Friday, October 30, 2015

Turnbull has golden opportunity

The question now facing Malcolm Turnbull is what to do with his 58 per cent satisfaction rating.  Being the preferred Prime Minister by 63 per cent of Australians is nice for the time being, but both Kevin Rudd and Julia Gillard were once pretty popular too.

Turnbull still has time to decide his agenda, but maybe not as much time as he thinks.  MPs get impatient with party leaders quicker than the public.  The reality is that a PM or opposition leader is more likely to be struck down by their colleagues than by the electorate.  Since 1983 the Liberal and Labor parties have each changed their federal parliamentary leader 10 times.  Only three of the changes each party made was the direct outcome of a federal election.  As traumatic as it was, the manner of Tony Abbott's removal as Liberal leader, albeit that he was the prime minister, is not unusual.

There's one thing Turnbull shouldn't spend his political capital on — and that's raising taxes.

For two reasons.  The first reason is that he shouldn't even be contemplating raising taxes.  Australia is already a high-tax country.  As the Productivity Commission pointed out a few weeks ago in its report Tax and Transfer Incidence in Australia if taxes across countries were compared on a like-for-like basis "taxation revenue as a share of GDP from all other sources would be higher in Australia than the OECD average".

The commission's finding, which confirmed my own research, received no media coverage.

The second reason Turnbull shouldn't spend his political capital on raising taxes is that raising taxes is easy.  One of the few budget measures Tony Abbott got through the Senate was increasing the top rate of income tax.  Political capital should be spent on hard stuff, not the easy pickings.

There's one thing that's even harder to do in Australia than cutting government spending, or restoring freedom of speech although it's not as hard as Turnbull seems to think it is.  Does anyone honestly believe that in a free country it should be against the law to insult someone?

What's harder than any of these things is changing the industrial relations system to make sure it is about one thing and one thing only — getting people into work.  Hopefully Turnbull will turn out to be not quite as "progressive" as his left-wing boosters in the media would like him to be.

But, if Turnbull as a Liberal prime minister is going to spend his time giving exclusive interviews to The Guardian the least he can do is use the left's own language to make the left understand industrial relations reform is a question of social justice.

Nothing could be fairer than ensuring an individual has a job.  There's nothing fair about an unemployment rate for 15 to 19 year-olds of 20 per cent.  It is unfair that an adult Australian is forbidden from choosing to work for a wage of $17.28 per hour, because a government committee has decided the minimum wage should be $17.29 per hour.

Turnbull could point out to Guardian readers that Denmark, the country they want Australia to be like, doesn't have a statutory minimum wage, and neither do Norway or Sweden.

The Prime Minister's current preferred formulation for his vision of Australia as "a high wage, generous social welfare net, first-world society" is the jargon of economists.  As Goethe said:  "Dream no small dreams for they have no power to move the hearts of men."

If Turnbull wanted to blow his political capital well and truly he could banish the terminology that dominates the "reform" debate.  He could not talk about "productivity" or "GDP per capita" and he could even abandon the three-word-Holy Grail of the Coalition — "industrial relations reform".  All of these things are merely abstract concepts.  They say nothing about human flourishing.

In their place Turnbull could say something more important and meaningful.  He could for example say something like his government will be judged on how many people who want a job have a job.  Or how fewer families live in poverty.

The Prime Minister has the chance to reset what passes for the national conversation.  He should take it.


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