Bad economics and bad leadership

To keep fiscal costs down at a time when government revenue was scarce, those without family dependents would have gone without compensation.

The unions opposed the plan because it was premised on a piece of economic commonsense the unions deny - that relatively high minimum wages like ours don’t price people out of jobs. The Opposition did what oppositions do - endorsing the pleasure (the tax credits) without the pain (the minimum wage freeze).

And the Government? Back then it was shy of creating losers. And once the ALP advocated tax credits, the Government opposed any policy with the same name, however different its specifications or context.

I reckon that then - and indeed now - it was not just the right way to go economically. It was also smart politics. Remember Bob Hawke, who got through far more difficult economic times than Howard, with a similar record of electoral success?

He sold Australians wage restraint by convincing them that their sacrifice was necessary, that it was fair, and that it would help build better lives for their families and their community - which it did.

Howard could have done the same. There’ll be no shortage of losers from his IR change - particularly if the economy slows. Yet the recent revenue bonanza could have allowed Howard to fund a “no losers” wage-tax trade-off.

I reckon it would make him unassailable as PM - as Hawke was during good economic times in 1985 and Menzies was all those years ago. (Both PMs were unashamed to pinch their opponents’ best policies.)

Australians want governments that know where they’re going and steadily work towards their vision. They don’t want improvised bits of class warfare cobbled together the moment there is a Senate majority.

It’s bad economics. It’s bad leadership. And as a few worried Coalition back-benchers and Senators are realising, it’s bad politics.