Tony Abbott’s big budget mistake

Tony Abbott has made a fundamental mistake in his plan to convince Australians to adopt tough budgetary measures: he has not given them a vision of a better future for Australia. The Prime Minister and his Treasurer, Joe Hockey, just preach pain and more pain, leaving Australians with no hope.

In contrast, the man who did most of the early legwork in planning the detailed cutbacks when he was shadow finance minister, Andrew Robb, always made sure there was a clear vision of future prosperity at the end of the tough times as he sold his plan to fellow Liberals.

When Robb was made minister for trade and investment, Abbott, Hockey and Mathias Cormann took over the crafting of the harsh measures and, unfortunately, Robb’s vision for the future slipped through the cracks.

A key part of Robb’s vision was that massive development of the country’s north would, in time, replace the inevitable decline in mining investment after the boom. And that northern development would be part of a much closer engagement with Asia. Robb also believed that if Australia got its building act together -- as the Coalition is doing -- it would attract further mining investment as well as investment in the developed cities.

Recovering that vision from the Coalition waste bins will be essential if Abbott is to regain credibility with the electorate. And without a reasonable level of credibility among voters, managing the parliament will be close to impossible.

That’s why next month’s Northern Development Summit in Townsville suddenly takes on a whole new level of importance. It’s no surprise that the man leading the summit is Andrew Robb.

But while northern development sounds warm and cuddly for Australians, in fact it raises many issues that could divide the nation. The Chinese and others in Asia want northern Australia as a significant food supply bowl. They will invest as many tens of billions into the development as we will allow. The question will be how to control such a massive investment, which potentially could be bigger than the mining investment boom. How do we handle towns and regions that may be built, owned and substantially operated by Chinese? The summit will have to tackle those issues. 

A northern Australian development boom would transform Australia and make Abbott's apparent ‘horror years’ at the end of the decade and in the 2020s much more exciting for Australians -- something worth the pain of the 2014-15 budget.

As it happens, in the budget are capital cities infrastructure projects and the medical research foundation which will deliver better prospects in the developed parts of the country in future years. But these actions have been swamped by pain, and the Robb vision for better health and education, which was attached to his initial tough measures, has been lost.

At the moment, Tony Abbott gives no hope, just both current pain and future pain. Unless he wakes up and goes back to the original Robb plan he will be a one-term Prime Minister.

Footnote: If Tony Abbott wants advice on how to do a slash and burn, he should contact former Victorian premier Jeff Kennett and his Treasurer, Alan Stockdale. They were even tougher on the Victorian economy than Abbott is being on Australia but Kennett and Stockdale never forgot the longer-term vision and they won the next election. Victoria is still benefitting from their actions.