As election timing starts to drive the economic agenda, Malcolm Turnbull is considering a high-stakes double-dissolution poll. By Karen Middleton.

Inside Turnbull’s early election plan

Malcolm Turnbull in parliament this week.
Malcolm Turnbull in parliament this week.
Credit: AAP Image/Lukas Coch

On Tuesday, Nationals MP John Cobb got to his feet in the Coalition’s weekly meeting of MPs in Canberra, with a warning for Prime Minister Malcolm Turnbull from the rural heartland: don’t go to an early election.

Cobb holds one of the safest Coalition seats in the country, the federal seat of Calare in rural New South Wales. His constituents, whom he has represented for 15 years, are dyed-in-the-wool conservative voters. And they are not happy.

 “I don’t get the feeling Australia has any enthusiasm about an early election,” Cobb told The Saturday Paper after his intervention. “They just want us to get on and do what we’ve got to do … What they want us to do is get out and make some decisions. Get on with it.”

But despite his backbencher’s warning, Turnbull is contemplating a slightly early election – and a double dissolution at that.

That inclination was confirmed by his deal with the Greens this week to change the way Australians vote for the senate and make it much harder for micro-party candidates to get elected.

Like Cobb’s constituents, the government leadership also believes it needs to get on and do things before that election is held. Its biggest problem is that it is still deciding exactly what those things might be.

Turnbull and his government are planning for an economic statement before the budget falls due in May. Senior officials have told The Saturday Paper it is increasingly likely that the government will unveil a package of economic measures before the budget. Cabinet, however, is yet to settle on this.

The Coalition’s most senior strategists accept that the government has to lay out an economic plan before it goes to the polls, whether in the budget or sooner. But senior sources suggest it is now the election deadline driving the economic agenda and not the other way around.

If the government went to the polls without revealing the state of the books and explaining its plans for change, it would not only face opposition criticism, it would leave bureaucrats to tell the economic story.

The law requires the heads of the treasury and finance departments to release the Pre-election Economic and Fiscal Outlook 10 days after the writs are issued for the election campaign.

If it is released without any political context being added to the figures – some might call it spin – it’s being suggested quietly that the picture may not look so great. “That’s not going to happen,” one official told The Saturday Paper.

1 . Supply bills

Running alongside this is the issue of supply bills – the legislation that ensures a government can access money – which need to be passed with the budget.

Governments like to keep a minimum amount in the coffers as a buffer against anything unforeseen. As a general rule, that amount is five-twelfths of its yearly supply – or enough to keep things ticking over for five months in any given year.

If the government doesn’t get its annual supply bills through parliament before calling an election for July, the time frame for a double dissolution, its funds fall below that buffer and it goes dangerously close to running out of money.

Any delay in forming a new government – such as the 17-day hiatus before Julia Gillard negotiated minority power with the crossbench back in 2010 – could see that happen.

And there’s another issue that makes the budget-then-election recipe more delicate than a twice-cooked soufflé.

For the government to secure supply, parliament has to be sitting. But parliament rises on March 17 for seven weeks, before reconvening on budget day, May 10. The last day the government can legally call a double-dissolution election is May 11. The law requires at least 33 days between announcement and poll.

But if it calls a double dissolution to be held before July, the senate will be an entire year out of sync with the house of representatives and there will need to be another half-senate election within two years.

So, the prime minister faces a dilemma. If he wants a double dissolution but doesn’t produce an early economic statement in March or April, his treasurer, Scott Morrison, would have to deliver a budget on May 10, try to ram the supply bills through both houses on the morning of May 11, and then go to see the governor-general the same afternoon.

Government officials acknowledge that this isn’t feasible.

If Turnbull decides to unveil an economic package in March ahead of a double-dissolution election, he has three weeks from now to design and present it and then have his supply bills passed.

If he instead does so in April, he would have to recall a parliament in recess, with all the associated expense. And in either of those cases, unless he’s prepared to pay for that second senate election in a year or two, he needs to set a July election date – probably July 2 – and have an interminably long election campaign.

It’s all a bit of an electoral nightmare.

The Saturday Paper has been told the most likely scenario at this stage is an economic statement before parliament rises in March, detailing the most significant of the government’s planned changes to tax.

On the back of this, it would introduce some basic supply bills and hope it could get them passed. The budget would then be held on schedule in May and the prime minister might – or might not – go out to Yarralumla the next day.

And if supply bills were introduced early in this way, officials acknowledge it would be clear an election would follow soon after.

“It’s game on from whenever you show your hand,” one said.

2 . Discontent within government

In the meantime, the opposition is taunting Turnbull over his indecision, correctly detecting murmurings in the electorate that he is not living up to expectations.

Supporters on the left are complaining he is not moving on policy issues, from legalising same-sex marriage to pushing ahead on an Australian republic and overhauling climate-change policy. But conservative supporters are also expressing disappointment that little has been done on the economy.

“We were told that he would change the Liberal Party,” thundered the manager of opposition business, Tony Burke, in parliament on Tuesday. “But no, the Liberal Party has changed him from the moment he got that job.”

Opposition Leader Bill Shorten has continued the theme.

“It is fair to say, with the division and chaos that we have seen from Mr Turnbull’s government, the PM is shrinking into his job,” he said on Thursday.

Within the government, there is some simmering unhappiness, too. Treasurer Scott Morrison has made known to colleagues his extreme frustration at having gone out and defended the proposal to raise the goods and services tax to 15 per cent only to have it unceremoniously abandoned.

His department is attracting muttered criticism, too, some directed at Secretary John Fraser – an extremely experienced public and private-sector economist and past treasury official whom prime minister Tony Abbott lured back to Australia after decades overseas.

In the department, Fraser is sometimes referred to as “Mr 1983” by those who believe his ideas are not matching the political pace. In a speech to the Sydney Institute a month ago, Fraser acknowledged how much has changed since he last worked there.

“Framing budgets is difficult and has always been so,” Fraser said. “The main difference now, compared with my experience in the 1970s, 1980s and early 1990s, is that everything seems far more complex.”

He also laid out the challenge he and the government faced, reminding the audience that ahead of the 2013 election, the Pre-election Economic and Fiscal Outlook was predicting the economy would be in wafer-thin surplus by now, but instead it would be in deficit, with treasury expected to receive $39 billion less in tax this year than it did then.

He linked the problem to a difficult senate refusing to pass savings measures.

“Around $14 billion of these measures are yet to pass the senate,” Fraser said. “Further delays will have a negative impact on the fiscal outlook.”

And should Turnbull go down the double-dissolution route – which some close to him put at a 50-50 chance but others suggest is a much stronger prospect – the senate is set to become an election issue of itself.

3 . Inaction frustrating voters

Pollsters are detecting a strong sense of voter frustration at what is seen as a lack of action – exactly the kind of sentiment John Cobb described.

The managing director of Visibility Consulting, Tony Mitchelmore, formerly a Labor pollster now working for a range of clients, told The Saturday Paper there has been a palpable change in attitudes to Turnbull since the year began.

“People want something done,” Mitchelmore said. “They’re saying, ‘I thought Turnbull was going to be a change … We’re stagnating. What’s going on? Nothing seems to happen.’ They thought Turnbull was going to be  a change in a lot of ways.”

On the Coalition side, strategists detect that some voters blame government inertia on senate obstructionism. 

Veteran conservative pollster and the managing director of Crosby Textor, Mark Textor, says it isn’t the main issue but it is registering.

“The senate is a material contributor to people’s concerns about the dysfunction of the political system and its effect on Australia’s ability to transition its economy at a delicate time,” Textor told The Saturday Paper.

Mitchelmore said it’s mostly the economy. “They’re all thinking about the economy and things stagnating … At the moment, it’s definitely more a Turnbull issue than a senate perception.”

But the changes Turnbull is making to senate voting will enable the Coalition to answer allegations of inaction by blaming the senate where necessary in an election campaign, telling voters that having a senate that better reflects voters’ wishes will help get the economy moving.

The proposed changes mostly affect above-the-line voting – the way 96 per cent of voters choose to do it.

Micro-parties will no longer be able to group themselves together and do complicated preference-swapping deals so that a “1” in their box above the line can elect a candidate who only received a fraction of 1 per cent of the primary vote. Instead, voters will be able to number up to six boxes above the line, or all the boxes below the line. The number of allowable mistakes on a ballot paper will increase from three to five.

A ban on one person registering multiple parties should reduce the number of overall candidates – and with that, the size of the ballot paper – and the inclusion of party logos is designed to stop voters being confused by parties with similar names.

Although the opposition isn’t supporting the changes – something that has angered its own shadow special minister of state and former Labor national secretary, Gary Gray – they are expected to pass with the support of the Greens and independent Nick Xenophon.

This will make it harder for micro-parties to be elected. It also makes a double-dissolution election a much more attractive prospect for the government. Dissolving both houses usually boosts the small parties’ and independents’ chances of election because the percentage of the vote required to win a seat is halved. But after the changes, they will struggle to even get that much.

4 . The triggers for a double dissolution

A double dissolution is not an oft-taken course. There have only been six since Federation in 1901.

A prime minister can justify seeking to completely dissolve both houses, instead of only half the senate as usual, if the senate has twice refused to pass a piece of government legislation, with three months between attempts. Twice rejected, it becomes a potential double-dissolution “trigger”, and more than one piece of legislation can end up in this state.

At present, the government has two bills that qualify as triggers, one to abolish the Clean Energy Finance Corporation and a Fair Work bill aimed at cracking down on criminality in the union movement.

Twelve others have been rejected once and could potentially qualify if they are rejected a second time within the right time frame, including the bill to resurrect the building industry watchdog, the Australian Building and Construction Commission.

“It is open to us to go to a double dissolution – not as a tactical measure,” Turnbull told ABC TV’s Insiders earlier this month. “If we go to a double dissolution it will be in order to use the deadlock-breaking provision of the constitution, because the senate has blocked important elements of legislation.”

He named the industrial bills as two examples.

After a double-dissolution election, if a government is returned, it is entitled to convene both houses in a joint sitting and use the combined numbers to pass the blocked legislation – all of it.  

The most recent double dissolution was a July poll back in 1987.

Talk of another one comes as a sudden slide in the Coalition’s opinion poll ratings has given some of Turnbull’s MPs a scare. But their own strategists are assuring them the grassroots work many marginal seat-holders did when the figures were disastrous under Tony Abbott’s leadership is standing them in good stead under Turnbull, and that Coalition support in marginal seats is not as bad as the published polls might suggest.

Some suggest the two-party Newspoll figure putting the major parties neck and neck might be slightly understating the strength of preference flows to the Coalition under Turnbull because they are based on preference flows from the previous election, when Abbott was leader. By this theory, Turnbull is more likely to attract the second-preferences of left-wing voters than Abbott was.

But former Newspoll chief executive Martin O’Shannessy, now a partner at Omnipoll, says if the change of leader affects the calculations, it’s not by a lot.

“Those preference flows have remained remarkably resilient,” O’Shannessy said. “He might get a bonus from it but I would say not much. If I were faced with a question of doing a poll, I would still use that method.”

The Coalition’s primary vote has also fallen, indicating that despite Turnbull still strongly outpolling Shorten as preferred prime minister, he can’t afford complacency.

Tony Mitchelmore says despite the electorate’s annoyance at inaction on the economy, it still remains the Coalition’s strong suit. “There’s not a lot of trust in Labor on the economy,” he said.

Turnbull’s strategy is to unveil a comprehensive economic plan of his own soon and contrast it with what he argues are just bits and pieces from Labor, while continuing to hammer the opposition on its proposed cuts to negative gearing.

As one government official said of Labor: “They’re saying, ‘You just have to trust us.’ ”

Turnbull’s hope is that in the end voters will decide they can’t take the risk. And he will likely be asking them to make that decision sooner rather than later.

This article was first published in the print edition of The Saturday Paper on Feb 27, 2016 as "Inside Turnbull’s early election plan".

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Karen Middleton is The Saturday Paper’s chief political correspondent.

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