Rebooting the budget debate by engaging in detailed analysis might be best way to deal with the Palmer problem

Having “axed the tax” you would think the Coalition would be heading into the parliamentary winter recess feeling chipper.

Instead, many MPs are bewildered at how poorly the government is faring. They cannot see how the current Senate can be persuaded to pass the budget, nor how the government can simply acquiesce if the Senate guts it, nor how – on its current position in the polls – the government could possibly call the double dissolution election that would remain the only other option.

Voters have decided the budget is unfair, and the more this is reflected in the opinion polls, the more resolute the opposition parties in the Senate become in their determination not to pass most of the spending cuts.

After just two weeks, and despite suffering heavy damage to his own credibility, Clive Palmer appears to have manoeuvred the Coalition into a lose/lose situation.

On Friday, the government tried to call his senators’ bluff and failed – the three senators representing a party run by a mining magnate were prepared to leave the mining tax in place rather than allow the government to make associated spending cuts that would hit low income earners. (They had, of course, already voted to repeal the carbon tax, which is the tax Clive Palmer’s wholly-owned nickel refinery actually pays.)

Rubbing in the government’s discomfort, Palmer told the Australian Financial Review on Friday the government had "little choice but to have a mini-budget or go back to the polls because the bulk of its budget measures will never pass the Senate".

Treasurer Joe Hockey’s attempt to reboot the budget debate on Wednesday did not work.

In an interview on the ABC he said: “If the Senate chooses to block savings initiatives, then we need to look at other savings initiatives that may not require legislation and I would ask the Greens and the Labor party – who between them hold 35 votes on the floor of the Senate – to understand that there are alternatives for a government.

“We are going to fix the budget. That's what we promised the Australian people because we want to create greater prosperity and more jobs in the Australian economy.”

He was obviously trying to force Labor and the Greens to nominate the savings they would make to bring the budget back to surplus over time – not an unreasonable aspiration – and also a way to bring the debate back to the real opposition rather than the PUPs.

But it also meant he faced questions about what other savings he had in mind. He didn’t nominate any – and it’s hard to think how the government could cut tens of billions of dollars without legislation and without the decisions being subject to parliamentary disallowance.

The opposition parties – predictably – did nominate alternatives, Labor suggesting the government ditch its generous paid parental leave scheme and the Greens saying they’d be happy to help the government raise more revenue from the big miners.

In other words, Hockey didn’t reboot the debate into a sensible discussion of the choices the government made in the budget and the alternatives that might be available, he just prompted a repeat regurgitation of the “it’s a debt and deficit disaster” versus “it’s a rotten, unfair budget” refrains. That’s the discussion the government was already losing.

And the government lost a lot of other things during this chaotic sitting fortnight. Its “asset recycling fund” was gutted by Labor/Green amendments, the mining tax was not repealed, the Clean Energy Finance Corporation and the Climate Change Authority lived to fight another day despite the government’s plans to axe them, the fuel excise indexation bills were quietly shelved for now and plans to cut $435mn from higher education were disallowed.

In the process the parliament appeared chaotic, which may have been in part the fault of last minute, ill-conceived PUP amendments, but in the end means the government risks losing the most important things of all – credibility and authority.

Even the carbon tax repeal, a political victory for Tony Abbott and the Coalition, was not a clean win, achieved after Senate chaos and confusing PUP changes. And it brings new potential dangers if the benefits are not immediately apparent to voters, and when the Coalition’s alternative climate change policy is proven to be wanting.

Palmer isn’t always perfect in the execution of his populist, anti-politician Tea party-style tactics – his ego and eccentricities get in the way. But so far he has outmanoeuvred the Coalition, in part because it is used to winning arguments through slogans and broad-brushed arguments, while Palmer’s real weaknesses surface when arguments get down into the detail.

He looked bad this week when his amendments to the financial reform changes, and to the carbon tax repeal, were revealed to have achieved very little. He bristles, or storms out, when facing detailed questions in interviews. He might appeal to the disaffected voter when he’s the outsider standing up for the little guy but not if his “achievements” turn out to be illusory.

But the government has shied away from conducting the budget debate in a detailed, forensic way, and from explaining why it has made precisely these choices, and not others.

It has never really explained why third parties, such as state premiers, doctors, community and welfare groups, vice-chancellors, students, pensioners, scientists, researchers, Indigenous groups and even government backbenchers all say parts of the budget are ill-thought through or unfair.

It’s taken issue with some assumptions, but has never really contested the conclusions of economic modelling by the National Centre for Social and Economic Modelling (Natsem) and separate modelling by the Australian National University which showed low-income earners were hit hardest and high-income earners would feel very little pain.

Rebooting the budget debate by engaging in detailed analysis might be best way to deal with the Palmer problem. It would also force the government to engage in the discussion about its policy choices that all voters deserved in the first place.