Few political options for Abbott and Hockey in the next federal budget

With the Federal Government backing away from any reasonable chance of reducing the structural deficit in the budget, the political options for the Government are becoming extremely limited.

It is becoming increasingly clear that the government is not prepared to tackle the problem of tax evasion by major international companies, that negative gearing reform is off the agenda, there will be no increase in the GST and that superannuation concessions to the rich are not going to be tackled.

Juggling the budget deficit has become a hot potato for Tony Abbott
Juggling the budget deficit has become a hot potato for Tony Abbott

Addressing any one of these problems would make a significant difference to the deficit.

However, the government has promised childcare  concessions to families and also tax cuts to small business saying that this new spending will need to be covered by savings in other parts of the budget.

Abbott will use the increased childcare subsidies as leverage for the reintroduction of failed policies from the first budget, such cuts to University funding, pension reductions for the “elderly rich”.

He will then brand the Senate, particularly the cross bench as obstructionist, for failing to support the budget cuts and, by implication, failing to support extra funding for families.

It’s a strategy that he hopes will win him electoral support and will close the 8% opinion-poll gap between the government and the opposition.

It might just work.

But the government strategists will need to rise above the abysmal ineptitude of their handling of the first budget if they are to have any chance of success.

Think fully-laden pigs on the runway, flapping their wings.

The Government fantasy will be that the budget will turn around their electoral fortunes and they will be able to call a double dissolution some time later in 2015. The other part of the fantasy is that a double dissolution will clean out the feral cross bench.

It may mean that some current cross benchers will not be re-elected but they will be replaced by another lot, probably equally intractable.

Some Senators will not survive the double dissolution
Some Senators will not survive the double dissolution

There is nothing to suggest that  a newly-elected Senate will be any more amenable to the government, of whatever persuasion, than the present one is.

So Abbott’s options are limited. He has chosen not to take a hardline and produce a budget that addresses the structural problems.

Every year that a government chooses not to do this makes solving the problem even more difficult for future governments.

Tackling tax avoidance by international companies must be a vote winner. Whether it is possible to get these hugely powerful organisations to pay their fair share of tax is debatable but the political kudos from taking them on would be huge.

It’s a massive wasted opportunity.

Abbott is on a hiding to nothing at present.He should take the “strong leader, tough decisions, Australia’s future” approach and crash or crash through.

He’ll probably crash.

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