The parliamentary year is almost over and the government still has to get key legislation through a fractured Senate, including the tertiary education reforms.
Prime Minister Tony Abbott conceded the last week had been tough in a marathon, 45-minute media conference this morning, following his comments last week that he would seek to knock “one or two barnacles off the ship” before Christmas.
“I’d be the first to admit that last week was a bit of a ragged week for the government,” he said. “I know that appearances do count and I concede that the appearance last week was a bit ragged but, in the end, nothing matters more than performance and this is a government which has a very solid year of performance under its belt.”
It started with the PM’s office briefing journalists that the $7 GP co-payment would be ditched, only to have his ministers make contradictory comments and leave the plan in chaos.
Today, the government has abandoned plans to cut leave entitlements to defence force personnel and to increase interest payments on university student loans.
“Defence pay and defence allowances are paid out of the overall defence budget,” Mr Abbott said.
“So the $17 million that it will cost to restore these allowances will come out of the defence budget. There won’t be extra money put in.”
The troops get a 1.5% pay rise, but won’t have to give up leave after the PM announced a backdown this morning, although newly independent senator Jacqui Lambie is still threatening to create more havoc making the passage of legislation through the Senate tougher for the government.
Then there was defence minister David Johnston, essentially confirming that the Government’s pre-election pledge to build 12 new submarines locally would be broken when he declared he wouldn’t trust the Adelaide-based, government-owned Australian Submarine Corporation “to build a canoe”, forcing the PM to go into damage control.
Meanwhile, education minister Christopher Pyne also dropped plans to raise interest rates to the bond rate rather than inflation on university HELP loans. He’s also agreed to a no interest freeze for five years for those who take time out to raise children.
And there could be further changes to the proposed tertiary education reforms.
Mr Abbott said talks with Senate cross-bench continue this week, the last sitting of the year.
“I don’t presume to know what the final outcome will be but we are determined to deal with this matter one way or another in this final sitting week of the year,” he said.
While answering questions today, Abbott went as closer than ever to admitting that he broke a pre-election promise of no cuts to the ABC’s budget with a $254 million efficiency dividend, saying “I accept that what we are doing with the ABC is at odds with what I said before the election”.
Now the government has to deal with the fallout of Victorian election on the weekend, with Labor back in power after just one term of Conservative rule – the first time the voters have been that fickle in 60 years.
That dramatic turnaround has emboldened federal Labor under Victorian Bill Shorten.
And new estimates show the federal budget is in trouble, with Deloitte Access Economics saying revenues will fall short of forecast by $2.3 billion in 2014-15.
The extent of the budget blowout will be known sometime in the next two weeks when Treasurer Joe Hockey is expected to release a Mid-Year Economic and Fiscal Outlook (MYEFO).
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