Claiming Victory: A Prime Minister’s Speech To Australians

IN A CHOICE between dignifying the puerile drivel and arrogant hubris being indulged in by opposition “leader” Bill Shorten — or a statesmanlike address to the country by the Prime Minister, filled with humility, direction and fresh ideas — this column today inclines to the latter; there is a path through the ostensibly unworkable Parliament Malcolm Turnbull has been handed by voters. Whether he elects to pursue it is a matter for him.

 

MY FELLOW AUSTRALIANS,

I want to begin my remarks today with an apology.

Last Saturday, you spoke to us through the ballot box — to me, to my government, and to all of us in politics — and you told us, loudly and clearly, that you were not happy.

Today it is my duty to accept the opportunities and challenges that go hand in hand with another chance to form government in Australia, and in doing so can I simply say that I am humbled and excited to have been given that chance.

I accept that by entrusting my colleagues and I with the task of governing Australia, the very notion of “trust” is one we must work hard to rebuild: I have heard your message, and over the next three years my colleagues and I look forward to spending more time with you, talking about the issues that matter in your lives and your communities, so we can better understand what you want from your government and take steps to ensure that we deliver it.

For too long in Australia and especially during the recent campaign, politics has been conducted in an atmosphere of abuse, of fear, and sometimes — regrettably — hatred.

I’m not going to dwell on that today and in fact, I want to make an attempt to put that behind us, so we can get on with building Australia, working to resolve her problems and to encourage the hopes and dreams of our fellow Australians, and to make sure this remains the best country in the world for decades and generations to come.

And for that reason, my government will be making a very big invitation to the deputy leader of the Labor Party, subject to discussions we seek to have with our opponents, to join the government as minister for Health.

During the next three years, we face unprecedented challenges, imposed upon us by your will: a close result in the lower house and a fragmented Senate will make the job of governing difficult, but I believe it is not impossible and we will do our very best to live up to the clear expectation for improvement that you told us last weekend that you expect.

I accept that we have made mistakes and I accept, that since becoming Prime Minister, I have made my share of those.

But I firmly believe that today is a new day, and in that spirit we will seek to work with Mr Shorten, and his colleagues, to explore ways in which we can improve how we do our jobs, and to explore ways in which we can resolve some of the great differences that have always existed between his party and our own.

As a Liberal Prime Minister, it is my responsibility to my party — and to the millions of people who have once again invested us with their trust — to deliver truly liberal and conservative policies that we believe can improve the lives of all Australians.

But in seeking to work in partnership with Labor, we acknowledge that if we are to ask for something, we must give something in return, and for this reason one of the differences we intend to try to resolve is the eternal bickering over Health and Education, both between the Liberal Party and Labor, and between the Commonwealth and the states.

My people have developed proposals in these two critical areas that we believe can fix our healthcare systems and our schools, and it is on the basis of these we initially seek the co-operation of the ALP. It may be that nothing comes of those discussions, but we intend to try: and once we have discussed our ideas with the Labor leadership and provided we are satisfied there is scope to work together, we will make these plans public.

But more broadly, we want to try to reset the tone of debate: less abuse and fearmongering, and more productive outcomes.

We took a policy of tax cuts for business to the election; not because we wanted to give “handouts to millionaires,” as our opponents said, but because we genuinely believe that taking the burden off business is the best way to create jobs and growth.

Labor took a policy of abolishing negative gearing to the election; they said they believed this would increase housing affordability for young people, whereas we genuinely believe that such a policy could have catastrophic knock-on effects for the property industry, for rental affordability, for the value of the homes of ordinary mums and dads, and for the economy itself.

Where we differ, we should reach decisions on how to proceed through a battle of ideas, not abuse; by debate, not frightening people.

What I will say today is that we certainly shouldn’t lie to you: and speaking of the grand plot we supposedly had to privatise Medicare, I would simply say to Mr Shorten that you know it was never true, so let’s not hear another word about it.

Over the next three years, my government will be working to implement as much of the plan we took to the election as we can, and I acknowledge that with the numbers in Parliament being so tight it simply may not be possible to legislate all of it.

We know — from our members talking to people in their electorates, that there were some things we got wrong, and which in all likelihood contributed to the swing against us.

We will consult on controversial initiatives — such as our changes to superannuation tax concessions — and where we are satisfied improvements can be made, we will do so.

But with an eye to the future — and to the very real challenges we now face in Australia — we have a responsibility to fix the way we are doing things in certain areas if we are to leave behind a country that is great for our children and grandchildren; one where they can continue to enjoy the freedom and the way of life we cherish so dearly.

Putting aside the politics, I don’t think anyone really thinks we can continue to live beyond our means.

We now owe the rest of the world a half a trillion dollars — a figure growing by $50bn every year. The interest bill to service that debt is a billion dollars a month: money that could pay for schools, or hospitals, or infrastructure in regional centres, or a stronger safety net for those in our society who most desperately need it.

We are prepared to set aside the blame game — who did what, who started it, whose fault it is — and to work with our opponents to develop a solution to this problem that enables us to once again balance our budget and to begin to pay back some of that debt.

We have a rapidly ageing population that is already straining our health and welfare systems. We want to help older Australians, who have worked all their lives to make Australia a better and stronger society. But an ageing population throws up challenges: from the increased cost of looking after older Australians to the shortages of skills and labour their absence from the workforce creates.

We seek to explore, with Labor, ideas to overcome these challenges.

Mr Shorten and Labor have a choice: to work with us in genuine partnership to try to fix some of these problems, or to behave like opposition politicians and try to stop us from governing.

Either way, we are ready to act in good faith. There is a seat at the Cabinet table on offer if it is possible for us to work with our opponents, but whether we can or not I think it is critical that we make the overture if a difficult Parliament is to be made a success.

We understand you are not happy; we know this because of the swing against our government. We know because of the feedback our booth workers received on polling day. We know because of the record number of votes cast for independents and minor parties.

It is an article of faith in a democracy that the voters are always right, but it worries me that so many people have chosen to vote for parties and candidates who prey on what frightens or angers them, rather than for those who may smooth those fears and reservations, and it is our job to try to restore your trust in us as a party of government.

Over the next three years — beginning next week — there will be a small number of changes to my ministry; clearly, some of our ministers lost their seats at the election, and those vacancies will be used to promote new talent to the frontbench to ensure the government continues to renew itself and does not stagnate.

There may, as I alluded at the outset, also be a place for Ms Plibersek depending on the outcome of the discussions we seek urgently with members of the ALP leadership.

But during the three years of my government, our team will also be working on comprehensive policy ideas to continue the reform process. Further taxation reform. Further industrial relations reform. Ways to improve how our Parliament is elected to make it more representative and more responsive.

These — and other areas of reform — are always complex issues, and I understand many people can feel apprehensive and alienated in the face of change.

But it is my promise that any major reform will be laid out before the electorate, in detail: and then you will have the opportunity to vote on it at an election, with any of the changes we propose to take effect during the Parliament after this.

Fellow Australians, I truly believe the best days of our great country are in front of it; and I believe — to quote John Howard — that the things that unite us as Australians are more stronger and more enduring than the things that divide us.

I know you have heard me say it a lot lately, but there has never been a more exciting time to be an Australian; our challenge now is to ensure that that always remains the case, and to ensure that the generations who follow us can be as excited — and as proud — about their country as I am to have the privilege to lead it.

Thank you very much.

 

This is obviously a parody, but if Malcolm Turnbull were to deliver this speech, upon formally claiming victory in the 2016 election, what sort of response do you think he would receive?

Oh, and a note to Liberal Party backroom people: if you’re interested in the reform ideas on Health, Education, or parliamentary reform that flesh out the rhetoric in this hypothetical victory speech, you know where I am. We don’t need to telegraph those today.

 

GST, Banks Must Feature In Tax Reform Debate

ANY DISCUSSION OF TAX REFORM in Australia must — almost by definition — include revisitation of the scope and rate of GST, and the attendant prospect of steep cuts to direct taxes; rank populism by the ALP (which modelled a GST hike in government and now claims such a change to be a “breach of faith”) should be disregarded, as long-term structural considerations are placed above ridiculously destructive partisan politics.

I have been reading a very good opinion piece in The Australian this morning, which neatly sums up both the challenges facing Prime Minister Tony Abbott in any contemplation of the GST as part of any wider attempt at tax reform, and the rank opportunism of the ALP (and some of the states) that such a discussion has already provoked.

I have to keep this circumspect today, as I am — as readers already know — quite busy at present, but there are nonetheless some key points I should simply get onto the table.

The most obvious of these is the fact that of all the taxation options available to the government (and with an eye to the escalating and recurrently growing demand for revenue by the federal government sector), the GST stands almost alone as a mechanism capable of delivering an expanding growth stream of taxation revenue.

Hot on the heels of this is the revelation, widely reported in yesterday’s press, that the ALP itself commissioned Treasury modelling in office to observe the effects of a modest GST increase of its own, raising the rate from 10% to 12.5%.

Such an increase, in my view, does not go far enough: the switch in the “tax mix” from taxes on income to taxes on expenditure is both urgent and critical, as the share of government revenue contributed by income taxes continues to fall over coming decades as the workforce ages, shrinks, and casualises.

And contrary to the deepest desires and ideological dogma of the ALP and (especially) its bed buddies at the Communist Party Greens, simply hitting “the rich” ever more heavily to try to claw back the difference is counter-productive and will also prove self-destructive in the longer run.

In his article, Paul Kelly hits the nail on the head, and his summation of Labor’s mentality on this question — that merely seeking public consent and/or seeking to engage in a comprehensive and rational debate about GST reform is a “breach of trust” — could as easily apply to the ALP approach to virtually any area of government that requires overhaul, and which Labor in power, despite the robust position it inherited, mostly squibbed.

For mine, a GST rate of 20% applying to everything aside from medical treatment — with accompanying steep cuts to income tax scales, along with boosts to pensions, and perhaps a further lifting of the tax-free threshold and/or the absorption of fuel excise collections into the GST net — makes perfect sense. This, and any options for GST reforms up to and including this position, merit consideration at the very minimum, irrespective of whether they are subsequently adopted or not.

But in the current, toxic political environment — in which even the consideration of raising one tax is used as a crude populist battering ram, irrespective of any potential offsetting measures — such a debate seems unlikely to eventuate, and it will be Australia that will be the worse off for it.

A simple measure of this contention will lie in the fact that comments to this column, if they follow past trends, will simply ignore my own advocacy of cuts to marginal tax rates and increases to social security payments, and simply pillory me for arguing that a doubling and broadening of the GST should be contemplated at all.

Some who come here looking to sink the boot into “Tories” may resist the urge to engage in such blinkered abuse. I will believe their restraint, quite literally, if I don’t see the evidence otherwise.

 

AND ANOTHER THING: readers have been surprised in the past to find this column — usually devoutly liberal in its economic views — advocating for a windfall tax to be applied to profits generated by the banking sector.

There is a difference between a free market returning healthy profits and plain, old-fashioned price gouging, and any group of four companies that cumulatively reap after-tax profits equivalent to roughly 5% of the country’s entire GDP demonstrates the shortfalls of prudential regulation that singularly ignores the difference between the two.

With Australia’s so-called “big four” banks hauling in clear profits of about $75 billion last year, the problem has gone beyond a joke; the retail banking sector uniquely defied the Global Financial Crisis to record consistent profit growth — in part, due to government intervention and monies expended by the Rudd government — and largely off the back of a fees, penalties and charges regime that is not grounded in any reflection of the true costs of providing these items.

This column repeats its assertion that a windfall tax should be applied to all profits recorded over a nominated threshold — say, $5 billion per annum per “banking group,” to remove the incentive to spread black ink through a plethora of subsidiaries — and levied at 50% of all revenues above that level.

Such a tax would raise about $40 billion based on last year’s figures, and whilst its yield would fall if met with cuts in banking charges in response, the measure would nonetheless deliver a win for consumers as it restored money pried from their pockets one way or the other.

$40 billion buys a lot of health and education funding, repays a fair whack of government debt each year, or funds quite a slather of other worthy government expenditure that currently eludes reality.

 

Discussion Forums On Reform In Australia

BETWEEN NOW AND CHRISTMAS, The Red And The Blue will be looking at reform in Australia in a series of articles designed to consider what steps this country might take under a re-elected Abbott government, and what models of reform might best befit a conservative administration seeking to safeguard our prosperity, productivity, institutional rigour and social obligations in the longer term. We will be blunt, and advocate daring.

I know I am probably teasing a little this morning, although that’s not necessarily such a bad thing; having indicated a week or two ago that I wanted to introduce a dedicated focus on reform into the column over the next little while, my post today is really aimed at tilling the turf in preparation, and to gather some feedback (either through the site or, for the very small handful of readers I know personally, on a more direct basis) as to the areas people believe are the most important — or urgent — aspects of governance that are in need of an overhaul, along with some ideas to get us started.

I read an article in The Australian last week by its regular columnist Peter van Onselen, which was timely in the context of mooted discussion, broadly, of reform agendas here; I wanted to share it this morning because PVO makes two excellent core points: one, that the onslaught of a trivial, inconsequential and completely obstructive brand of retail politics in recent years has all but derailed serious attempts at reform in Australia; and two, that the “ideological breakdown” of the major parties has sapped them of the vigour and drive to pursue meaningful change, and to ensure this country’s institutional framework continues to evolve in lockstep with both the people who live in it and the rest of the world.

It’s a good read, and the reason I want to start here where any consideration of reform is concerned is very simply because the task of prosecuting fundamental change — always a difficult pursuit at the best of times — is growing ever harder, and the evolution of political parties into risk-averse, professional outfits that eschew decisions which might cost votes is compounding Australia’s inability to continue to engage in and enact meaningful reforms that will help perpetuate our way of life for generations to come.

I fear, some days, that politics is becoming a zero-sum game: you’re not allowed to produce losers. Nobody can be worse off. Everyone has to be given something. Everything can be spun or explained away, and people can be hoodwinked and justifiably deceived. But whilst this process continues, less and less of any consequence actually gets done or resolved.

Yet vested interests and  gravy train passengers in the system are accorded the right to hoard their haul within closed citadels; there are many institutional cabals whose comfort and relative decrepitude sit undisturbed whilst the great silent majority of Australians is ignored, ripped off or otherwise sold down the river when in reality these sinecures are ripe for overhaul, modernisation, or outright abolition.

Readers know I publish this column with a lifetime of loyalty to the Liberal Party under my belt; it doesn’t stop me being critical of the party from time to time when I think it appropriate, and it doesn’t preclude me from looking outside the paradigm of published Liberal policy for ideas that might work, and which in the contemporary sense might make a government that’s off to a reasonable start so much better.

And of course, it goes without saying that for there to be good ideas, there must be bad ideas as well; if these forums go as I think they should, I’m sure there will be a few howlers that materialise (and on that score, when the time comes, if anyone thinks “2% EzyTax” is a good idea, then please go and advocate it somewhere else: it’s been kicking around for decades, it stinks, and it’s just a recipe for economic anarchy).

But as a conservative of some drive, even the presence of a government in Canberra toward which I am favourably disposed can be frustrating as even moderately sensible ideas are shelved, brutalised or discarded altogether by the bear pit that masquerades as a “modern” Senate; and with the clear two-term strategy with which Tony Abbott was elected — to formulate reform proposals during a first term, and seek a mandate for their implementation during a second — I have little confidence any productive fruits of this process would be harvested at all, so one-dimensional has the culture of bloody-minded oppositionism and Senate savagery become.

Still, I think it’s timely to now spend a little more time considering such concepts.

What I am looking to develop during this process is a debate around sensible ideas and models of reform, dealing with specific areas on a discrete basis, and around which a case can be made for their adoption and implementation by whomever is in power in Canberra.

Whilst all views are welcome in the conversations that develop around my articles, it goes without saying that I am most interested in ideas that fit the model of small-state, economically liberal, modern conservative governance, where an emphasis on efficiency and probity in process is mirrored by an emphasis on incentive and reward to the individual, and with core constituencies of family, business, the aged and the defence services occupying prominence of focus.

Left-inclined readers who I have just outraged by omitting health and education, never fear: we will get to these, although when it comes to enforcing outcome standards on teachers, for example, and outlawing the collective agreements in this sensitive area that galvanise and nourish militant unions whilst entrenching mediocrity, some will wish we didn’t.

And I must emphasise that I think there needs to be an element of risk — political risk — injected into any discussion of national reform; if the idea is sound and the sales and marketing resources adequate, tough reforms can be sold, even if it’s a close-run thing.

One criticism I have long made of “government by advisers” (aimed mainly at the Left but, as van Onselen notes, the affliction has crept into the Liberal Party too) is that the imperative of pleasing everyone and offending no-one is just as destructive as the collective refusal of the Senate to allow a government to get on with governing. Either way, very little ends up getting done.

Margaret Thatcher once said in an interview (ridiculing, as she did, the consensus culture of socialised postwar Britain before 1979) that had key figures in history — arguably, the architects of what we now know as modern civilised society — set forth and proclaimed “brothers, I believe in consensus,” the world would have nothing great; nothing of substance; nothing of value.

She was right, of course. The same sentiment is more simply expressed in the notion that in order to make an omelette, one must break a few eggs.

There are plenty of targets; the areas I particularly intend to focus on (in no pre-determined or particular order) are a reform of the Federation, electoral reform, labour market reform, welfare reform and taxation reform.

Yes, taxation reform: it’s a bit surreal to think that 17 years have now passed since John Howard first announced the renunciation of his “never, ever” GST pledge and his consequent determination to fight for such a measure as part of a broader overhaul of the nation’s taxation arrangements; tax reform is one of those moving targets that by its nature is never going to be completely nailed, and you could hardly describe anything that occurred on the Rudd-Gillard-Rudd watch, or the incompetent antics of the Labor regime’s allegedly world-beating Treasurer, as anything akin to continued reform in this area.

I think there’s now a lot more work to be done on tax reform, and it’s becoming urgent, as population changes and the evolution of the broader economy conspire to render existing arrangements increasingly inadequate.

I know many readers have been waiting for the whole reform thing to spring up in this column; some of what I cover and propose has been talked about here before, and some of it will be new.

But I do very much hope to see more comment and discussion in going down this path; after all, I know that on raw numbers less than 5% of all visits result in a comment being left (which is actually bang on the average response rate for this kind of media) and that of that 5%, comment is overwhelmingly made by about 15 or 20 readers when hundreds of people come here each day, read what is posted, and don’t contribute at all.

But in closing what is obviously an article to till the ground for some more substantial pieces — perhaps beginning next weekend, perhaps midweek, depending on how my week develops — I should just say that with public confidence in politics, politicians, government and the country’s institutions seemingly at historic lows, there are things that can and should be done to help remedy this.

With serious, meaningful debate seemingly sidelined in favour of idiot-simple answers and all-in parliamentary brawling, especially in the Senate, some way needs to be found to fix what appears to be approaching an unworkable system of governance.

And with the inherit reluctance of people to embrace change compounded by mindless political cultures predicated on slapping down anything produced by opponents on sight (the merits or otherwise not in question at this juncture), real damage is being inflicted on Australia’s short-term and long-term economic welfare, which in turn can only jeopardise and impede the country’s living standards, communities, and long-term prosperity.

Bold new conservative ideas for bold solutions to growing changes: please feel free to let me know which subjects, in addition to my own “first targets” you would like us to cover, as well as any ideas you are happy to put on the table before we get things under way.