Turnbull and Morrison: the Coalition’s new power pact
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When cabinet’s number-crunching committee with responsibility for finalising the budget convened in recent weeks for its first few meetings, it was Malcolm Turnbull rather than treasurer Scott Morrison who chaired the sessions.
As part of his pitch for the leadership, Turnbull made it clear that he felt Tony Abbott and Joe Hockey had failed to sell an economic message and that he was best qualified to rectify this.
So it is that Turnbull has thus far taken the lead in the expenditure review committee, as his government prepares for its first significant economic statement in December and begins to plot a budget strategy and wide-ranging tax package.
The prime minister is always nominally the chair of the ERC, but it usually falls to the treasurer to run it. In due course, Morrison is expected to take the reins as the committee gets down to detail.
Still, Turnbull’s role is significant and an early marker of how his relationship with Morrison may unfold. As Turnbull says he’s leaving it to his ministers to run their portfolios, it is clear he sees drafting and selling the government’s economic message as part of his own job.
Even if Morrison is only in sixth spot in the formal cabinet rankings – behind Turnbull, Warren Truss, Julie Bishop, George Brandis and Barnaby Joyce – his relationship with the prime minister is perhaps the most important for the government’s fortunes.
And the relationship goes back a long way. Just over a decade ago, Turnbull and Morrison faced a make-or-break test that could have ended each of their political careers before they had begun.
Turnbull, the investment banker and the Liberal Party’s federal treasurer, was impatient for a spot in parliament and had resolved to challenge first-term Liberal MP Peter King for the prized seat of Wentworth.
Morrison, as state director of the Liberal Party in New South Wales, oversaw what came to be known as the Great Wentworth Stack, as King and Turnbull competed in late 2003 to sign up new members to support them in the preselection battle the following March.
“[Morrison] ran a very orderly ship as state director,” recalls Liberal senator for NSW Bill Heffernan.
“It was a big test of the state director to have a sitting member in a prominent seat being challenged and to have all that happening without the bottom falling out of the ship.”
When Morrison spoke publicly about the preselection stoush, he focused on the rigorous vetting of membership applications, amid allegations of skulduggery from either side.
“Compliance has been very high,” Morrison was quoted as saying as some 3300 new members were rapidly signed up in the affluent seat in Sydney’s eastern suburbs. “Both camps have been making sure things are according to Hoyle before submitting applications.”
As for the candidates, both were, he said, “outstanding”. No favouritism there. It was an approach that was deemed by Heffernan and others to be entirely appropriate for a party official.
It would, says another party insider, have been outrageous had Morrison in any way actively supported Turnbull’s effort to dislodge a sitting MP. Yet it is also true that Morrison did not intervene to protect that MP against challenge. “He was supportive of Malcolm having a go,” says another senior Liberal. “He didn’t bend the rules to support Malcolm as opposed to Peter, but a state director working against a new candidate can be a problem and it wasn’t a problem in this context.” Indeed, some of King’s supporters remain bitter about how the preselection was run. Publicly at least, Morrison took a hands-off approach, allowing events to unfold.
Now in the role many assumed was his goal from the start, Turnbull has given Morrison the crucial treasury portfolio. However, it seems unlikely Turnbull’s approach will be hands-off.
Turnbull and Morrison talk every morning, to co-ordinate messages and ensure they don’t contradict each other. Abbott and Hockey were often at odds in public comments. Traditionally, the treasurer’s role is to be the government’s economic hardhead while the prime minister focuses more on politics. Abbott on several occasions overruled Hockey for political reasons, for instance on changes to superannuation tax concessions, the GST and negative gearing.
This partnership is different.
With his business background, Turnbull is confident in his grasp of economics. Morrison, for his part, has considerable political experience. “This sets up an interesting dynamic between the two of them,” says a senior government source. “They’re both focused as a result on the mix of politics and the policy. You don’t want a situation where your two senior people are pulling in opposite directions. There’s also a big focus on what is actually implementable. It’s a very pragmatic approach.”
The way this senior government source portrays it, it seems close to what shadow treasurer Chris Bowen sketches in his recent book, The Money Men: Australia’s Twelve Most Notable Treasurers, as the desirable dynamic between a prime minister and treasurer, though Bowen may well differ on the outcomes of their deliberations.
“Successful treasurers work in partnership with a supportive prime minister,” writes Bowen. “A prime minister and treasurer do not need to be friends. They may even have once been rivals. But they must work together. A successful partnership will involve a prime minister and treasurer jointly developing and agreeing on an economic plan. A treasurer needs the support of the prime minister to implement reforms. A good treasurer pushes the envelope and argues for a robust approach to vital reforms; to be successful, they do not need to win every argument, but they do need to win most.”
Still, if Turnbull and Morrison are working in tandem now, reinforcing each other, this dynamic is certainly one to watch in the years ahead, should the partnership and government endure. For if both men are effectively trying to do the same job, then surely there could be room for rivalry.
Indeed, successful PM–treasurer relationships are rarely without friction. And that’s clear from the role models – one Labor and one Coalition – nominated by key Turnbull supporter Arthur Sinodinos. Just days after Turnbull toppled Abbott and before he revealed his cabinet, Sinodinos explained how the team of PM and treasurer must carry the government.
“I think he [Turnbull] has got a good capacity to get into the economic debate in a more thorough-going way,” Sinodinos said during a podcast interview with veteran journalist Michelle Grattan, now with The Conversation. “We need a return to the sort of style of Howard and Costello, Hawke and Keating, where both the prime minister and the treasurer were central players in the economic debate.
“When you have your two most powerful articulate spokesmen out there selling the message and engaging in a national conversation, that’s your best chance of dominating the conversation and selling the message.”
Morrison has sold a few messages in his time, with varying success. As state director of the Liberals, for instance, he was involved in crafting election messages.
Ben Franklin, who was campaign director for the Liberals’ successful 2004 campaign for the federal seat of Greenway, recalls Morrison’s acuity in discerning the mood of the electorate, which is based around Blacktown in Sydney’s west and had always been held by Labor.
“It wasn’t just that he had a real keen political sense – he was head and shoulders above everyone else in terms of instinctive understanding of the political dynamic – but it was also that he had a deep understanding of what people cared about,” says Franklin, who is now a Nationals MLC in NSW.
“He understood this at a really visceral level, from the first positioning statement, to defining the message, to identifying the issues we were to run on, which were predominantly cost of living. It was before cost of living had become as significant an issue as it is now. It was before ‘working families’ and Kevin Rudd.”
The next message he sold proved more controversial. After the 2004 federal election, Morrison was appointed by Hockey, who was then tourism minister, to a lucrative job heading up the government’s new Tourism Australia body, responsible for attracting international visitors. There was a whiff of cronyism, though Morrison did have experience in the industry, having worked in the 1990s for lobby group the Tourism Task Force and as director of the New Zealand Office of Tourism and Sport.
Years later, Morrison is still defensive about his role in approving the “Where the bloody hell are you?” advertising campaign, which fell foul of regulatory regimes in some key target markets. “It was a campaign designed, you know, to get attention, get recognition, and to cut through, which it certainly did,” he said recently, insisting the backlash was anticipated and the campaign stimulated tourism spending. But there were tensions with the board and he clashed with Hockey’s successor, Fran Bailey, who had him removed from the role.
Morrison entered federal parliament in 2007 after his own complicated preselection in the Cronulla-based seat of Cook, which lacked the high-society buzz of the Wentworth contest but had almost as much intrigue – too much to go into here. It was Turnbull, as opposition leader in 2008, who gave Morrison his first frontbench role as spokesman for housing and local government. But it was under Abbott’s leadership, from late 2009, that he was given the role that would raise his public profile and define him as someone who could be tough to the point of ruthlessness.
If Morrison seemed a heartless bastard as immigration minister, he now implies that was his strategy. He had gone out of his way to seem tough and unwelcoming, he told journalist Annabel Crabb recently as they chatted on the deck of a rented holiday house on the south coast of NSW for the ABC’s Kitchen Cabinet series.
“It was deliberate,” Morrison said. “It started well before the election, before we came to government, because those who were thinking of making the voyage and, more importantly, those who were thinking of running the smuggling, needed to understand that if we were elected, their worst nightmare had arrived.”
The show, broadcast this week, was filmed before the leadership change, while Abbott was still prime minister and Morrison was still in the social services portfolio. Indeed, Morrison rejected the suggestion he had any designs on what was then Joe Hockey’s job. “They’re wrong!” he declared of those peddling such rumours. “They’re just wrong!”
But his comments on the image he cultivated and the message he promulgated in the immigration portfolio gives an insight into how he is tackling his new role as treasurer. Then he was tough on asylum seekers who arrived by boat, showing no compassion to the point of even complaining in opposition about the relatives of some who had drowned being flown to family funerals. Now, from his very first comments as treasurer, he is positioning as tough on government spending.
Morrison’s early insistence that the government has a “spending problem, not a revenue problem” seemed at odds with Turnbull’s rhetoric that everything was on the table. In all likelihood, it reflected his briefing from treasury officials that he must not send a signal to his own ministerial colleagues of any relaxation in spending constraint.
Journalist Kerry O’Brien’s new book, Keating, based on his extensive interviews with the former Labor treasurer and prime minister, provides interesting insights into how the relationship between Paul Keating and Bob Hawke developed and then deteriorated.
As of mid-1984, just over a year into the Hawke government, Keating says his relationship with the then PM was “absolutely tiptop”.
“Bob and I were hardly out of each other’s company, in the business of government or socially,” he says. “We were kind of a tag team. By the end of 1985, the Tax Summit year, Bob and I were joint managing directors, but through the first term, Bob was chairman and managing director and I was chief financial officer.”
It seems the Turnbull–Morrison relationship may still be in that early “absolutely tiptop” stage, with the PM as chairman and the treasurer as CFO.
During the Wentworth preselection contest, Turnbull was marshalling his numbers and Morrison was responsible for vetting them. Now they’re crunching the numbers together, but Turnbull is firmly in the chair.
This article was first published in the print edition of The Saturday Paper on Oct 31, 2015 as "The Coalition’s new power pact". Subscribe here.