The Canberra Quarterly Presented By Inside Canberra’s Michael Keating

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Inside Canberra’s Editor-In-Chief Michael Keating provides a summation of Canberra’s political landscape for the first quarter of 2017.

New Ministerial Arrangements

The Parliamentary Year started off early on Thursday the 19th of January when the Prime Minister decided to reshuffle the Ministry. The changes were due to the resignation of then Health Minister Sussan Ley MP on Friday the 13th of January due to using time paid for by her entitlements to buy a private property.

New arrangements saw the elevations of Greg Hunt to Minister for Health, Arthur Sinodinos as Minister for Industry, Innovation and Science and Ken Wyatt as Minister for Aged Care and Indigenous Health. The new Ministry was sworn in on Tuesday the 24th of January.

Parliament commenced at the start of February with politics dominated by the new President of the United States, Donald Trump.

Both Party leaders delivered headland speeches which sank without trace in the hot media of talk-back radio and twitter. There was some interest among the gallery in the proposal to subsidise coal red power and a passing interest in Malcolm Turnbull’s electoral donation of $1.75 million, but it was all overshadowed by President Trump.

The key to it all was the Prime Minister’s conversation with the President over the weekend confirming the US would proceed with a deal to take 1,250 refugees from Manus Island and Nauru. Mr Turnbull’s understanding was that it was a done deal, but then the White House press corps told the media that the deal was still under consideration. Only after this had generated a considerable amount of confusion did State Department officials confirm that the deal would proceed.

The Prime Minster also had a first call with the new President of the United States. “It should have been one of the most congenial calls for the new commander in chief – a conversation with the leader of Australia, one of America’s staunchest allies, at the end of a triumphant week.” At a press conference the Prime Minister refused to comment on the phone call.

The depictions of Trump’s calls are also at odds with sanitised White House accounts. The official read-out of his conversation with Turnbull, for example, said that the two had “emphasised the enduring strength and closeness of the US – Australia relationship that is critical for peace, stability, and prosperity in the Asia – Pacific region and globally”.

Corporate Tax

The big issue in Parliament in March was the government’s centrepiece policy of corporate tax reductions. The plan proposed to gradually cut the corporate tax for all companies from 30% to 25% over ten years. The first stage is a cut from 30% to 27.5% for businesses with a turnover of less than $10 million. The cuts for larger companies take place in the ensuing years. At that time the Senate was prepared to accept the cuts for companies with turnovers of less than $10 million but reject the rest of the plan. That meant that the government will have to come back year after year to seek further cuts, the implementation of which will depend on the circumstances at the time.

Labor has waged a torrid campaign against the government’s tax plan characterising it as “tax cuts for billionaires” and “$50 billion tax cuts for the big end of town” and contrasted this with spending cuts that affect low and middle income earners. Defeat of the tax cuts is critical for the opposition because it has used the $50 billion worth of cuts, which are currently contained in the budget, to fund many of the policies it intends to take to the next election, including increased spending on schools and hospitals.

Bob Day

The make-up of the Senate changed when the High Court, sitting as the Court of Disputed Returns, decided that Bob Day was ineligible to stand for election at the last ballot. The basis of the decision was that he was in a position to directly or indirectly secure a benefit from the crown because he owned a building which he transferred to a friend who then sought to negotiate a lease with the Department of Finance, the proceeds of which were to be paid to the Day family trust. Apart from Day’s electoral office the building housed the conservative Samuel Griffiths Society, the Australian Taxpayers Alliance and the Family First headquarters all of whom support low taxes and minimal government finances.

Media commentators have made much of Bob Day’s hypocrisy in trying to rip off the government: the irony is that he paid the rent for the whole time he was in the building and the Commonwealth didn’t hand over a cent. Nevertheless the High Court adopts a Caesar’s wife approach and so found Day ineligible and ordered a recount. Labor argued the Australian Electoral Commission should discount the effect of Bob Day’s party following but the Court rejected this which means that the number two on the Family First ticket will probably be elected. She is Lucy Gichuhi, a lawyer and accountant who was born in Kenya but immigrated to Australia in 1999. Unlike Bob Day whose main interest was urban development, Ms Gichuhi’s areas of concern are immigration and women’s legal services. At this stage there is no indication that she will support the government as emphatically as former Senator Day did.

Treasurer Scott Morrison has had a go at big business for not being sufficiently enthusiastic about tax cuts. He said that the community did not trust the top end of town and so the government was having a hard time selling the cuts. He added that if business continued to sit on the fence it would suffer reputational damage. Mind you when business took up the popular issue of marriage equality in an attempt to show that it has a social conscience the government stuck the boot in.

Who Will Replace Tony Nutt?

The announcement that Alexander Downer would remain in London until the end of the year put an end to the rumours that he would return to take over the leadership of the South Australian Liberals and subsequently become Premier after the March election. However another Liberal luminary, Nick Minchin who’s currently Consul General in New York, will return to Australia shortly. Since Tony Nutt announced his resignation and with the likely prospect of a damning report from Andrew Robb on the way the last federal election campaign was run, thoughts have turned to who will succeed Nutt.

The party could do worse than give Nick Minchin the job, at least until after the next federal election. Former Senator Minchin has been a successful secretary of the South Australian branch of the Liberal Party and has had the ear of a number of Liberal leaders. He has very good political instincts which the Turnbull government desperately needs at the moment. He’s from the conservative wing of the Liberal Party but is not a social conservative. Most importantly he would probably be able to work with Tony Abbott to convert him into a team player.

Of course, he won’t get the job.

Malcolm Turnbull won’t have forgotten that Nick Minchin masterminded the coup against him when he was leader of the opposition. Turnbull will want a rusted-on supporter from the moderate wing of the party to run the organization, but successful backroom operators from the moderate wing who have run successful campaigns are thin on the ground. One of those is Senator James McGrath who’s run successful campaigns in London for Boris Johnson and in Queensland for Campbell Newman.

The Here and Now

It’s been another bad run for the government. Any message it was trying to get out on economic management prior to the budget has been swamped by a nebulous debate over housing affordability and the proposal that young first home buyers should be able to access their superannuation accounts to fund the deposit. This proposition was never likely to pass the Senate and, given the public’s ambivalent response, it was a mistake to raise it.

The way the government’s handled the issue has highlighted the matters raised in the Robb report on the government’s dismal electoral performance. In that report there was a specific reference to the absence of polling during the run up to the election. On the issue of housing affordability, it defies common sense that proposals weren’t road tested before they were put into the public arena. Even worse, the policy has generated a rift in cabinet and the government at large.

We also had the unseemly argument over ‘work for the dole’ with the Minister for Employment Michaelia Cash having to assert that the programme will not be changed in the face of comments made by members of the government that the policy is a “heap of shit”.

Moreover the Prime Minister’s visit to India has turned out to be difficult. He’s canned the Abbott initiative for a free trade agreement as being too hard and has nothing else to show for a head of government mission. The discussion of opportunities in the vocational training area was no more than aspirational.

The government’s thrashing around confirms the opposition’s claims that it’s in trouble and lacks a plan for the country. It needs to take control of the agenda and to do it quickly but at the moment it seems bereft of ideas.

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