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Inside the Malcolm Turnbull-Scott Morrison divide
In this story
As the premiers and chief ministers sat down to fish and steak at The Lodge last week, their treasurers were enjoying a Turkish banquet at one of Canberra’s nicer restaurants, Ottoman Cuisine.
Until that morning, some treasurers had been expecting to join the first ministers around the big table at the prime minister’s residence. Federal officials had indicated they would also be invited to the traditional dinner on the eve of the regular Council of Australian Governments (COAG) meeting.
Then just before they headed to Canberra, written invitations arrived – but not for The Lodge.
Senior federal sources insist there was nothing nefarious in that – Treasurer Scott Morrison just figured that if his counterparts were dining with their leaders, they would clam up. He wanted them to talk.
But the last-minute switch in arrangements raised a few eyebrows and created mild confusion. And to some in the states, it seemed to say everything about the relationship between the offices of Morrison and his prime minister, Malcolm Turnbull.
Seven months since the leadership change, the record of Turnbull and Morrison as an economic team is mixed at best.
In the final run to their first budget – which will help determine the government’s electoral fate – it continues to cause anxiety in the ranks.
They have told others that a couple of examples of miscommunication on tax policy proposals created some “superficial impressions” but that there is neither a clash of personalities nor a lack of relationship.
They talk frequently – daily is how they have described it – and privately they are making it known they don’t believe their recent communication problems are a big deal.
But others involved in budget negotiations hold a different view.
“It is as bad as it looks and, if anything, internally it’s a little bit worse,” says one.
An attempt at demonstrating unity – inviting photographers and camera crews to wait outside parliament’s ministerial entrance after last week’s COAG meeting to catch them strolling together to a Commonwealth car and sharing a ride to the airport – ended up having the opposite effect.
Sydney Radio 2GB host Ray Hadley didn’t miss the chance to raise it with Morrison on air on Monday morning.
“If the aim was to show you were a united team, I think it looked a little forced,” Hadley observed. “And so did other people who saw the photo.”
Morrison simply responded, “Well you’re entitled to your view.” Later he insisted he and Turnbull “get on just fine”. Privately they are understood to have conceded it was awkward and a bad call that they probably wouldn’t repeat.
On both sides, there has been frustration with the other’s behaviour.
Morrison was displeased that Turnbull hadn’t told him he was about to announce he was shifting the budget date forward by a week. The treasurer was left looking silly on morning radio still naming the original date.
And although he had been involved in planning the offer to transfer taxing powers to the states, Morrison also wasn’t made aware Turnbull was about to announce it while visiting Penrith Panthers’ rugby league club in Western Sydney. The snap decision followed speculation in newspapers for which Turnbull blamed state premiers.
Before that, Turnbull was unhappy with Morrison for what has been described as his public “freelancing” on tax policy – particularly on a proposed GST rise – before the policy was settled.
In the end the policy was dropped, though The Saturday Paper has confirmed the federal government is planning a change to the way the GST is distributed, with Western Australia to be granted its longstanding wish and allocated a bigger proportion of GST revenue to help offset the mining downturn.
Turnbull’s approach to formulating policy is proving unusual.
“We need Australians to take risk,” he told Westpac’s 199th anniversary dinner on Wednesday night. “We must learn to be prepared to take risks, tolerate failure and learn from that.”
But some around him say there is a fine line between taking risks and putting out ideas that haven’t been well thought through.
And while Turnbull has criticised Morrison for too much public advocacy, others level similar criticism at the PM, querying the wisdom in advocating a major overhaul of federal–state tax ties without first securing the states’ support.
Economist and the University of Tasmania’s Saul Eslake has publicly locked horns with Turnbull over tax policy.
“Malcolm is probably sui generis,” Eslake says, reaching for the Latin phrase commonly used in law to denote uniqueness. “There aren’t many people like him.”
Indeed Morrison and Turnbull are quite different men, 14 years apart in age.
Morrison has established his ministerial credentials in two detailed and difficult policy areas – the wickedly complex immigration portfolio and then in social services, requiring tricky negotiations with the crossbench and the community sector. He has proved he can sell difficult policies. But some say he has failed to adapt his approach for the Treasury job.
But Eslake notes a historical disadvantage.
“Morrison is the first person to be treasurer who hasn’t ever been a shadow treasurer, finance minister or assistant treasurer since John Kerin,” Eslake says, referring to the economist who was briefly treasurer under Bob Hawke. “He has come into the portfolio without any familiarity that those three portfolios would bring.”
Morrison and Turnbull have different operational styles – particularly, as one colleague puts it, on “how to sell and when to sell”.
“They have had to settle on an equilibrium in the past weeks,” the colleague says. “Both have a few regrets.”
Some who work closely with Turnbull remark he can often appear to be endorsing a position when he actually hasn’t made up his mind. He likes to absorb and consider possibilities and views and set a course at the last moment.
In contrast, Morrison’s approach is more rigid: he tends to make a firm decision first, then work out a plan and set out to implement it.
But they are not unfamiliar with each other’s methods. The two men have known each other for 16 years. When Morrison took over as New South Wales state director of the Liberal Party in 2000, Turnbull was estranged from the party he had joined as a young man, having quit in the 1980s after a failed preselection bid.
After his Australian Republican Movement’s campaign for change was defeated in the 1999 referendum, Turnbull had famously described monarchist prime minister John Howard as the man who “broke this nation’s heart”.
But a year later, the party’s then 32-year-old state director took a call telling him Howard and Turnbull had reconciled. Turnbull was ready to rejoin and Morrison was instructed to take him a membership form.
As he has since recounted the story to colleagues and supporters, Morrison went to Turnbull’s office at Goldman Sachs to sign him up and the two sat and chatted. From then on, as Morrison has explained it, they always “got along”.
The friendship was interrupted by Turnbull’s demise as opposition leader. They didn’t speak for a year.
“We’ve been a part of each other’s inner circle for a long time, in our relationship, and the prime minister and I are able to talk about any number of issues,” Morrison said last week.
“We’re colleagues and he is the first among equals in our cabinet. That’s the sort of cabinet government he’s running.”
But the downturn in the opinion polls has some of their Coalition colleagues nervous and questioning the approach.
Turnbull suggested north Queensland MP Michelle Landry should “be a bit more upbeat” after she said they were being “a bit wishy-washy”.
Former Victorian Liberal premier Jeff Kennett has also weighed in, writing in the Herald Sun that Turnbull is ultimately responsible.
“He has personally humiliated the person he selected to deliver good government, his treasurer,” Kennett writes. “That is not to say you cannot have differences on policy or execution of policy or ideas. But those discussions are held one on one. Never in front of your colleagues.”
Reports of Turnbull dressing down his treasurer during a previous dinner at The Lodge apparently prompted the observation.
Sources have told The Saturday Paper that at an expenditure review committee meeting recently, when Morrison was speaking on tax policy, a difference with Turnbull prompted the prime minister to observe curtly that it would be better if they could have the conversation in private.
Another who was present disputes that and doesn’t recall any snippy exchange.
At last week’s COAG, some first ministers saw no sign of difficulty between the two and suggested they seemed “very tight”. But some were perplexed at the manner of communication with them, or what they saw as the lack of it. New South Wales Premier Mike Baird expressed frustration that he had stuck his neck out to support the proposed GST rise only to find it withdrawn and was now being asked to endorse another controversial measure with little detail.
Within the federal government, some senior figures also say the public interventions of those dubbed “Malcolm’s lieutenants”, especially Cabinet Secretary Arthur Sinodinos, add to the pressure.
Sinodinos’s portfolio cuts across the whole of government, so he has wide scope to engage on issues.
But his recent public comments on economic management, including the need for corporate tax cuts, have persuaded some colleagues he is positioning for future promotion to one of the economic portfolios. They say it’s unhelpful.
A spokesman for Sinodinos says the cabinet secretary’s role means “he is appropriately able to comment on a wide range of government policy areas, and that is what he has done”.
“The cabinet secretary’s focus is on getting the Turnbull government re-elected,” he says.
Some of the nation’s most influential radio announcers normally sympathetic to Coalition governments, 2GB’s Ray Hadley and Alan Jones, are openly criticising senior government ministers.
While Morrison has a weekly appointment with Hadley, Turnbull refuses to appear on 2GB.
This week on Sky News, Alan Jones let fly at Turnbull, Morrison and Sinodinos, declaring that in the past week “no one’s laid a glove on the Labor Party”.
For Jones, the issue was the party’s decision to elect Turnbull leader. “A man with naked ambition went after something because he thought he could get it and the bedwetters have backed him,” he said. “And now the chickens are coming home to roost.”
He revisited the issue of developer donations to the NSW Liberal Party when Sinodinos was party treasurer and challenged his denials of knowledge. “He’s got to go,” Jones said.
He took a swipe at Morrison for his decision to vote for Turnbull as leader over Tony Abbott and another at the treasurer–prime minister relationship.
“Who will listen to Scott Morrison?” Jones asked. “…He decided to shift his gear into another camp and now he speaks and people say, ‘I can’t take him seriously because the prime minister’s likely to overrule him.’ ”
Jones’s co-host Graham Richardson, still a Labor player and previously a cabinet minister in the Hawke and Keating governments, proffered a historical perspective on Labor and Coalition treasurers past.
“Keating and Costello had great courage and they had the backing of their prime ministers. They didn’t get on with their prime ministers but they had their backing. And so they knew they could get up and they wouldn’t be countermanded, they wouldn’t be cast aside. They knew they could get up with confidence. How does Morrison get up with confidence?”
Saul Eslake says something similar: “Every successful treasurer has had, behind him, a prime minister who can also sell an economic message. It was true for Paul Keating, it was true for Peter Costello.”
In contrast, he says, Labor treasurer Wayne Swan lacked that in both Kevin Rudd and Julia Gillard and John Howard as treasurer lacked it in his prime minister, Malcolm Fraser.
Eslake suggests Morrison is experiencing the same. “Turnbull and Morrison, although I don’t think they hate each other, have had trouble singing from the same song sheet.”
The downturn in the opinion polls adds to the pressure on the government.
Turnbull’s personal approval rating has him well ahead of opposition leader Bill Shorten but Labor’s party vote is creeping up. This week’s Newspoll had Labor ahead, after preferences, for the first time since Turnbull took over.
Ministers are openly being questioned about Turnbull’s leadership.
“We’re all very much supportive of the prime minister,” Justice Minister Michael Keenan said this week, trying to talk about child exploitation.
Speaking on ABC Radio in Adelaide, Industry Minister Christopher Pyne dismissed talk of miscommunication. “I think the problem is the commentators are just desperate to talk relentlessly about the cycle of politics and who’s got the ball and who’s kicking it to whom, rather than the substance of policy.”
But even conservative commentators are suggesting Turnbull and Morrison should sort themselves out.
The Australian’s Greg Sheridan summed up their views on the ABC’s Q&A program: “They’re paid to get on.”
This article was first published in the print edition of The Saturday Paper on Apr 9, 2016 as "Inside the PM-treasurer divide".
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