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The Liberals are dreaming

By Ken Wolff

On Sunday morning 10 July, before Shorten conceded defeat in the election, Arthur Sinodinos appeared on the ABC’s Insiders. He claimed the Coalition had a ‘mandate’ for its 2016 budget and its company tax cuts. Sinodinos’s view takes no account of the reality of the new parliament.

Although the final count is not yet complete, it appears the LNP will win 76 or 77 seats in the House of Representatives and Labor 68 or 69 (the uncertainty at the time of writing being the seat of Herbert in Queensland). So Turnbull will form a majority government but also has to provide a Speaker. If the LNP final total is 76, which means 75 after a Speaker is elected, then the government will be reliant on one of Bob Katter, Cathie McGowan, Andrew Wilkie, Rebekha Sharkie or Adam Bandt to pass legislation that is opposed by Labor. It will also need an effective pairing agreement for those times when parliamentarians are absent for legitimate reasons.

The Senate will be more complicated. At this stage its result is less clear but we already know there will be at least six Greens (possibly three more at the final count), Pauline Hanson (and possibly another one or two One Nation members), Jacquie Lambie, Derryn Hinch, three of the Nick Xenophon Team and probably another minor party member. These represent a great diversity of views but the Coalition could require all of the non-Green Senators to pass legislation opposed by Labor and the Greens.

These independents and minor parties have their own agendas which they would no doubt wish to pursue in any negotiations in which their support was needed for specific legislation — or, in some cases, their position would not allow them to vote for some of the government’s current policies. For example, in the lower house:

  • on tax, Katter wants to remove the Fringe Benefits Tax for FIFO miners; NXT wants to limit tax cuts to those businesses earning up to $10 million and wants the temporary deficit levy to be extended; the Greens want a progressive tax rate on superannuation and want to end negative gearing.
  • on a federal ICAC, it is supported by the Greens, McGowan, Wilkie and NXT
  • on carbon emissions, McGowan wants a price on carbon (and did vote against repealing the ‘carbon tax’); NXT would like an emissions trading scheme; and Wilkie previously supported Gillard’s carbon pricing.

In the upper house, as well as the Greens and NXT, the views of Lambie, Hinch and One Nation come into play:

  • on tax, Lambie wants a financial transaction tax on high-speed share traders; One Nation wants to get rid of the Double Taxation Agreement which stops companies being taxed both in Australia and another country for the same product (that would breach many of Australia’s tax treaties and free trade deals); only Hinch is likely to support the full extent of the government’s corporate tax cuts.
  • on carbon pricing, Hinch, Lambie and One Nation all oppose an emissions trading scheme (or climate science itself).
  • on immigration, One Nation’s views are well known; Hinch supports multiculturalism and opposes the views of One Nation; Lambie wants immigrants to be screened on the basis of whether they support Sharia law.

They each want Royal Commissions into different subjects:

  • One Nation seeks an inquiry on Islam
  • Lambie and NXT want an inquiry on defence abuse and veterans’ welfare
  • NXT also supports the Labor proposal for an inquiry into banking
  • Hinch wants an inquiry into the Family Court and child protection agencies

Put that together and it is difficult to see how the government will get all its budget measures through the Senate as it is unlikely to agree to some of those positions.

Josh Frydenberg has come out and said that the government should not change its immigration policies nor support for multiculturalism which would seem to rule out horse-trading for One Nation’s vote but without those votes it becomes less likely it will get measures through the Senate.

The easiest way for the government to get legislation through the Senate will be to win Labor or Green support but that will also require compromise to meet the views of those parties.

I heard a radio report that there had been consideration of government policies in terms of which were supported by Labor or the Greens, including which of the so-called ‘zombie’ measures Labor had indicated during the election campaign that it would use in its own budget calculations, those which may be supported with amendments, and which were opposed — it was claimed that the ‘opposed’ column was quite small. (I have not, however, been able to find a written or on-line confirmation of that report.)

One measure that was mentioned was the reduction in R&D tax incentives. During the campaign Labor did announce in its savings measures that it would support the reductions. A proposal to reduce R&D tax incentives goes back to the Gillard government but was opposed by the then Abbott-led Opposition — the details have changed each time it has been resurrected. The Abbott government brought it forward again thinking, as Labor had introduced the idea, that it would gain Labor support but Labor opposed it because the Abbott government did not intend to use the savings in the way Labor had proposed. So even if the Turnbull government brings it into parliament again, it cannot take Labor support for granted unless a significant part of the savings are used for other purposes supported by Labor and that appears unlikely.

The government is also unlikely to get its company tax cuts through parliament in their current form — that over a period of ten years all companies are included. Labor only supports the cut for companies with a turnover of up to $2 million and NXT for companies with a turnover of up to $10 million. So it will be impossible for the government to pass the legislation required in the Senate without a significant compromise that limits the size of the companies to which the cut will apply. So the question for Turnbull will be whether to abandon the idea altogether (thus making significant savings in the budget) or to accept it in a more limited form.

Ironically, even the legislation for the reintroduction of the Australian Building and Construction Commission (ABCC) which was the formal trigger for the double dissolution is unlikely to pass the new parliament, even at a joint sitting. Even Bob Katter opposes it as he supports the CFMEU — despite his ‘redneck’ reputation, Katter is in many ways more like old conservative Labor.

The new Turnbull government’s problems don’t end with the new parliament. It has internal problems that will also affect its legislative agenda.

For a start, the coalition agreement with the Nationals will be renegotiated and Barnaby Joyce, as Nationals’ leader, has already indicated that he will be seeking greater power as the Nationals have improved their position while the Liberals lost ground. Such ‘power’ may require the inclusion of more National policies but whether or not we ever find that out is unclear. Joyce maintains that the agreement, even though set out in writing, must remain confidential. Labor is already mounting a campaign that it should be public and transparent because voters have a right to know what deals are being done to form their government.

Turnbull and Morrison may also face opposition to the government’s superannuation policy. The government’s own conservative members, such as Peter Dutton and Eric Abetz, have already blamed the policy for the loss of votes from the Liberal’s ‘base’. Sinodinos in his Insiders’ interview refuted that. It will no doubt come up for discussion in the party room and we will have to await the outcome. Labor will certainly oppose it in its current form although Labor’s spokesperson on superannuation, Jim Chalmers, has suggested an independent inquiry to determine whether or not it is retrospective — then Labor may support changes that are ‘workable and fair’ and not retrospective.

Turnbull may also lose some power within his own cabinet as there are increasing demands for more conservative members to be included on the front bench. In the election Turnbull appears to have lost at least three ministers and junior ministers who supported his ascension last September. What influence that will have on future government policy also remains to be seen but it is likely to be in directions that cannot be supported by Labor or the Greens.

Members of the government, including Turnbull, have conceded that they did themselves create the fertile ground for Labor’s so-called ‘Mediscare’ campaign and that they need to regain the public’s trust on health issues prior to the next election. What they will do is an unknown. Morrison has already suggested that if they were to ‘unfreeze’ the Medicare scheduled fees, then savings would need to be found elsewhere. I think they will have trouble selling that to the parliament partly because Labor takes the view that rather than just making savings, revenue needs to be raised.

So despite Sinodinos’s optimism that the government has a ‘mandate’ for its budget and policies, there appears very little chance of its key policies passing the parliament unchanged. Labor is unlikely to support even those measures it agreed with during the election if the government does not use some of the savings for Labor-supported social measures.

Many of the cross benchers have their own agenda which will also force changes in the government’s policies.

Its own conservative wing appears to have increased its influence and will no doubt use that influence in policy deliberations.

And the Nationals have also improved their relative position and will demand more of their own policies.

If the Liberals think they have a ‘mandate’ and can really implement their budget, tax and economic policies in their current form, then they are dreaming!

What do you think?

If the Liberals are saying they have a mandate, are they just creating a new lie?

How long can Turnbull survive when he has lost control of the parliament and his party?

This article was originally published on The Political Sword

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22 comments

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  1. Stephen

    The Liberals haven’t a clue really, Abbott gets elected on a constant drumbeat of panic and negativity and making reassuring promises so people think they can keep what they have and vote Liberal, Soon as he is elected swings hard right popularity plunges to record depths record defeat and loss of power in the offing. Cue Turnbull reassuring everyone to trust me I am a small L type Liberal the right wing own him and party policies remain the same, so he can stoke his ego by being Prime Minister by itself not by doing anything to earn it.
    Turnbulls popularity plunges rapidly scrapes home in the Reps and right wing are now saying the drop in support is because he wasn’t right wing enough and rumblings about Abbott coming back to the lodge.
    If they want to achieve nothing and lose the next election and be out of power for a decade vote Abbott back in carry on as they are,
    Are they really this blind and stupid to see the reality or do they just want to try and institute their platform and hope to cement it in place safe from future repair, do they actually think enough people will think it good, do they hope Labor will implode and they can win the next election by default. My brain goes numb trying to understand this sort of reality blind mindset.

  2. ozibody

    Thank you for the illuminating article.

    I read (somewhere) that the Government plans to ( through their Executive power ) move against welfare cheating, without legislating through Parliament.

    Could be a way to ‘suck up’ to their own crowd as a balance against proposed Superannuation changes. Without doubt there will be much ‘sparring’ around as they try to govern our country going forward.

    On the ‘goss topic’ I read way back that Mr. T (when he tried to enter politics initially) offered to buy a Labor Senate seat! If so, he’s continued ‘buying’ his way by (reportedly) donating a lazy $$ Million $$ to the Liberal election campaign!!

  3. Jack Russell

    I think they are very happy to have us all yapping on about this kind of stuff.

    It gives them the diversion they need to cement full-blown fascism firmly in place, which they are quietly achieving at an accelerated rate behind closed doors.

    We are the ones who are dreaming . . .

  4. Matters Not

    Let’s not forget that there’s also the National Party who want to get rid of the so-called ‘back packer’ tax increases.

    Interesting times. So many decisions and so many variables. So many ‘nutters’. All looking to create their own ‘brand’.

    Perhaps another double dissolution? Given the resounding success of the last one. ? ? ? ?

    But perhaps not.

  5. KingDondee

    Is the issue of the TPP vote being ignored here because you expect the ALP to support the government no matter what?

  6. Alltherage

    That is not correct about the Govt always needing to rely on an independent if it wins no more than 76 seats.
    Total HoR seats – 150
    LNP winning 76 seats.
    Means others win 74.
    So even after LNP appoints a speaker – they would have 75 seats, which is a one seat majority (75 v 74) in its own right.
    Except for bills seeking to alter the constitution which require an absolute majority. Then technically they would need that support but usually no constitutional change is ever proposed without bipartisan support so independent support would be irrelevant.

  7. Kaye Lee

    Plenty of room to negotiate….

    Tony Burke confirmed that this meant Labor would accept cuts to research and development tax incentives worth $860m, higher education fee indexation worth $119m, university loan thresholds worth $9m and changes to the university loan program that would raise $24m. These figures are over four years.

    They also backdowned on opposition to removing the Schoolkids Bonus earlier in the election campaign, deciding to accept a saving worth about $4.5bn

    Other measures announced by Labor…..

    halve the Family Tax Benefit Part A supplement for families with incomes over $100,000 and to pause payments of the tax benefits to families with incomes of more than $90,000. These two savings will add $505 million and $275 million to the budget over four years.

    halt the private health insurance rebate for natural therapies, saving $180m over four years, and will freeze the threshold for the private health insurance rebate, saving $2.3bn over four years.

    Labor’s crackdown on multinational tax avoidance would raise $1.6bn, its abolition of the emissions trading fund would raise $453m, its negative gearing tax increase would raise $1.9bn, its retention of the deficit levy would raise $4.2bn and its crackdown on rorting in vocational training fees would raise $380m.

    On top of this, Labor claims a $4.4bn saving over four years by not proceeding with all of the company tax cut put forward by the government.

    http://www.theaustralian.com.au/federal-election-2016/federal-election-2016-labor-to-add-3bn-to-budget-bottom-line/news-story/584415edc852db20a5940d768a77e752

  8. Kaye Lee

    One thing I find particularly annoying, though perhaps not as important as it may have been. it appears the counting in Herbert was suspended just before 6:30pm on Friday and has not been updated since. They left the count with only 12 votes separating the candidates and only 887 envelopes awaiting processing. That would take 10 people 2 hours max. I would really like to know if funding was cut to the AEC to carry out this election. It sure seems that way.

  9. Jack Russell

    I recall reading that they did cut AEC funding, quite substantially – and replaced the boss as well.

    Can’t recall where I read it, but it had links to back it up . . . so the info exists, somewhere.

    hth.

  10. wam

    How can the winner of an election not have a mandate?
    The consistent difference between labor and the libs is over collateral damage. The former err to stop damage to the innocent and the latter care not if some innocent are hurt even to the extent of a ‘Bridgend’?
    The collateral damage and debt of the vulnerable(seen the ads for paramedic training up to psychiatrists are setting up private practices to treat “the worried well,” instead of those with serious mental illness) are where labor must make the libs explain why? this their pink batts times a thousand and should be threatened with a royal commission.

  11. Garth

    @Alltherage, I’m not sure what you are talking about. The constitution can only be amended through a successful referendum.

  12. Terry2

    Turnbull is hosting a Liberal Party dinner tonight but Abbott has declined the invitation.

    Don’t tell me that Abbott stayed in politics to be a backbencher : watch out for the Conservative move to oust Turnbull.

  13. Ken Wolff

    Thank you everyone for your comments.

    First, Alltherage, yes your maths is right. My excuse is a bit of editorial laziness for which I apologise. My draft was written when it appeared the Coalition would win 75 seats (74 after election of the Speaker). I updated the numbers as they came in but unfortunately not my wording. However, it only takes one coalition member to miss a vote and the situation I describe could come into play.

    On the issue of a ‘mandate’ (wam and Dan), I used ‘mandate’ in inverted commas partly for the reason you say. In a technical sense the winner always has a mandate but when the election is so close, and the Coalition lost first preference votes in 80% of electorates, the mandate is wafer thin and barely worth the paper it is written on. The fact that the people returned a Senate that is unlikely to support a number of the Coalition’s policies is also a ‘mandate’. In a democracy the people can never be wrong.

    Kaye Lee: I have also been following the Virtual Tally Room and could not believe that Queensland appears not to have done any counting this weekend, nor on the Sunday of last weekend, even though it was a number of Queensland seats that were key to the final party representation by seat.

  14. J Fraser

    <

    With any luck tomorrow the Cons will elect Abbott as Deputy thereby getting revenge on the Foreign Minister for Movie Stars and having their own man ready to take over from Turnbull.

    But that would be an ideal world ………. and with the billionaire Trump saying he emphasises with the poor in America and the latest British Tory P.M. saying she is going to govern for all, not just the privileged few, and the multi millionaire Turnbull looking after the tax dodging Corporations what are the chances ?

    Just for the record I said eff the LIberals and eff Labor and went and joined over 1.3 million other Australians and voted for The Greens.

  15. Anon E Mouse

    A random thought about Morrison.
    I have wondered at how much influence The Bretheren cult has with the Coalition. I wonder how many of the LNP are members of the more open/wider Bretheren.

    I had relatives that were part of the more open Bretheren, and they attended a few different churches (not Catholic, Anglican) and it was never really clear what church they belonged to. The chuches were smaller borderline type Christian.
    Eventually it sort of slipped out that they were part of the Bretheren, but not the ultra-Bretheren (or whatever they call it). It seemed odd.

    Morrison reminds me a bit of my odd relatives, and with his Hillsong connection it has made me wonder…

  16. gee

    the LNP modus operandi is lie, cheat and steal, do whatever it takes to get power and then use it to benefit your benefactors.

    I will be surprised if the government in its current form remains intact by the end of the year.

  17. Zathras

    The only mandate any elected government has is the power to introduce legislation into the Parliament, which must then follow it’s own rules.

    Government is not just a rubber stamp to pass the basic ideological aims of a group of people driven by self-interest and the interests of their financial sponsors.

    Even morally, more people actively voted against this government rather than voted for it.

    The mandate argument has always been a myth, perpetuated by winning governments.

  18. Wayne Turner

    No political party EVER has a mandate with their policies.It’s ANOTHER LNP LIE.Our political system is NOT a dictatorship.

    The ONLY mandate ANY government ever has is to command a majority in the house of reps (Whether on their own or with independents in the case of a hung parliament),and if they are lucky a majority in the Senate (Again,NOT in this case).

    Voters do NOT vote on every policy directly,so just because a party gets a majority (of seats,which matters more than votes – Ask Labor & Beazley in 1998).Does NOT mean they agree on every policy.So no mandate.

    ANOTHER LNP LIE,that is promoted by the LNP’s MSM by them NOT correcting it.In fact Labor MUST point out,this is a LIE.

  19. cornlegend

    he Turnbull Government Ministry for the 45th Australian Parliament was announced on 18 July 2016 and, added to the list of usual suspects, there is now a climate change denier heading the resources portfolio, an individual heading the environment portfolio who thinks nuclear energy, coal seam gas and coal are the greatest things since white bread, a person mentioned in a 2015 NSW ICAC investigation becoming the minister dealing with urban infrastructure and, a former ministry reject recalled to the assistant ministry to join Barnaby Joyce’s secondary circus.

    Party

    Minister

    Portfolio
    Liberal

    Malcolm Turnbull MP

    Prime Minister
    Leader of the Liberal Party
    National

    Barnaby Joyce MP

    Deputy Prime Minister
    Minister for Agriculture and Water Resources
    Leader of the National Party
    Liberal

    Julie Bishop MP

    Minister for Foreign Affairs
    Deputy Leader of the Liberal Party
    National

    Senator Fiona Nash

    Minister for Regional Development
    Minister for Regional Communications
    Minister for Rural Health
    Minister for Local Government and Territories
    Deputy Leader of the National Party
    Liberal

    Senator George Brandis QC

    Attorney-General
    Leader of the Government in the Senate
    Vice-President of the Executive Council
    Liberal

    Scott Morrison MP

    Treasurer
    Liberal

    Senator Mathias Cormann

    Minister for Finance
    Deputy Leader of the Government in the Senate
    Liberal

    Christopher Pyne MP

    Minister for Defence Industry
    Leader of the House
    CLP

    Senator Nigel Scullion

    Minister for Indigenous Affairs
    Leader of the Nationals in the Senate
    LNP

    Peter Dutton MP

    Minister for Immigration and Border Protection
    Liberal

    Greg Hunt MP

    Minister for Industry, Innovation and Science
    Liberal

    Sussan Ley MP

    Minister for Health
    Minister for Aged Care
    Minister for Sport
    Liberal

    Senator Marise Payne

    Minister for Defence
    Liberal

    Senator Mitch Fifield

    Minister for Communications
    Minister for the Arts
    Liberal

    Senator Michaelia Cash

    Minister for Employment
    Minister for Women
    Minister Assisting the Prime Minister on the Public Service
    Liberal

    Christian Porter MP

    Minister for Social Services
    Liberal

    Senator Simon Birmingham

    Minister for Education and Training
    Liberal

    Senator Arthur Sinodinos AO

    Cabinet Secretary
    LNP

    Steven Ciobo MP

    Minister for Trade and Investment
    National

    Darren Chester MP

    Minister for Infrastructure and Transport
    Liberal

    Kelly O’Dwyer MP

    Minister for Revenue and Financial Services
    Liberal

    Josh Frydenberg MP

    Minister for Environment and Energy
    LNP

    Senator Matthew Canavan

    Minister for Resources and Northern Australia
    Liberal

    Paul Fletcher MP

    · Minister for Urban Infrastructure
    Liberal

    Senator Concetta Fierravanti-Wells

    · Minister for International Development and the Pacific
    Liberal

    · Minister for Tourism and International Education
    · Minister Assisting the Minister for Trade and Investment
    Liberal

    Michael Keenan MP

    · Minister for Justice
    · Minister Assisting the Prime Minister for Counter-Terrorism
    National

    Michael McCormack MP

    · Minister for Small Business
    Liberal

    Dan Tehan MP

    · Minister for Veterans’ Affairs
    · Minister for Defence Personnel
    Liberal

    Alan Tudge MP

    · Minister for Human Services
    Liberal

    Senator Scott Ryan

    · Special Minister of State

  20. Kaye Lee

    So we now have a Minister for Defence, a Minister for Defence Industry, and a Minister for Defence Personnel along with a Minister for Border Protection and a Minister Assisting the Prime Minister for Counter-Terrorism. These people have budgets in the hundreds of billions, but we have no money for health, education, welfare or action on climate change.

  21. cornlegend

    Parliamentary Secretaries, who will continue to be known as Assistant Ministers.
    Karen Andrews will become the Assistant Minister for Vocational Education and Skills.
    Alex Hawke will become the Assistant Minister for Immigration and Border Protection.
    Keith Pitt will become the Assistant Minister for Trade, Tourism and Investment.
    And Craig Laundy will become the Assistant Minister for Industry, Innovation and Science.
    There are three new appointments as Assistant Ministers.
    Luke Hartsuyker will be appointed Assistant Minister to the Deputy Prime Minister.
    Senator Zed Seselja will be appointed Assistant Minister for Social Services and Multicultural Affairs.
    And Dr David Gillespie will be appointed Assistant Minister for Rural Health, a responsibility previously held directly, as you know, by Senator Nash.

  22. Bighead1883

    J Fraser July 17, 2016 at 7:22 pm

    Just for the record I said f*ck the LIberals and f*ck Labor and went and joined over 1.3 million other Australians and voted for The Greens.

    And Pauline Hanson thanks you greatly for being a Greens supporter
    How else could the so called electoral reforms be pushed through so fast that a DD could be called within the time frame parameter

    “We`re doing this to make voting easier and to get rid of micro parties and crazies “was the mantra as I recall

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