Premier’s 2016 Lodge dinner remark to Turnbull highlighted Vertical Fiscal Imbalance problem

I started reading Malcolm Turnbull’s autobiography A Bigger Picture on the weekend, and it’s much better than I expected, with lots of interesting revelations and insights into the last couple of decades of Australian politics. One of my favourites is the revelation of a remark made by Queensland Premier Annastacia Palaszczuk to then PM Turnbull at a 2016 dinner at the Lodge regarding Turnbull’s idea to partly hand over income tax to the states. In my view, this was Turnbull’s best idea of his reign as PM, and I recall speaking in favour of it on Brisbane ABC radio at the time. It would help reduce the vertical fiscal imbalance (VFI) in our federation which encourages the blame game between levels of government, as I discussed in my 2018 book Beautiful One Day, Broke the Next.

Here is former PM Turnbull describing the Queensland Premier’s reaction to the proposal on p. 324 of the book:

When I pursued the proposal with the premiers directly and collectively at a dinner at The Lodge on 31 March, the Labor premiers were all outright opposed. Annastacia Palaszczuk said that coming to Canberra for money was too good to pass up. ‘It suits us perfectly. We get all the credit for spending the money, and you get all the blame for raising it. And when we can’t spend enough, we blame you!’

Well said, Premier. Palaszczuk perfectly described the problem of VFI and displayed her political deftness. It’s the type of thing Sir Joh would have said, and probably did say at one time. Regrettably, the political interests of state governments result in a poor outcome for the federation, as VFI encourages politicians to dodge accountability and play the blame game. You can read more about VFI and Turnbull’s part-solution in Chapter 28, “Tax reform and other indiscretions”, of his autobiography.

MT

Overall, A Bigger Picture is much better than you’d expect based on all the negative media coverage it has received. Sure, Turnbull tells tales out of school, but they make for very interesting reading.

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2 Responses to Premier’s 2016 Lodge dinner remark to Turnbull highlighted Vertical Fiscal Imbalance problem

  1. Russell says:

    Gene, good story about Anastasia. She has amazed me in still being in the top job. When she was elected after being leader of the smallest opposition ever I made a bet with a friend that she would be out in 3 months as Jackie Trad or Cameron Dick took what they would see as their rightful place over a real novice. Well, Trad has fallen on her sword after showing herself to be a real liability to the Labor Government and Dick is still biding his time but understands the politics of his situation…don’t rock the boat. Apart from fiscal hopelessness currently endemic in her party I think she has played the game very well. Turnbull on the other hand I think had understood popular politics and had the potential of being a very good PM but did not get party politics right. Like Rudd he did not get his team on board and had no party backing. So, in reality he was not a very astute politician and too much of a legend in his own lunchtime.

  2. Gene Tunny says:

    Thanks Russell. I largely agree.

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