Ethics and Tony Abbott's Medicare safety net promise

You have to feel for us academic analysts of government. There we are out of sight on the frontiers of research, examining the last remains of integrity in government, publishing for fear of perishing, when yet again we get overtaken by events.

My latest book, Terms of Trust, is just out, but it was completed before the latest Tony Abbott saga: the backflip over the promised Medicare safety-net levels. It contains many examples showing why so many people have good reasons to distrust government. If only I had been able to include the latest Abbott case study.

Terms of Trust argues that governments craft their own terms of trust around ethical practices that suit government, not the governed. This has always been the case, but over recent decades governments have turned the heat up, saying too much public inquiry and accountability will crush the sense of individual ethical responsibility required of government leaders.

I support this view. Decent government is powered by the sense of initiative that personal ethical responsibility can bring to public affairs. As I argue in the book, accountability works best when it reinforces collective and personal responsibility.

But governments can let us down by misusing the responsibilities of government. Worse, I argue that governments can let themselves down by saying they need to be given more room to exercise the burdens of responsibility. Australian governments share a tendency with many Western governments to complain about "accountability overreach". But then they make things so much worse by engaging in "responsibility overreach".

Terms of Trust has lots of examples, all variations on the theme that the governed should take on trust the ethical responsibilities of those in government. My main argument is that by talking up their new commitment to trustworthiness, governments are making the business of government harder. People see many gaps between claims and realities of the new responsibility - and cynicism eats away at what's left of public trust.

Take the Tony Abbott example. In a pre-Budget meeting last month, Cabinet agreed to increase the thresholds at which the Medicare safety net applied: up from $300 to $500 for those with concessions and up from $700 to $1,000 for the rest. The lower levels were part of the deal cut by Abbott with Senate Independents when negotiating the 2004 passage of the Medicare package.

During the 2004 election, Abbott was firm that if re-elected, the Government would not lift the entitlement levels. But in the lead-up to this month's Budget, Abbott has had a rough time explaining how this package will be amended when the Government can get the new Senate to agree. You have to feel for Abbott, who has had his share of disappointments this year.

Like many other political observers, I watched eagerly in 2004 when he replaced Senator Kay Patterson as Health Minister, after the Prime Minister's mandate to cut a deal with the Independents in the Senate to pass the safety-net legislation before the election. Prime Minister Howard seemed pleased that Abbott cut the right deal at the right time.

Both Abbott and Howard trumpeted the merits of the safety net during the 2004 election campaign, contrasting it to great effect with Labor's controversial "Medicare Gold" policy.

I remember my own first doubts when they emerged soon after the election. News of the Government's majority in the Senate took most observers by surprise, although I do remember Malcolm Mackerras, for one, predicting it. As that surprising news began to sink in, a number of ministers began to predict what changes this win might have on government practice. In Terms of Trust, I record how Deputy Prime Minister John Anderson revealed that the era of "endless witch-hunting committees" had ended, referring in particular to the Senate committee inquiry into the evidence by Mike Scrafton contesting the Howard's knowledge of Defence advice about "children overboard".

But at the time I did not quite appreciate the significance of warnings by the Treasurer, Peter Costello, that the Budget surplus was not as sustainable as many had presumed during the election. In my book, I simply note that Costello distanced himself from public-service estimates of growing government revenue produced under the Charter of Budget Honesty before the election.

Little did I appreciate at the time that this was the beginning of the end of the Medicare deal, and possibly a number of other policy commitments. During the 2004 election, Tony Abbott used a Four Corners interview to give his "absolutely rock-solid, ironclad commitment" that the Government would not, after the election, lift the thresholds for the Medicare rebates.

One reason would have been that Abbott knew, before the election and so before any knowledge of a likely government majority in the Senate, that he could not go back to the Senate Independents and get them to change their views. But another would seem to be that Abbott himself believed in the sustainability of the Medicare thresholds.

We now know that the Expenditure Review Committee of Cabinet came to another view of the matter of sustainability. In his famous AM interview of April 15, Howard justified the policy change as a reversion to the Government's original threshold levels: the ones originally preferred before succumbing to the threats of the Senate Independents not to pass the package until the thresholds were lowered. This was one of those unpopular but hard decisions that responsible governments have to make. Further, he pointedly refused to "to give an ironclad guarantee" that the limits would not be again raised later, ironically teaching a lesson to other ministers on the merits of explicitly avoiding the agony of ironcladding.

All this emerged while Tony Abbott was on leave with his family. On his return, Abbott faced the media head-on, claiming that when he gave his original election commitments he had "not the slightest inkling that the Government would want to change it". That is, Abbott's election commitment was "my absolute belief", shared with other ministers (like Costello) about "what we honestly believed to be the position".

So what had changed? One view within Government is that Cabinet had rediscovered the need to make unpopular decisions, especially at the first Budget after an election. This is the view promoted by Howard on his way to the airport before departing for China.

Another view is that the Government discovered that it no longer needed the Senate Independents and that it could return to its original position before Abbott cut the deal with them. This is the view of Senators Brian Harradine and Meg Lees, two of the four who cut the deal with Abbott. Lees says the Government's action "gives politics an appalling name", which might be a backhanded way of praising Abbott for not being party to the reversal of election commitments.

But her view was polite chatter compared with that of Harradine, the father of the Senate, who is about to retire to make way for the new Howard majority. Writing in The Canberra Times on April 20, Harradine argued that the real policy problem was that the Government, including Abbott, lacked any commitment to adequate funding of Medicare's bulk-billing system. Only against this background, he argued, could voters appreciate the merits of the 2004 deal to make the legislated safety net lower than the Government's preferred original offer, to which the Government has now reverted. Real policy responsibility, he argued, meant making Medicare sustainable.

Then there is the Abbott view, caught somehow in between these two. When speaking to Laurie Oakes, Abbott said the Government was being responsible because it was changing opinions when circumstances changed. Taking an unacknowledged swipe at the "mendacity" mantra of Raymond Gaita's recent “Breach of Trust” (Quarterly Essay No 16), Abbott said "that's not mendacity. That's responsibility." The underlying change in "circumstance" was the unpredictably high take-up rate of the Medicare rebate. Abbott tried to convince Oakes that governments have to balance a set of three competing values.

The first value is "keeping commitments". Honourable as this commitment is, it has to be weighed in the balance against the others. Promises can be broken when they rub up against the second value of "economic responsibility". In shorthand, this value means a balanced Budget, for governments if not for the governed, in need of health care. And the third in this set of core values? Abbott chanced his luck with this value of "solidarity with the team", which could cut either way, to force Abbott back into the tent or to kick some of the other ministers out of it.

Nothing in Terms of Trust quite captures this sense of ethics as a team sport. Abbott is an interesting individual because he is one who can say "sorry" when required. In this case, he states, "I made a categoric statement that turned out not to be true". But sorry for whom? The political team he plays for or the ordinary followers who support the team and performances he has led them to expect?

Speaking to The Weekend Australian in mid- April, Abbott confessed, "Obviously I have a moral obligation to do what I sincerely think best." The Independent Senators thought that was what they were getting in the 2004 Medicare deal. But Abbott now says, "Plainly it's good to honour the last syllable of the last pledge but it's also good to honour the team. So I'll be supporting the team."

As with any form of group ethics, this sense of team play is only as good as the cause motivating the team. Voters will make up their own minds about this latest version of the terms of trust governments use to convince us of their sustainable right to the responsibilities of office.