Malcolm Turnbull's Phony 'Thoroughly Liberal' Leadership
Ideas & Liberty |
John Roskam
Australian Financial Review 22nd April, 2016
In September when Malcolm Turnbull took the prime ministership he said he'd lead a "thoroughly Liberal Government". What's "thoroughly Liberal" about increasing taxes on superannuation is anyone's guess.
In the Fairfax press on Wednesday, the journalist Peter Martin summed up just how far Turnbull and the federal Liberal Party has fallen.
"The Turnbull government is preparing to trump Labor in the budget by cracking down harder on high-income superannuation tax concessions to raise four times as much as the opposition's policy. Labor has promised to cut the income tax threshold for more heavily taxing contributions from $300,000 to $250,000. The Coalition now plans to cut it to $180,000."
Unbelievable. But true. The Liberals are now in a bidding war with the ALP as to who can increase taxes on superannuation the most. The headline to the story says it all: "PM's crackdown on super to steal Labor's thunder."
Even more bizarre is that virtue of the fact they're planning to increase superannuation taxes by less than the Liberals, the ALP now has a better policy on superannuation than the government. Labor's tax increases will affect 110,000 Australians. The Liberals' tax increase will hit more than double that number.
This newspaper's economics editor Alan Mitchell neatly summed up what appears to be the calculation behind the tax increase. He said it would not be politically costly because, "the people who will be paying the extra tax are rusted-on Coalition supporters. They have nowhere else to go". Whether it's in the long-term interests of the Liberal Party for its leaders to think this way about the people who vote for them remains to be seen.
If Morrison does raise superannuation taxes on the wealthy he'll no doubt claim he's doing it so he can cut taxes for everyone else, and he'll pledge the government's overall share of tax won't increase. The problem is though that a tax rise is a tax rise, regardless of how it's spent.
Make no mistake. If Turnbull goes ahead with the sort of tax increases Morrison is talking about it will be the equivalent of Tony Abbott's section 18C, deficit levy, and Prince Philip mistakes all rolled into one.
Abbott did himself enormous damage among the Liberal Party rank-and-file when he reneged on his commitment to remove legal restrictions on freedom of speech and when he broke his promise not to raise taxes.
When he gave Prince Philip a knighthood Abbott didn't only make himself look foolish. It made every Liberal Party member look foolish too. Ultimately, the sense of disillusionment so many Liberals felt with the Abbott prime ministership was reflected in the way Liberal MPs voted in the leadership ballot.
The situation is worse for Turnbull than Abbott. Liberal Party branch members were merely disappointed with Abbott - they didn't distrust him.
There are two reasons why the Liberal Party branch members tolerate Turnbull, notwithstanding his views on things like climate change, gay marriage, and the republic which are out of kilter with those of many branch members.
The first is because he once appeared to have a firmer grasp of the economic challenges facing Australia than did Abbott. The second reason rank-and-file members were willing to support Turnbull was because he looked more likely to win the election.
If Turnbull raises taxes and doesn't cut government spending one of the reasons for him being leader disappears.
Turnbull presented himself as a reformer and an economic liberal. So far, precious little of that has been seen. As diverse as the Liberal Party is, one of the things that unites party members is the Liberals' commitment to fiscal responsibility. Not many Liberals regard higher taxes as economic reform. There is enormous frustration that, as yet, neither Turnbull nor Morrison look like they have any sort of credible plan to put the budget into surplus, or reduce government debt, or reform the industrial relations system.
If Turnbull loses the election the second reason for supporting him as leader will have turned out to be wrong too.
It's unfortunate that so many Liberal Party branch members are asking themselves the question not whether the Turnbull government will be re-elected, but whether it deserves to be.
http://ipa.org.au/news/3456/malcolm-turnbull's-phony-'thoroughly-liberal'-leadership
