Welcome to another day of being none the wiser about the Turnbull government’s plans for economic reform.
Scott Morrison is clearly energised by his new job. In his address to the National Press Club today he demonstrated an impressive command of detail when talking about some of the global economic realities that are buffeting Australia right now.
But there was a lot of anticipation that Morrison would use today to spell out at least some detail on the kinds of reforms – especially on taxes – that are under consideration as he starts framing his first budget, due in three months time.
We got nothing.
Nothing on negative gearing, capital gains, superannuation concessions, or death taxes — all policy areas which have been canvassed in recent weeks.
There were some broad philosophical statements setting out some intent. He said he wanted his starting point in thinking about the role of policy to be this: “You’re out there trying to make something happen. How can I as Treasurer, how can the government, help you achieve what you are trying to achieve?”
He added that it was “the people that are out there earning that we really have to focus on in terms of economic policy”, and produced this intimidating chart showing how bracket creep will continue to eat into people’s income in the years ahead.
This all sounds like someone clearing the ground for income tax cuts. But he was non-committal on that front, too. He talked about “modest expectations” on tackling bracket creep.
This was a major opportunity to at least outline some policy vision. Instead what we got was policy context.
Context is helpful, but in the volatile environment which Morrison went to great lengths to describe, so is decisiveness.
Australians may not be terribly interested in the nuances of policy formulation, but they do expect the elected officials in the highest-paid positions to be actually doing something.
We’ve just been through an agonising two months of flirting with the idea of a GST increase, which dragged out over the summer before finally being killed off for good as an option just this week.
Negative gearing has also emerged as a potential target for maybe, possibly, being overhauled for some higher-income earners. Potentially.
But that’s not clear now either and more than a million Australians who currently access negative gearing arrangements will still be wondering whether their investment strategy is in the government’s sights.
At least Labor has a clear plan for changes to negative gearing on the table, after announcing their plans to adjust the regime last weekend.
Company taxes are also in the frame, we have been told, although there’s no clarity in that area either. The last we heard was that the government is considering a long-term target for a reduction in the corporate tax, similar to the approach taken by the Cameron government in the UK.
Reforms need not be as ambitious as a grand overhaul of the GST, but surely the government can only talk for so long about all the problems with the tax system before they show that they have some ideas to actually fix them.
One of the big problems with Joe Hockey’s infamous 2014 budget – which will be remembered as the worst-received of the modern political era – was that it was so full of big-ticket surprises. It sowed massive confusion which not only smashed consumer confidence but also marked the start of a slow and painful loss of faith among businesses and investors in the government’s tactical awareness and message management.
It’s now 12 weeks to the budget and there’s the Easter break to come in between. Morrison delivered an extended cricket analogy today about economic reform, saying it was “a Test match, not a 20Twenty big bash”.
Sure, but at some stage even in Test cricket, you’ve got to stop just blocking it and start scoring some runs.
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