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Watering down the super changes might buy internal peace for the Coalition, but unfreezing the doctors’ rebate would be a smarter political move.

Will the Government water down changes to super and health?

David Speers
22 July 2016

By David Speers

The government is in a much weakened position after the election, but this week showed much needed signs of strength. On superannuation and health policies, Treasurer Scott Morrison held firm. He refused to throw away budget repair to appease sectional interests, even on the government’s own backbench. It was a laudable show of fiscal responsibility. How long it lasts remains to be seen.

The Prime Minister made it clear as he unveiled his new-look Ministry on Monday that budget repair was his top priority for this term. For his part, Morrison has been pleading for the warnings from ratings agencies to be taken seriously. And yet we’ve seen this week just how tough his job will be and how little some seem to care about the mounting debt problem.

The superannuation policy was announced in the budget and taken to the election. Yet some in the Coalition are still determined to overturn it. Eric Abetz voiced his concerns in the party room meeting on Monday. Two days later, George Christensen posted his complaints on Facebook with a threat to cross the floor. Neither represent particularly high wealth regions of the country that will suffer greatly because of these super changes, but all government MPs are now emboldened with the knowledge that crossing the floor can wreak havoc. The government has the barest of majorities and needs every vote.

To his credit, Morrison is determined to stare them down. He’s challenged the critics of the super policy to come up with a better plan. If the policy is watered down, “then obviously there would need to be alternative ways of addressing any impact on the Budget position.” “When things come off the table”, he said, “other things have to go on”. Significantly, none of the conservative critics of the super policy, either publicly or privately, have come up with a better way to find roughly $6 billion in budget repair.

For all the noise around superannuation, health is the far greater challenge for the government. This undoubtedly cost the Coalition more votes at the election and Turnbull knows it. He acknowledges the government created “fertile ground” for Labor’s Mediscare attack and understands the importance of restoring trust with voters here. Yesterday, the Health Minister sat down with the AMA President, Michael Gannon, and invited the cameras in to film the two of them chatting. This is the sign of a government determined to mend fences.

Dr Gannon is quite clear about what the peak doctors’ group wants: a commitment within months to match Labor’s promise to end the freeze on the Medicare rebate for GPs from the start of next year. This would cost the budget $2.4b over four years and $12b over a decade.

It’s unlikely the government will move that far, but Morrison is keeping the door open to some sort of compromise. "Announcements on those matters will be made by the government when and if the government were going to go down that path". That’s hardly a no to the AMA. Labor will also run hard on health when parliament returns at the end of August.

The government is well aware of the political pain this issue has caused and the need to avoid another three years of it. But here too, Morrison is demanding alternate savings to offset any policy change. “There are no exceptions to those fiscal rules”, he said, emphasising the need to “stay on the trajectory of budget repair that we set out in the budget, which is supported by the ratings agencies". Of course, there’s no suggestion from the AMA as to where they think the money should come from.

If Scott Morrison could find a spare billion or two down the back of the couch it would be interesting to see where he would spend it. Watering down the superannuation changes might buy internal peace within the Coalition, but unfreezing the doctors’ rebate would be a smarter political move. It would take the heat out of Labor’s attacks and settle down the dispute with the AMA. Based on the language this week, I reckon fixing health would be a higher priority for the Treasurer than superannuation, even if that does upset his conservative colleagues.

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