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November 09th 2015 print

Geoffrey Luck

Waffle’s Short Shelf Life

It was quite the speech when Malcolm Turnbull set out to talk about tax "reform" by invoking the argot of yachting and horse racing, plus a sugared sprinkling of exhortations to be agile and adaptive.  Flyblown metaphors are all very well and good, but they are no substitute for intentions clearly articulated

wafflerThe alarm bells rang when I heard Malcolm Turnbull say, “Fairness is in the eye of the beholder.”  It struck me immediately as a re-hash of the ABC’s favoured defence when accused of partiality or worse, “Bias is in the eye of the beholder.” It’s one of those meaningless, disarming responses designed to neutralise specifics and imply the complainant is the real problem. I reminded myself that our latest prime Minister also had embraced the same phrase as Communications Minister.

So it was entirely in character that Turnbull would turn the phrase around in an ABC interview – perhaps a Freudian slip — to introduce it as a litmus test for the appropriateness of taxation reform. It sounded more appropriate on the lips of an elitist than the more workaday “pub test”, but as a lawyer he knew all too well that “fairness” is as slippery a fish in economics as “reasonableness” is at the law.

The Prime Minister’s strange speech at the Economic and Social Outlook Conference in Melbourne – a pedagogic mish-mash of jockeys, technology, sailing techniques, the blame game and hope – put “fairness” at the centre of any tax-reform package. But while prolonging speculation about what shape those initiatives might actually take, the speech itself said nothing.

Tax reform made easy (if not coherent):
“Across the board, we must acquire not just the skills but the culture of agility that enables us to make volatility our friend, bearing fresh opportunities, not simply a foe brandishing threats. So reform, since that is the topic of your conference, should not be seen as a once in a decade or two convulsion, accompanied by a hyperbolic scare campaign. Rather it should be seen as a change of political culture that sees us like the sailor, surrounded by the uncertainty of the sea and the wind, who knows only two things for sure – where she needs to go and that she has the skill to get there. Sometimes the sailor reaches the mark with rapid ease, her sails big bellied in a following wind; sometimes with slow and deliberate tenacity, sails close hauled, tacking into the teeth of a gale. But her vision is as clear as her destination is certain. How to get there and how quickly is the measure of her skill.”
— Prime Minister and helmsman Malcolm Turnbull

Turnbull is relishing his new-found power to lecture the country. Announcing his intention to challenge Tony Abbott eight weeks ago, he promised a new style of leadership that would explain the challenges and how to seize opportunities. What we have seen instead are  self-indulgent and slightly condescending references to the need for agility in an age of disruption; the importance of volatility as our friend. So far, nothing about the ‘how’.

It has become increasingly obvious that the Turnbull government depends heavily on Scott Morrison. The Treasurer has shown an ability to grasp the essentials of his office and the sense not to be stampeded into precipitate action.  He did not repeat his early comment that the country has an expenditure problem, not a revenue problem, but that sentiment has not been not forgotten. He is our only hope as the nation stampedes towards a regime of higher taxes disguised as reform.

Much has been made of Turnbull’s wealth as a marker of his business acumen, and his government by extension as a businessman’s government.  What is forgotten is that Turnbull is a lawyer, not an economist, has never run a real business, made his money on the coat-tails of friends and clients, the bulk of it from investments.

Despite Tony Abbott’s too-generous accolade as “having invented the internet in Australia”, Turnbull did nothing of the sort. There is no evidence that Turnbull had, or has, more than an ordinarily interested person’s understanding of the technology. Apart from his ability to talk impressively, he had no better qualifications for the role of Communications Minister than anyone else in the party room. In terms of that much-vaunted but so-far-unseen talent for fostering “reform”, it proved a disaster that such an indulgent master should have been awarded responsibility for the ABC.

Turnbull’s smarts derive from his recognition that the Abbott government complacently relied on logic and rational need to sell its 2014 budget. He appears to have determined that, in order to implement unpalatable-but-necessary measures, he must appear consultative, persuasive and understanding. Hence the plethora of weasel words and phrases — “everything is on the table”; “tax reform is for a more productive system, not raising more”; “agility”; “innovation”; “fairness”; “conversation”; “contributions”. All this with  no mention of debt and deficit! As one commentator noted, Turnbull wraps everything in optimism.

While all this has all been hugely entertaining, at some point the music has to stop and the parcel must land back in his lap. Concern is mounting, even among his most earnest supporters. The normally obsequious and cringingly worshipful Leigh Sales on 7.30 was obviously troubled by her obligation to ask when all this nice talk was going to end and Turnbull would actually announce something of substance.

The problem that Turnbull has created for himself is that every state, lobby group and self-serving rent-seeker has been invited to a tea party where the cake has not yet been mixed, let alone baked.  Peter Costello believes he should have made clear what his government’s objectives are, and critically, that taxes would not rise. Instead, as Costello observes, it’s now a tax free-for-all.

The Prime Minister’s advice last Friday that the election will be held next September or October, and Bill Shorten’s declared opposition to increased GST, means the next election will be fought principally on taxation. The timing also poses a serious problem of how to frame a May budget without having the tax-reform issue resolved. Given Australia’s declining growth, rising unemployment, poor productivity, collapsed export prices and ebbing tax revenue, how effective can Turnbull’s optimistic words be, and for how long?

‘Political capital’ is Canberra-speak for plausibility.  Does Turnbull have enough to sustain him through the next twelve months of bitter competition by vested interest groups for tax windfalls?  Will he be revealed as having just tried to finesse with pretty phrases the same budgetary issues that Abbott and Hockey tried to tackle head-on?  Is this a magician who can find a bunny in the hat – or is it all smoke and mirrors?

Geoffrey Luck was an ABC Journalist from 1950 until 1976

Comments [11]

  1. Eeyore says:

    Fairness is an attractive goal in the playground but one that has little to do with running governments. I have read somewhere that statement along with its corollary, be happy that world is not fair or you would be living in a bark hut as well.

    “In left logic, if life is unfair then the answer is to turn more tax money over to politicians, to spend in ways that will increase their chances of getting reelected”. Thomas Sowell.

    “Life in general has never been even close to fair, so the pretense that the government can make it fair is a valuable and inexhaustible asset to politicians who want to expand government”. Thomas Sowell.

  2. Mr Johnson says:

    Malcolm reminds me of Fonzie in Happy Days, who never had to fight, because his reputation made it unnecessary. So with Malcolm, everyone believes he has things well in his grasp, but as yet he has never had to do any more than smile and pour forth flowery adjectives over an adoring audience. The real test of his strength will soon come, and I’m sure the petulant man who was Opposition Leader still lurks there, waiting to sniff and pout free. Why do I, as a lifelong conservative, look forward to that moment?

    • Jody says:

      I can remember the days when a Federal Budget was announced and we all sat around with our major daily newspapers to see how it would affect us; no ‘consultation’, no ‘fairness tests’, no ‘stakeholders’ – just a budget for the national economic machine. If we didn’t like it we were free to protest through the ballot box. Today’s nanny state means we have entered a more ‘permissive’ phase – much like modern parenting – where government ministers must feel ‘appreciated’ and ‘affirmed’ through constant opinion polls.

      As Ninotchka said when she saw that Parisian hat…”won’t be long now, comrades”.

    • wse999 says:

      And King Tony was doing such a good job at economic reform, when felled by foul treachery?!!
      Ah yes but KT is a conservative, who by the sound of that word wouldn’t know much about reform.
      And didn’t.

  3. Steve Spencer says:

    I listened to most of Kevin’s….sorry, I mean Malcolm’s speech and struggled to pick out a single clue as to where Rudd….sorry, I mean Turnbull is planning to take us. He is clearly fond of his own voice, something that Rudd…..sorry, I mean Turnbull is making full use of. Apart from the self-love, Kevin….sorry, I mean Malcolm also seems to believe he is by far the smartest person in the land, hence the patronising turn of phrase.

    • Jody says:

      Michael Costa is of the same mind, referring to Turnbull as “having many characteristics of Rudd”. This was on “The Bolt Report” yesterday and my husband turned to me and said, “that’s what you’ve been saying”.

  4. Ken Harris says:

    He wants any budget surplus to be put into a sovereign wealth fund and not wasted by giving it back to taxpayers. There will be no surplus for a long time but his hankering for a SWF says a lot about his attitude to tax reform.
    Who believes Turnbull would be able to resist the temptation to use the SWF to build monuments to his greatness? Like all elitists she thinks he’s more qualified to spend our money than we are. What a colossal slush fund that would be. It’s bad enough to to contemplate what Turnbull would do with the money but Labor will be back in power one day. They’ll go weak at the knees at the sight of such a huge pig trough.
    The could be no easier time to reduce taxes than when the budget is in surplus. If he finds that too distasteful what hope is there that he’ll look to cut taxes now, especially when he keeps adding to the expenditure side of the budget?
    Tax reform is code for tax increases.

  5. Jody says:

    Any government that has been convinced by a bullying media that everyone should feel appeased and treated fairly is set on a path to self-destruction. Reminds me of being a teacher and having to ‘negotiate’ with students instead of applying serious discipline. I used to say to the Principal, “OK boss, I can spend the full hour ‘negotiating’ with the students and that will save me a hellova lot of time on pesky lesson plans and actual teaching”.

  6. Keith Kennelly says:

    ‘Just cut the spending. Don’t do anything else … just cut the spending.’

    ‘Did some one say Bill Shorten wasn’t guilty … I agree he isn’t, but then he’s not innocent either.’

    • That Bill Shorten has been ‘cleared’ by the TURC proves little. Al Capone was similarly ‘cleared’ by the US legal system of the day for his racketeering, he went to jail only for ‘tax evasion’. The really big question that all politicians need to answer now is – will the taxation department now pursue, or be allowed to pursue, the money trail of the Unions and their officials receiving virtual ‘protection money’ while at the same time chasing those complicit companies who paid for this corruption, and do it with with the same vigour that the LABOR/GREEN axis wants the ‘multi-nationals’ hounded for their supposed ‘tax evasion/minimisation’?

  7. Breaking news, Lord ‘Waffles’ of Wentworth, the philosopher king and supreme navigator of the good ship Australian Soft Leftist Social Issues [a.k.a. as SSM, Climate Change and The Republic etc. etc.] as it sails the dangerous economic seas, now wants the private correspondence between Buckingham Palace and Gough Whitlam’s selection of Governor General to be released. Why? Is it a slow news day at his ABC? Why is any part of the supposedly serious media involving itself with such a trivial diversion from the serious problems plaguing our economy? Will it help the Government in any way pay off its massive debt?