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Malcolm Turnbull’s Future Hangs on the May Budget

Malcolm Turnbull’s future is looking more and more precarious.

While there is no move for a leadership spill there’s a growing consensus among the conservative wing of the Liberal Party that the Prime Minister is a dud politician.

His failure to grasp the politics of the penalty rate debate last week confirmed that his political instincts are non-existent.

There is incredulity among members that the government had no material ready to respond to the Labor’s attack on the Fair Work Commission’s decision other than to say that it was all the work of Fair Work Commission (FWC).

The attack followed the same pattern as the assault on the 2014 budget and the ‘Mediscare’ campaign: exaggerate the problem and then find extreme case studies that exemplify the problem and finally sum it up in a slogan that fits up your opponent.

Thus the ACTU put out an analysis full of dodgy statistics (700,000 workers could lose up to $6,000, when the real situation is that 248,000 workers are affected of which possibly 40 could lose $6,000); member after member stood up to raise the case of constituents who they said would lose thousands and asked why the PM wouldn’t ride to their rescue; and finally there was the slogan “tax cuts for big business, wage cuts for low-paid workers”.

Two responses should have been obvious to the government.

The first was to have Employment Minister Senator Michaelia Cash call out the opposition and the union on their dodgy numbers by putting out the real numbers based on ABS and Household Income and Labour Distribution in Australia (HILDA) statistics.

Secondly, it should have had a policy response that would kill the Labor attack.

The obvious approach to take was the one the Prime Minister struggled towards at the end of the week when he signalled the government’s intention to make a substantive intervention to the Fair Work Commission’s transition hearing that has called for submissions on how the penalty rate cut could be implemented.

The government could say that it would seek ‘take home pay orders’ from the FWC that would preserve the pay of the currently employed.

This has been recommended by Kate Carnell the Small Business Ombudsman as meeting the needs of both small business and workers.

It would mean no existing worker would be worse off but newly hired workers would get the penalty rates under the award.

Instead the government has ended up with a mess so they need to pull a rabbit out of the hat in the budget.

And lo and behold! Treasurer Scott Morrison popped up on Sky News on Sunday to announce that there would be a ‘housing affordability package in the May budget’.

Mr Morrison said the package would aim to hit all those affected by the high cost of housing.

“We’re working on a package for the budget … and it will deal with the challenges of housing affordability from those who are reliant on social housing, all the way to those who are trying to break into the home-ownership market,” the Treasurer said.

The Treasurer would not be drawn on whether tax reforms would be part of that package, instead stressing that his focus was broad-based.

It appears that one element of the new policy will be a reallocation of the $1.3 billion finance for national housing affordability agreement scheme developed by the Rudd government.

“It’s basically a one-way cash ATM to the states which asks for nothing in return,” Mr Morrison said.

“We’re handing over $1.3 billion every year and the number of people on public housing lists has gone up, the number of social housing dwellings has gone down … we’ve basically shelled out billions for a program that isn’t doing anything.”

The Prime Minister and the government will hope that the Treasurer can produce a few more substantial policies if they are to be competitive for the next election.

Meanwhile Senator Nick Xenophon has told the media he will announce which savings he can accept on the eve of the budget.

Treasury officials will find this particularly helpful to their preparation of the budget documents.

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