If Joe Hockey and the Abbott government’s leadership team had delivered on some of the key points in the former treasurer’s valedictory speech today before the disastrous 2014 budget it’s entirely conceivable both he and the former PM might still have their jobs.
Coming out of nowhere, the measures introduced in May 2014 were unexpected and widely viewed as unfair. They caused a collapse in consumer confidence, with knock-on effects to the business economy, and dug a hole for the government’s popularity that it couldn’t climb out of.
That was despite the rationale behind many of the Budget measures being essentially sound, like intergenerational equality, putting the Australian budget and fiscal position on an even keel, and ensuring entrepreneurs and other business owners received reward for effort.
But the delivery was appalling, took the electorate by surprise and set in train the series of events that culminated with Malcolm Turnbull becoming PM and Hockey retiring after 19 years in politics.
In his final speech in parliament, Hockey struck on some key points that will resonate with the community and which, in the wake of the government’s financial system inquiry response yesterday, look like they are going to become core tenets of Australia’s approach to superannuation and potentially tax policy.
Hockey said we need to increase and broaden the GST so these consumption taxes can reduce reliance on personal and business income taxes. He thinks 40% for high income earnings, 20% for most people and 20% for companies is the right mix.
But in order to deliver such an outcome he took aim at negative gearing and high-income retirees, saying that in order to reduce income taxes, Australia “should be wiser and more consistent on tax concessions to help pay for that, in particular tax concessions on superannuation should be carefully pared back.”
Likewise, negative gearing should be “skewed towards new housing so that there is an incentive to add to the housing stock rather than an incentive to speculate on existing property and we should never ever forget small business.”
A valedictory speech is not the place for rage but Hockey’s message was clear in that the time to act was now and that future generations should not have to pay for current the generation’s welfare breaks.
“It is unconscionable in 2015 to have non-means-tested welfare. How someone in the top 1% of income earners can still qualify to receive welfare payments, free health care or free education is beyond me.”
Hockey said this was unsustainable, unfair and that he would not be “party to a generation that passes the buck. What we have to do is live within our means. We need co-payments in health, greater cost recovery in education, and universal means testing in welfare so that we have a sustainable and affordable social safety net for those most vulnerable in the community.”
It’s a fair bet that a wide part of the community agrees with him.
And Hockey flagged a lot of things the electorate knows or suspected. It seems clear in the early days of Turnbull’s prime ministership that many of the topics he raised will be discussed widely with the Australian people.
As Hockey said today of the Abbott government, it was “good at policy but struggled with politics”.
It’s too bad Joe Hockey saved his best until last.
His full speech is here.
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