Can a budget bounce save the Coalition?


In last year’s budget, while fighting for his political life, then-prime minister Malcolm Turnbull announced more than $140 billion worth of tax cuts. This did nothing to stop the continuous run of polls in Labor’s favour. The Coalition’s 2017 budget, which fully funded the National Disability Insurance Scheme through an increase to the Medicare levy, similarly failed to deliver a poll boost. In the first Newspoll after the budget was handed down, the two party-preferred vote even widened slightly from 52-48 Labor’s way to 53-47.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg began the budget sell on Wednesday, but history suggests budgets don’t tend to help at the polls.Credit:Alex Ellinghausen

Intrigued by the constant talk of a “budget bounce,” poll analyst Kevin Bonham went in search of the Yeti. In an analysis of Newspolls from 1986 to 2017, he used a rolling average of polls, correlated it with how voters rated various budgets and looked at the short and longer term pictures. His conclusion? Budgets don’t create large immediate bounces that have any “staying power”.

Bonham concedes bounces have been observed after Howard government budgets, such as 1996 and 2000. But he argues these results probably reflect “sample noise” and volatility in the polling, rather than voters’ appreciation of the budget. He similarly argues a poll boost for the Rudd government in 2009 may have had more to do with a pre-budget dip, rather than a post-budget bounce.

In the wake of the 2019 budget, Bonham says the notion it will alter the government’s fortunes should be approached “with extreme caution”.

“2017 was a big example of everyone getting revved up about the idea that there was going to be a budget bounce … and then nothing happened. Historically nothing happening is the normal result. In fact, the average result is a slight loss.”

That being said, more than 10 million taxpayers are set to receive a tantalising deposit in their bank accounts from July 1 as a result of this week’s budget. The Coalition has announced tax offsets worth up to $1080 for singles and up to $2160 for double-income families, with funds available when people do their 2018-19 tax returns. Because Labor said they would support the measure, the Australian Taxation Office can process the change before legislation is passed.

But Labor-aligned strategist Simon Banks says voters are so cynical about politicians they will only believe promises when they are delivered, even if the cheque is effectively in the post. Banks, who is managing director of lobbying firm Hawker Britton, was listening to Frydenberg on ABC radio on Wednesday morning. Journalist Sabra Lane asked the Treasurer how he thought Australians would view the promise of “lump sums of cash in their bank accounts just weeks after an election”.

As Frydenberg began to talk of how the money will “help ease the cost of living,” Banks’ immediate thought was: it won’t arrive until after polling day. “They’re too late.”

Essential Media director Peter Lewis conducts regular focus groups around the country and says voters are not necessarily easily won over with tax cuts anyway. “I think they’re cynical about cash being splashed around,” he said. A March 26 Essential Poll, based on about 1000 respondents, found just 40 per cent of those polled agreed the government should spend more money on tax cuts for individuals.

The ABC's coverage of Treasurer Josh Frydenberg's budget speech had less than half the viewers of Married At First Sight the same night. 

The ABC’s coverage of Treasurer Josh Frydenberg’s budget speech had less than half the viewers of Married At First Sight the same night. Credit:Dominic Lorrimer

Paula Matthewson is a political writer and former media adviser to John Howard. As the Coalition begins its budget sell, she notes voters may not be impressed by the budget fanfare and surplus news.

“Even if you accept the government will deliver a surplus at the end of next year, voters will say, ‘great, but I’m not going to give you bonus points for doing your job. For being competent.'”

She adds that economic management is a “double-edged sword” for the Coalition, because they are already seen as superior economic managers. “It’s not the thing that’s going to change views about the Coalition because they’re expected to be that.”

The fact that significant parts of the budget are often “dropped” to the media by the government ahead of time also serves to lessen the wow factor of the budget on the day itself. As Bonham notes, “people have a fair idea of what the budget will be for some time in advance”.

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For example, this year, key measures such as the domestic violence package, the energy supplement and climate change policy were released ahead of time. Key details about tax cuts and the infrastructure fund were also known. While the rationale for the drops is to ensure attention is given (or not given) to the huge numbers of announcements contained in the budget, it also means there is less of a surprise come actual budget day.

Lewis also questions the extent to which voters are engaged in the budget process full stop. “I reckon the only people sitting at home watching the budget are those who are being case studies for the media,” he says, half-jokingly.

Ratings figures would suggest voters were not desperate for details about the budget. This year, about 500,000 people in cities alone tuned in to watch the ABC’s coverage of the Treasurer’s speech. This is roughly the same as last year’s figure, but down from about 730,000 in 2015. The 500,000 figure also stands in stark contrast to the 1.38 million who tuned in to watch reality show Married At First Sight on Tuesday night.

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According to Banks, this level of engagement is “the new normal”. “The notion that [budget nights] are mass community events hasn’t been true for quite some time,” he says.

Banks explains the proliferation of entertainment and technology options is largely the reason for the change, rather than a gripe against politicians. Long gone are the days when there were only three or four channels and the whole family sat around the TV to watch the budget speech because there was basically nothing else on.

But it also makes the post-budget sell a more difficult one. Particularly in an electorate that is not viewing the Coalition with rose-coloured glasses to begin with. The most recent Newspoll, taken on March 10, had Labor comfortably ahead, 54 per cent to the Coalition’s 46 per cent.

Those close to the budget process insist it should not be written off as a political stunt, however. The Australian Industry Group’s head of policy, Peter Burn, notes the budget is an essential task of government: “they need to appropriate money to operate”.

Deloitte Access Economics partner Chris Richardson similarly cautions that the budget is still a highly important document. “If you’re interested in Australia’s future and its direction, then it’s the place to be,” he says.

“Are people listening? My guess is this has drifted over time. But this is a shame. This stuff is important.”

Judith Ireland is a political reporter for the Sydney Morning Herald and The Age, based at Parliament House

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