The cut-through message of the pre-budget conversation is that there is a looming threat to the Australian social contract

Making the case for a Medicare-co-payment, Tony Shepherd, the head of the Commission of Audit, said people don’t always value things they don’t pay for.

But many things have a value so huge it means people will pay whatever they have to protect them – things like good health; an education that ensures a happy, productive life for their children; the care of their disabled child once they are gone; some kind of dignity in old age.



And other things people value most don’t have a monetary value at all, like love or friendship or trust – although a lack of trust in a government does appear very easy to measure, not in dollars, but in an instant kick up the bum in the national political opinion polls.



It’s a fear that this government doesn’t understand the non-monetary, intrinsic value of things that – in the words of say-it-like-it-is Queensland MP Warren Entsch – is “scaring the bejeezus” out of people.



Of course, budgets are about money and governments have to make what they like to call “tough choices”. The current budgetary situation does require reduced spending or increased taxation over time.



But as the pre-budget conversation runs so out of control that it has become less like the usual series of trial balloons and more like a fiery Zeppelin crash, the cut-through message is that there is a looming threat to the basic Australian social contract: that everyone deserves a good education, healthcare and an old age pension they can survive on – no matter how much they can afford to pay for it; that those things we value the most are available to all, and not just the rich.



Shepherd talks about the “deeply disadvantaged” being protected and Tony Abbott and his ministers insist they will always help people who can’t help themselves. Until we see the budget we can’t really assess those claims.



But with proposals to charge Medicare co-payments even for the poor, to reduce the value of the pension over time and to shelve the increases in education funding that a two-year expert review found were essential to maintain standards at the most disadvantaged schools, it’s understandable voters are getting uneasy.



And then there’s the broken promise – the deficit levy plan – which is supposed to force the wealthy to “share the pain”.

“Sharing the pain” is of course a good idea, but the levy – if it indeed goes ahead – would be an obvious breach of faith and raise only a tiny amount compared with the changes hitting lower income earners. While their impact grows over time, the deficit levy is supposed to be temporary. That’s not most people’s definition of sharing. Especially if it provides cover for not considering the long term policy options that would really “share the pain” with the wealthy.

And what kind of message would ordinary folk get if the two measures floated and then dropped were cuts to the diesel fuel rebate, which would have hit big agricultural businesses and the mining industry, and a temporary tax on the rich?



And so, as always happens when government’s shake voters' trust, the government is falling in the polls. Three in recent days have the Coalition’s primary vote around 38% or 39%, and the two party preferred vote on an election-losing 46% or 47%.



The five percentage point fall in the primary vote shown in Newspoll compares with an eight percentage point fall when Kevin Rudd decided to defer indefinitely his emissions trading scheme and a six percentage point fall when Julia Gillard announced she would introduced a three year fixed carbon price – effectively a tax.



And in any event, it turns out Shepherd’s evidence for people carelessly over-using things they don’t pay for is wrong.



“All Australians, on average, go to the doctor now 11 times per year. I just don't think we're that crook,” he said. But according to Jenna Price’s analysis today, we don’t go to the doctor 11 times a year. We go five or six times. Probably because we’re sick.



The government might be able to manage the politics of a co-payment for higher earners, but for the poor even a small financial slug could mean they defer or don’t seek necessary health care because they can’t pay. It might be able to manage the politics of some structural savings measures – restricting family benefits to lower income households for example, although explaining the cut to household incomes after all that hyperventilating about the “unimaginable” cost of the carbon tax could prove tricky.



But having paraded for years as the champions of the everyman, the party in touch with the voters, if the government now fails to understand the things Australians value more than money, if it doesn’t make “tough choices” to protect those things, it will be the biggest breach of trust of them all.

