A tale of two strategies

04:39, May 20 2014
Stephen Mills
PROFILE: Stephen Mills is a Labour-aligned market researcher and political pollster. He owns and is executive director of UMR Research.

The centre right governments in Australia and New Zealand served up starkly different Budgets last week.

Even given the National-led government is only four months from an election and the coalition in Australia is probably two and a half years away, the contrast could hardly be starker.

The Australian Budget imposed a $7 fee on previously free visits to the doctor, prompting widespread outrage. It was described as "a price signal". The New Zealand Budget removed all such price signals for GP visits for 6-12 year olds, to widespread acclaim. This move was praised by commentators as cleverly spiking the guns of the centre left in September's election.

The New Zealand Budget is a good example of political triangulation. This tactic is most closely associated with Dick Morris, President Clinton's most celebrated pollster. He is attributed with rescuing the Clinton Presidency in 1996 by advising him to go into traditional Republican territory notably on balanced budgets, tougher welfare policies and deregulation. The theory is you hold your base voters, who may not be happy but have nowhere else to go, and then pick off voters from the other side of the political spectrum.

National's current high level of support includes many who would have often voted Labour up to at least the 2005 election. Holding them is crucial to National's re-election. They were highly uncomfortable with part privatizations in 2011 but stayed on board. They will be much more comfortable in a campaign focused on the extension of free doctor visits, paid parental leave and increased payments to families. A number of commentators have observed that this Budget could have been written by Michael Cullen.

It will be interesting to see if the $1.5 billion earmarked for National's election campaign spending announcements goes on tax cuts or on further government social spending initiatives to try to close off other centre left political opportunities.


There is a cynical element to this. John Key described Working For Families as "communism by stealth', when he was in the opposition. Now further taxpayer support for working families is a centrepiece of his 2014 campaign.

The aforementioned Dick Morris was a dodgy "whatever it takes" type who went into temporary disgrace when a prostitute revealed, along with other embarrassing details, that he had let her listen in on a phone call to President Clinton. He later triangulated himself and is now a Republican political consultant.

There is no sign of any triangulation in the Australian Budget. Apart from a weirdly out of place super generous parental leave scheme designed to deal with Abbott's low appeal to female voters it is a crazy-brave right wing Budget.

Far from spiking opposition party guns it has flung open the doors to the armoury. In the last few years commentators have written hundreds of earnest articles speculating on whether the Australian Labor Party (ALP) had a future at all. Leaks on the Budget have already driven ALP support to levels not seen since the Rudd glory years.

The Budget has given the ALP a huge free kick on broken promises. In the campaign, Tony Abbott, using all the simple repeat messaging he thrives on made unqualified pledges on no new taxes, no changes to pensions and no cuts to health and education.  These are already available to download as mocking ringtones. The opportunities for the ALP advertising agency are bounteous. They may just run photographs of Abbott grinning in front of his giant election billboards showing his signed and now worthless pledges.

Of perhaps even greater political value, the ALP has in one stroke had its traditional positioning of representing the interests of the low and middle income families, looking after pensioners, defending Medicare, caring about education and jobs, and looking after the vulnerable, spectacularly reinforced. The Liberals have vacated the field.

Abbott and his treasurer Joe Hockey have also torn up the Howard game plan of securing by any means possible the support of the Howard battlers - the election-deciding swing voters on low to middle incomes living in outer metropolitan suburbs. A hard line on asylum seekers and scare campaigns on mortgage rates were critical to that but this group is always under financial pressure and John Howard and (according to his biography) a reluctant Treasurer Peter Costello hurled money at them with tax cuts and supplementary income payments.

The National Centre of Social and Economic Modelling has calculated that a single income family with two kids and earning $50,000 to $100,000 could lose more than  $6000 a year when all Budget changes are implemented, That is a serious income reduction for voters used to the Government giving them money.

The politics of the Australian Budget seem so bad that you can only conclude that Abbott and Hockey must genuinely believe they are doing the right thing and will receive the electoral rewards of a booming economy in 2016. That though, is the political equivalent of trying to draw an inside straight.

The last crazy brave Budget in New Zealand was way back in 1991 with Ruth Richardson's self-styled Mother of all Budgets. There are eerie parallels to current politics in Australia. A not particularly popular National leader Jim Bolger won a landslide victory against a divided Labour party, which had been chaotic in Government and changed leaders just weeks before the campaign. A radical right first Budget slashed welfare payments and broke an unambiguous campaign promise ('no ifs, no buts, no maybes') not to cut pensions,  In the next 1993 election National barely survived securing power only when a Labour MP Sir Peter Tapsell agreed to become Speaker.

Jim Bolger promptly sacked Ruth Richardson and there have been no brave Budgets since. The Key and English path is much likelier to lead to electoral success.  

Stephen Mills is a Labour-aligned market researcher and political pollster. He owns and is executive director of UMR Research.