Abbott has promised to repeal the carbon and mining taxes, balance the budget in 2012/13, stop the boats, halt the NBN roll out, meet the green house gas emission target and not repeal the Fair Work Act. The looming problem will be how to persuade the electorate in mid 2013 that he can deliver on his current promises, indeed that some are still desirable. Some promises are incompatible, unless economic growth picks up very strongly. The promises threaten his chances of winning power from an incompetent government.
Abbott is desperate for a by-election in an ALP seat to tip the balance of power to the Coalition so to gain government before the carbon and mining taxes become enmeshed in the Budget.
Carbon Tax. It has been pointed out that canceling the carbon tax could involve a government in compensation claims by businesses through the foreshadowed ETS. But far more problematic is the tax reduction hand outs for compensation to voters. Is a Coalition government going to reverse those tax cuts? Polls have shown that the carbon tax is not as unpopular as the ALP government. There is room for people to adjust usage, spurred on by the publicity which will surround the new tax. If the ALP government runs full course, the extra on the electricity bill will largely forgotten.
Abbott can repeal the carbon tax, shouldn’t (but should repeal the ETS, see earlier article 02/10/11 on the flaws in the ETS), and might lose the will after protracted Senate obstruction.
Mining tax. A similar problem arises. You can be sure that the mining tax receipts will be distributed around in a way, tied to specific purposes, to make withdrawal of the largesse very difficult. Already there is a mounting perception and resentment that the miners are responsible for the high $A, which is destroying the manufacturing and tourist industries (Cairns for example is full of shops for sale or lease). The latter two industries are large employers of labour, while the mining industry employs 2%. The 170,000 extra needed over four years as claimed by BHP represents a couple of years employable immigrant intake. Unemployment of 7% by the end of 2012 is credible if downturns eventuate overseas. The tax is restricted to coal and iron ore and the imminence of the tax has not prevented overseas companies buying in to those commodities.There will be no sympathy for the predominantly overseas owned miners (or for Gina Rinehart!).
Abbott can repeal the tax, but best politics is that he should not, and that may persuade him to break his promise.
Balanced Budget. How will revoking these taxes square with the balanced Budget becoming more distant even with the new taxes? Even Swan has stopped simply parroting ‘we are on target’ to surplus by 2013 (itself a dodgy surplus forecast) by occasional qualifications about the world economy.
Hockey can get a balanced budget only by politically unsupportable spending cuts if he loses the carbon and mining taxes. If the latter occurs, shouldn’t and will not do it until an above average period of growth in the economy. With the taxes, still prepare to be an unpopular Treasurer.
Queue Jumpers. The Coalition is relying on Nauru, restitution of temporary permanent visas, and turning back the boats to stop the flow of queue jumpers arriving in boats. Given the current activism of the High Court, Nauru may need legislative changes, which the ALP is bound to support. However there is well founded opinion that Nauru will not be a deterrent this time around, as ultimately most got residency in Australia and the rest elsewhere. The harsh Malaysian solution was necessary.
Abbott can stop the queue jumpers, he should, but lacks the will to take the obvious drastic action to withdraw from the UN Refugee Convention. His currently mooted actions are unlikely to stop the boats.
The NBN. The Coalition response to the NBN rollout can wait until closer to the election. If the roll out meets with good acceptance and is seen to be close to breaking even, the Coalition will have no option to complete it. However, on present indications it is more likely that the take up will be poor. The modern generation is abandoning fixed line completely in favour of wireless connection, it is sufficient for their needs. So the extravagant scheme should be curtailed. Malcolm Turnbull has the right experience to sort out the mess.
Fair Work Act. It is impossible to lift productivity and hence global competitiveness when the unions are allowed to bargain for job security. Manufacturing workers don’t enjoy such privileges. Hence Abbott can and should amend the Fair Work Act. He will of course.
Gillard has set the standard for breaking promises; Abbott would be able to wear the outcry when he breaks some of his. But first he has to get into power and the history of recent elections here and elsewhere is that soft target is the best for oppositions.