Thu May 11

Peter Dutton warns of threat to 'working poor' in budget reply lacking a big picture

Written by Michelle Grattan, Professorial Fellow, University of Canberra

Peter Dutton needed to sketch a big picture in his Thursday night budget reply – to look like an alternative prime minister. He failed to do so.

With the Liberals rating parlously among those aged under 40, Dutton should have been speaking especially to these voters. But his address was more of the same from a Coalition that’s unable to refresh and regroup.

The bar was always going to be too high for Dutton. This week’s budget, whatever criticisms can be made of it and however things work out in the months ahead, has been an elusive target for the Liberals.

Dutton pointed to the formidable issues Australia is grappling with – very high inflation, a housing and rental crisis, crippling power bills, millions of people having gone backwards.

But he lacked prescriptions, let alone ones that were any more convincing than the government’s are.

He risked the government’s accusation of “punching down”, dividing those on welfare (who have benefitted from the budget) and working people on low wages. The cost-of-living relief “is targeted at Australians on welfare but at the expense of the many including Labor’s working poor”. The budget “hurts working Australians”, he declared; “worse, it risks creating a generation of working poor Australians”.

Dutton ticked off on budget items the Coalition agrees with or doesn’t oppose. But he left up in the air the fate of the $40 a fortnight rise in JobSeeker, arguing it would be better to raise the amount the unemployed could earn, rather than increasing the base rate. Interviewed later, he would not confirm the Coalition would support the $40 increase, but it is hard to see it opposing it when push comes to shove. Nevertheless, he has left himself vulnerable to obvious attack.

Dutton homed in on concern, which is likely to grow, about the looming large net migration influx (much of it a post pandemic “catch up”). Labor’s “big Australia approach” would worsen Australia’s cost-of-living and inflation problems, he said.

“Over five years, net overseas migration will see our population increase by 1.5 million people,” he said. “It’s the biggest migration surge in our country’s history and it’s occurring amidst a housing and rental crisis.”

Yet Dutton did not say what his alternative would be – his statement a Coalition government would “sensibly manage migration” is a declaration of intent, not a policy.

He had plenty of familiar Coalition lines and sentiments. “Under a Coalition government I lead, your taxes will always be lower.” “Taxation is the killer of aspiration.” “Labor recklessly spends, carelessly cuts and inadequately saves.”

But his policy offerings were small beer: a ban on sports betting ads during the broadcasting of games; commitments on health; imposing a greater onus on big digital companies to stop scams and financial fraud; the restoration of the cashless debit card. A personal priority was a promise to double the size of the Australian Centre to Counter Child Exploitation.

What was missing was any ambitious initiative on a central issue. While it’s still relatively early in the term, and Anthony Albanese showed the benefit of holding policy back, Dutton is in a different situation.

He is confronting a popular government, not one on the slide. And voters won’t be attracted to an opposition that can’t project what it stands for, or whose values are seeming out of sync with the times.

Notably, Dutton as yet is giving no commitment on one significant tax measure in the budget – the changes to the Petroleum Resource Rent Tax, due to yield $2.4 billion over the forward estimates. The government hopes for opposition support, rather than a haggle with the Greens, whose leader Adam Bandt on Thursday said his party would, if it had the opportunity, fight to make the companies “pay their fair share of tax”.

The Greens’ aggressive response to the budget has underscored the challenge ahead for Labor from an increasingly assertive electoral competitor.

This came in a week when the broader hostility between Greens and Labor exploded in the Senate.

The Greens sided with the Coalition to prevent the government bringing to a vote on Thursday legislation for its $10 billion Housing Australia Future Fund, the interest on which would finance social and affordable houses.

Senate leader Penny Wong lashed out at Greens housing spokesman Max Chandler-Mather (who last year won the Queensland seat of Griffith from Labor), accusing him of “prioritising media attention from stunts and obstruction over housing for women and kids fleeing domestic violence”.

“This man’s ego matters more than housing for women fleeing domestic violence and older women at risk of homelessness. What sort of party are you?” she said.

The Greens and Coalition also teamed up to ensure a longer Senate inquiry on family law legislation.

In response to the budget, predictably the Greens have delivered biting assessments, declaring it hasn’t gone far enough to help the needy.

Ahead of next year’s budget, this pressure from the left will just intensify.

The government’s economic inclusion advisory group, which was a major player in forcing the budget’s across-the-board (modest) rise in JobSeeker will produce another pre-budget report. That will inevitably urge further rises in welfare payments.

Assuming the government fell short of meeting the full recommendations, this would be manna for the Greens. And there’ll be a fresh round in the argument over the Stage 3 tax cuts. If these are not recalibrated, the Greens will have more ammunition.

Framing the 2024 budget, the government could be pulled between delivering more on welfare, keeping its promises on the tax cuts and, with an eye to the election due by May 2025, doing something substantial for middle Australia.

The last election, which added three more seats to the Greens’ lower house representation, bringing them to four, and boosted their Senate numbers from nine to 12 (now 11 with Lidia Thorpe’s defection), was a sharp reminder to Labor that the threat to it from the left is on the march.

It’s perhaps telling that budget week has seen the government rather complacent in the face of a weak opposition, but agitated by the minor party.