Features Australia

Not in Howard’s image

The PM’s tax changes mark a betrayal of his mentor’s legacy

7 June 2014

9:00 AM

7 June 2014

9:00 AM

The morning after the budget, the repudiations predictably arrived. But there is no doubt that one critique hurt Tony Abbott more than others. ‘I wouldn’t underestimate the impact of [the budget] on the disposable incomes of a lot of people in the low-to-middle,’ John Howard told a breakfast gathering in Brisbane. ‘I’m the father of the family tax benefit system so naturally I defend it. And family tax benefits are not welfare payments; they’re tax breaks for couples who have children; and we all know it costs money to have children and it never ends.’ The former PM went on: ‘Because of my view about the status of family tax benefits, I think in reality the constraining of tax benefits is in effect a tax rise for people in certain income tax brackets and that’s something that has to be borne.’

The Canberra press gallery has missed the significance of Howard’s criticism of Abbott’s proposed changes to family tax benefits. But make no mistake: there are very real philosophical tensions between mentor and protégé, and they go beyond what is termed ‘middle-class welfare’. Take Abbott’s Paid Paternity Leave programme, or the apology to the Stolen Generations of Aboriginal Australians. In Abbott’s parliamentary tribute to Kevin Rudd last November, he said that Howard had ‘lacked the imagination to grasp that opportunity.’

The irony is that Abbott has long proclaimed himself as heir to the Howard legacy. Shortly after the Coalition’s election loss in 2007, Lateline’s Tony Jones suggested the Liberal party might move on from the Howard era. To which Abbott replied: ‘I obviously have always been very closely associated with John Howard. I think history will judge him very well. I think that in the not-too-distant future this may well seem like a golden age.’

But by reducing middle-class welfare, has the infamous lovechild of Australian politics declared he is ready to throw out the bathwater? Has the Howard legacy suffered at the hands of the man whom John Howard did so much to elect?

Start with the misnomered Family Tax Benefit Part B, which by any serious understanding is a welfare payment, not a tax concession. Under Abbott, it has been severely tightened, in a measure expected to save around $6 billion over five years. Sixty per cent of families with children under the age of 16 receive the benefit, which tells you everything you need to know. While no serious person can argue that a small redistribution of wealth to the least fortunate in society is unwarranted, a programme of this magnitude — where taxes and churned back to people in the form of welfare — is ethically unsound, socially irresponsible and economically unsustainable.

In the UK, Labour leader Ed Miliband has gained much traction out of the term ‘the squeezed middle’. The middle class is not squeezed but powerful: like the UK, our prosperity has created a large middle class majority, and thus a policy removing unwarranted benefits to a great majority of people, while entirely correct, will cause political pain.

Due to the disaster of the Rudd-Gillard-Rudd years, history has been kind to Howard, notwithstanding his stubborn refusal to pass the torch of leadership to Peter Costello before his inglorious downfall. So when Abbott promised a ‘grown-up government’, he evoked strong allusions to his hero and mentor, and the sense of widespread prosperity and stability he represented from 1996 to 2007.

The boom times are over, and the inevitable recession is closer. Forgetting that the act itself tends to be sufficient inducement, Howard created a generation of people who believe that procreation leads to entitlement. While backing away from Howard’s legacy of middle-class welfare is to be commended, Abbott is rendered inconsistent at best through his self-declared ‘signature’ PPL scheme. At the same time as he is dismantling Howard’s legacy of middle-class welfare, Abbott is perpetuating it: he is praising Caesar while he buries him.

Success in mainstream politics means a fusing of the dichotomies of the warrior and the pragmatist. Abbott sold himself as the successor to Howard’s legacy, so unwinding the family tax benefits is a radical shift from his role model’s vision of social policy. In office Liberals, like Tories of old, are prone to show their social engineering streaks. They can’t help but carve a social policy in their own image: it is the gold statue in the town square for the conservative democrat. Abbott’s is a welcome betrayal, but time is a powerful adversary in office. Can the electorate wear the removal of a benefit — an effective tax hike — in the name of reform as it awaits the payoff of lower taxes? Or perhaps more importantly: can Abbott wear the inevitable backlash in the name of reform?

In the Essential Media Poll during the week after the budget, 40 per cent of people thought the budget will be good for the economy — up 12 per cent from prior to the budget. But Abbott’s popularity is sliding: standing up to Howard will require courage which, as Yes Minister taught us, can be a pejorative in politics. Abbott tends to grapple with his internal conflicts more visibly than other politicians: he does not wear his heart on his sleeve, but his viscera around his neck.

The great Tory folly is thinking the state has a duty of care to the family. Neoliberalism won the battle of ideas a generation ago, yet the political class is hooked on the idea of helping. Politicians are perpetually at the bottom of surveys of trusted professions. Theirs is an unwanted intrusion, tempered only by the fact that it always comes with money.

Howard’s legacy is ironic: by making everyone his battlers, he made them his dependents. Abbott needs to take note of the British author Douglas Murray’s maxim that ‘because the status quo is no longer conservative, conservatives must seek to change the status quo.’ Howard will continue to loom large over his friend and protégé. It will take a man of steel to counter him.

Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • Sunray

    Thank you for your insight, but the economy/society needs to be fixed, as soon as possible, particularly the Preferential Voting disaster.