. As a percentage of tax they pay, it’s real ­relief and when power prices are biting, anything is welcome.

Elsewhere, there’s positive wins for older Australians, including ways to stay in their homes longer and receive better services.

There’s some common sense on what’s essentially government-backed reverse mortgages, and in the medical research and health area, the policy brain of the minister is evident.

Infrastructure, as we already know, is a winner too. With a little something for everyone, this is a budget designed as much by polling focus groups as the government’s Expenditure Review Committee: bridges in marginal seats; giveaways for local sporting clubs and youth allowance help for regional families.

While there’s much to applaud, like Peter Costello I find Morrison wanting when it comes to some of the broader economic principles that should be enshrined in any Liberal budget.

With debt now over $561bn, and set to rise, the Treasurer has tried to make much of his new 23.9 per cent of GDP tax cap. But when you dig into the detail, what’s really needed is a spending cap, and a savings target.

It’s here they should be ­roundly marked down as the ­papers reveal the overall amount of net savings to be the paltry sum of $404 million, over four years. A couple of tweets from Rihanna to Julie Bishop, and that’s about gone.

Either by instinct or design, the PM has concluded his best way to secure a third term is to move to the left, and to force Labor even further to the left on the grounds that sensible people will hold their nose and still vote for a Coalition that’s let them down, or at least preference it ahead of Labor.

On education, health and ­climate change, there’s now not much difference between the Liberal-National Coalition and Labor, which means higher government spending and less room for lower taxes.

Minimising the policy differences with Labor, rather than amplifying them, has been the Turnbull way for much of his career and it’s clear he’s not for turning.

A case in point is the new $1bn Urban Congestion Fund which is a missed opportunity to open up a debate on Australia’s rate of immigration, one of the highest in the developed world.

Instead, Turnbull will use the fund to tell fed-up city dwellers that everything is OK when it’s clear that the majority of Australians, in poll after poll, want a population plan for the future.

But for all the colour and movement that is the budget, the big roll of the dice wasn’t the politics in last night’s speech, or even the tax-cut sweeteners three elections hence. It’s the High Court judgment due today on senator Katy Gallagher’s s44 matter where we’ll find out whether Labor will face a series of immediate by-elections, in addition to the seat of Perth, that will stretch its resources, and test the Opposition Leader’s popularity.

Shorten’s chance to return fire tomorrow night will sure be interesting.