THE election is over and as far as Scott Morrison is concerned, no more Mr Nice Guy.
Treasurer Morrison is now out of the shadow of the campaign and determined to attack government spending — even in the face of party and electorate protests.
Mr Morrison’s determination should not be underestimated.
It coincides with an informed view that Australians are asking more from government than taxpayers can fund in the long term, and that the swollen deficit is threatening the nation’s public and private finances. And that means the sustainability of programs valued and taken for granted.
The Treasurer’s pre-Budget insistence that any new spending had to be off-set by savings was subdued during the campaign, but now it is back and growling.
If the Government surrenders on these matters, someone else will have to pay a price.
“Where and if there were to be changes to anything in that Budget, then obviously there would need to be alternative ways of addressing any impact on the Budget position,” Mr Morrison said on Thursday.
“There are no exceptions to those fiscal rules.
“What is absolutely critical is not only that we stay on the trajectory of Budget repair that we set out in the Budget…but that we legislate through the Parliament those savings and other measures to ensure the integrity of the Budget.”
Note the reference to “other measures”. Mr Morrison hasn’t finished cutting.
However, the Treasurer and Prime Minister Malcolm Turnbull face massive political obstacles, including a finger-nail hold on government in the House of Representatives and a minority in the Senate.
The Budget of May 3 is at risk, as are proposals still hanging around from the 2014 Budget.
First up, they have to deal with internal Liberal opposition to proposed changes to superannuation laws, in particular the $500,000 cap on after-tax contributions, calculated from 2007.
This should be a flyspeck of outrage compared to the other matter Mr Morrison must confront. It should take more than north Queensland National George Christensen to shift policy in this area.
Malcolm Turnbull has indicated there could be some alterations during “fine tuning that goes on with any changes to taxation”.
But yesterday he told 3AW: “The policy is one which has … recovered money for Budget, Budget repair and for other purposes.
“And what we have done is made super fairer. The people that have benefited from these changes are people who are on low incomes, whose superannuation tax is being picked up — older Australians and women.”
The strongest political asset the Prime Minister has is the fact the superannuation changes had little influence on the election outcome, no matter what a handful of his colleagues might say.
Medicare, however, is another matter: “But the Mediscare, (Labor’s) Medicare lie had a very high impact.”
There is sustained pressure from doctors to unfreezing the Medicare rebate, now planned to last two more years for a total of six. They are warning they will have to increase charges to patients to pay for overheads.
And the provision of bulk billing could fall.
To get an idea of the money involved, Labor’s promise to restore indexed increases in the rebate from next January 1 has been calculated to cost $12.2 billion over 10 years.
Health Minister Sussan Ley wants to bring forward the un-freezing, but is under pressure from Finance and Treasury to get big savings from health.
There is a strong argument that funding GP and other primary care services saves money spent on greatly more expensive hospital care.
But the savings right now are too big for the Turnbull government to ignore.
However, if it relents on the rebate for GP services, it will face extra expense elsewhere in the primary care area.
The Medicare rebate for diagnostic services such as radiology has not been increased since 1997, and the gap the patient has to pay now ranges up to $150 for the high level, life-saving procedures.
That’s enough to deter low-income earners from using the services. During the election campaign Health Minister Sussan Ley, in the face of a threatened campaign by the sector, said the situation would be evaluated after the campaign.
The fact of practical politics is that if the freeze on GP rebates was lifted, the diagnostic rebate stall also would be ended.
Industry sources calculate that if the freeze went on January 1, the cost to the Government from the diagnostic area would be around $4 billion over 10 years.
So a retreat on the freeze could cost government a total of $16 billion over the coming decade.
Hard to see Scott Morrison taking that type of Budget hit.
“So it is important that we do not lose sight of the bigger picture of the need to keep the integrity of the Government’s fiscal position and to stay the course and keep pace with the course for that fiscal improvement,” Mr Morrison said.
“We put our Budget to the Australian people and we have been returned as a Government and we have a mandate to ensure that we continue the course of Budget repair and you can be assured that the Prime Minister and I and the entire cabinet will remain committed to that task.”
Cop that, George Christensen.
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