BY SUE BOLAND
As recently as December, most journalists predicted that Prime Minister John Howard's federal Coalition government would be assured of victory at the next federal election while federal Labor opposition leader Kim Beazley was a sure-fire loser.
Imagine the shock among establishment journalists, as well as politicians, when this prediction was found to be off the mark in the West Australian and Queensland state elections.
Lulled by national polls which showed Pauline Hanson's One Nation party with rock-bottom levels of support, journalists knew there would be a protest vote but they never predicted that there would be such a large protest vote in the two elections that the Coalition parties would be routed.
Now the line of most journalists has changed. Although reluctant to totally write off Howard's chances in the federal poll later this year, most predict that the Coalition will have trouble holding onto government and are now describing the Labor Party as a credible alternative government.
Since the two state elections, federal government fortunes continue to plummet. A Herald-ACNielsen poll conducted on March 10-11 recorded the Coalition primary vote at 32%, its worst in ACNielsen polls since 1972. This was the first national poll taken since the government responded to public anger with the business activity statements and petrol excise, and since the announcement of the first home-buyers' grant. The poll also found that 51% of people opposed the GST while 44% supported it.
Just prior to the government's announcements of changes to petrol excise and BAS, the Bulletin-Morgan Poll found that federal Coalition support is at its lowest, at 30%, since the Liberal Party was formed in 1944. By contrast the ALP's support had increased to 48.5%. This poll was conducted on February 17-18 and 24-25.
Voter revolt
What's more, the voter revolt against the Coalition has not been quarantined to rural and regional areas. Even true-blue Liberal seats are reflecting a big swing to Labor. The Sun-Herald Taverner poll conducted on February 23-24 found the Liberal and Labor parties level at 36% support each in John Howard's own seat of Bennelong. And then, there is the Queensland blue-ribbon seat of Ryan. [[NB proofers: Add in one sentence on result]]
With these opinion poll results on top of the electoral slaughter in Queensland and WA, it's no wonder the federal government is in crisis mode, trying to placate voters with a flood of election bribes.
Will these bribes enable the Coalition to win back enough of its support base to be re-elected? It is too early to say but it looks unlikely.
While the continuing decline in support for the Coalition in rural and regional areas has been apparent for several years now, the new problem for the Coalition is that it also appears to have alienated its key support base in the cities — small-business owners and self-funded retirees.
In the March 15 Australian, business analyst Robert Gottliebsen said the impact of the work involved in implementing the GST on the Coalition's "small enterprise heartland was the equivalent of the Labor Party declaring unions illegal and sending the office bearers to trial". While Gottliebsen overstates the case, there is an element of truth in what he says.
Worried that this core constituency will vote against the government in the by-election for the federal seat of Ryan, Howard has appealed to these voters to stick with the Coalition on the basis of its anti-union policies as well as its recent election bribes. On ABC Radio's AM program on March 13, Howard threatened that if Liberal voters in Ryan gave their vote to the Labor Party, this would be interpreted as support for compulsory unionism and opposition to the work-for-the-dole scheme.
In winning back these voters, however, the Howard government faces a number of problems, the main ones being the untrustworthiness and the heartlessness of the government which feeds into the general mood of cynicism with all politicians.
GST
The implementation of the goods and services tax (GST) is a case in point. Despite the government's and media owners' attempts to mollify public discontent with the GST by not publishing data revealing its negative impact on most people's living standards, opposition to the tax is growing.
On the basis that the government's argument that the GST was "necessary" for the economy and that the introduction of the GST would simplify the tax system and cut tax red tape for small-business owners, most small-business owners supported the GST in 1998. Since the GST's introduction last July, they have experienced the onerous task of completing quarterly business activity statements, and are complaining that the quarterly GST payments to the tax office are causing cash flow problems for their businesses.
The government promised that the GST would not result in an increase in the price of petrol. But then the government failed to discount fuel excise to account for the full impact of the GST, resulting in a GST-caused petrol price increase.
The government repeatedly claimed that pensioners, self-funded retirees and others on welfare would be fully compensated for the effects of the GST. In 1998 and 1999 the government told people on pensions and benefits that they would get a 4% increase in their payments to compensate them for the GST. However, pensioners and the unemployed have now been told they actually received a "loan" instead of compensation.
The government increased welfare payments in July 1999 by 4% when inflation was 2%. In March this year, when welfare payments are meant to be increased by 4% to compensate for price increases in the six months to December, the government will halve the increase in order to retrieve the "loan" from the previous July.
In addition, from March 20, the government is changing the method of calculating rent assistance in order to cut rent assistance which most pensioners and unemployed people are eligible for.
Self-funded retirees and part-pensioners also believed the government's promise that everyone over the age of 60 would get a savings bonus of $1000-2000 to compensate them for the GST. Very few actually did. Some received as little as $40. The government had "forgotten" to warn them that the GST "compensation" would be means tested.
The March 11 Sun-Herald quoted case studies which indicate that pensioners and self-funded retirees are spending more than $35 a fortnight on the GST, nearly all of it on essential items which were previously untaxed.
Disquiet with the government's blatant dishonesty in failing to fulfil its GST promises was exacerbated by the revelation on the eve of the WA election that $2.9 billion in fuel excise revenue which was earmarked for road funding had not been spent on road funding, but absorbed into general revenue.
The government's betrayal of its GST promises means that its election bribes are likely to be viewed with suspicion by voters, including by its core constituency.
The government's callousness was also on display during the public debate over cutting fuel excise tax. People resent being characterised as wingers for complaining about the high cost of fuel.
More than one issue
Another problem for the Coalition is that public disenchantment with the government is a result of an accumulation of issues, making it almost impossible for election bribes to be targeted to resolve particular concerns.
Disenchantment has been particularly fuelled by revelations of politicians' rorts, notably the travel rorts and Peter Reith's telecard affair. All the major parties have been implemented in these rorts but not one parliamentarian has faced a jail sentence for defrauding "the taxpayer".
There are also limits to the election bribes which have been announced so far. For instance, accountancy firms are recommending that small-business clients would be mad to file their BAS forms annually. They point out that businesses will end up paying more tax than if they filed their forms quarterly. This is because businesses will still have to pay quarterly GST to the tax department, but the payments will be based on figures from the December quarter which is the busiest time of the year for many businesses. The tax can't be claimed back until next July.
As Howard positions the government for the federal election, it is likely that he will have to contend with the impact of a recession. Despite claims by Howard and treasurer Peter Costello that the Australian economy is in good shape, economic data already reveals a build-up of unsold stock, a decrease in consumer spending and business investment, contracting output and rising unemployment.
The refusal of the labour movement to organise any expression of mass protest against the government over economic issues such as the GST and fuel prices misled journalists and politicians into thinking that voters would cop the GST and high fuel prices, even if grudgingly. More importantly though, it has enabled One Nation to present itself as the voice of anti-Coalition protest by default.
Australia's corporate ruling elite — whose interests are served by both the Coalition and the ALP — are worried about the possibility of One Nation and/or the Greens having the balance of power in the Senate after the federal election.
The big-business barons would rather have a Labor government implementing the process of economic deregulation at a more measured pace than risk having a Coalition government dependent on the votes of One Nation senators. This is why the establishment media has been given a green light to highlight the ineptitude and callousness of the Howard government.
With the bosses' media now talking the Howard government down and the economy rapidly sliding into recession, no amount of petty election bribes will save Howard and his ministers from their richly deserved defeat come election day.