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By zeroing in on the economy, Scott Morrison is attempting to re-create Keating’s unlikely victory over John Hewson. It’s a losing campaign strategy, says the former Liberal leader. By Karen Middleton.

John Hewson: Morrison isn’t Paul Keating

As the federal election looms, the Coalition is pinning its hopes on the unlikely victory of a previous treasurer turned prime minister, one who used a scare campaign to defeat an opposition that laid its policy cards on the table far in advance.

Paul Keating’s surprise 1993 defeat of John Hewson and the Liberal leader’s very detailed “Fightback!” package, centred on a goods and services tax, is forming a model of sorts for incumbent Scott Morrison’s 2019 campaign.

This week, Morrison was out of the blocks in earnest, warning in a speech in Sydney that Labor’s plans for “new and higher taxes” would weaken the economy.

As Malcolm Turnbull had planned to do, Morrison is framing his campaign around economic security, insisting the Liberal Party is a better manager than Labor and that it can generate enough wealth to squirrel away a budget surplus, too.

New figures this week revealed yearly inflation sitting at 1.8 per cent – still below the Reserve Bank’s target band and likely to see interest rates headed down again, not up. Morrison and Treasurer Josh Frydenberg made a virtue of the seemingly stagnating economy, telling voters it could be worse.

“This is all at risk with Bill Shorten and Labor,” Frydenberg told journalists on Wednesday. “They can’t manage money, so they’ll come after yours.”

John Hewson thinks Morrison’s chances of victory are slim. He believes the parallels to ’93 – insofar as the prime minister will be able to claim victory from the jaws of defeat – will likely be limited.

“Morrison’s no Keating,” Hewson says.

Now a professor of economics at the Australian National University, Hewson warns that the Coalition’s strategy in pointing to its economic record off the back of good jobs figures and low inflation may not wash with voters.

“People don’t believe it,” he tells The Saturday Paper. “Their lived experience is completely different to that. The more you say it, I think you become a bit shrill … People are struggling to meet the costs of living. People feel things are going up much more than the measured rate of inflation.”

As Keating did in 1993 though, Morrison has focused on his opponents’ tax policy – in this case the pledge to abolish refundable franking credits on share dividends. It’s a plan to scrap a tax concession and is deeply unpopular with many self-funded retirees but hard to explain to the rest of the electorate.

Morrison calls it “this pernicious tax”.

“It’s not reform, it’s a raid,” the prime minister said on Thursday. “It’s a raid on people’s savings and investments. It’s a raid that will actually cost our economy. It will cost jobs.”

Morrison promised to create 1.25 million new jobs over the next five years, a level largely in line with the recent rate of job creation. With underemployment still a significant issue, there was some confusion as to exactly how many of the new jobs would be full-time.

Assistant Treasurer Stuart Robert initially insisted jobs created would be full-time before amending his commentary.

“There will absolutely be a mix,” Robert said.

Morrison faces a battle to engage those for whom a severe economic downturn is little more than history.

“At the election this year, only half of those of voting age will have experienced a recession during their working lives,” Morrison said during his jobs announcement.

“So, it is important to remind us all that our economy cannot be taken for granted … The strength of our economy determines our choices and opportunities. It underpins our quality of life, it enables our way of life. I do not want Australians to learn just how important a strong economy is to each of them by having to endure the cruel lessons of a weaker economy under Labor.”

Opposition Leader Bill Shorten said the Liberal Party was more focused on “taking each other out” than investing in the future.

“What this country’s crying out for … is vision,” Shorten said, promising more public transport investment, on this occasion in southern Queensland. “People are sick of the day-to-day politics. What they want to know is, what do we think this country will look like in 2030 and beyond?”

Morrison has accused Labor of undermining future job creation by planning to remove existing tax concessions, including the ability to negatively gear investment properties.

“That is going to make our economy weaker,” he says. “That is going to weaken the ability of Australia to pay for Medicare, to pay for hospitals, to pay for schools.”

Hewson says some of Labor’s policies “may impact negatively” on the economy and speculates the opposition may not proceed with the wind-back of negative gearing if it wins government, given the fall in house prices.

Shadow treasurer Chris Bowen insists it will.

“It’ll be very, very clear before the next election when that policy will start from and of course every investment is grandfathered and protected,” Bowen said, referring to existing investment properties.

“All they’ve got is scare,” Bowen said of the government on Wednesday. “They don’t have vision, they don’t have policies, they don’t have courage. Let’s bring on the debate.”

 

Qualitative pollster Tony Mitchelmore, of research company Visibility, says voters are also telling him Morrison’s pitch of a stronger economy isn’t squaring with their daily experiences.

“People just say, ‘God, you’re out of touch – have you been to the shops lately?’ ” Mitchelmore says of the political rhetoric.

He says the cost of living is still registering as the top voter concern.

Reports from the retail sector reflect that, too, with sources saying spending is lower than during the global financial crisis.

Analysis of the problem from Westpac and Citi economists, published by Inside Retail this week, attributes the fall in discretionary spending to fears about the housing market.

Mitchelmore says the Coalition may have some credibility on job creation that it can leverage, but what had been a good story to tell on the economy was undermined by the change of prime minister.

“It’s not as good a card as it was six months ago,” he tells The Saturday Paper.

Mitchelmore says the Coalition’s standing had been “coming back, improving” under Malcolm Turnbull – voters were no longer talking about job insecurity and were not concerned about debt and deficit.

Now, along with more “doom and gloom” fuelled by economic uncertainties overseas, they were left feeling disillusioned once again at the antics in Canberra.

“The biggest problem is getting anyone to listen,” Mitchelmore says.

The other issue that has emerged strongly is concern about population growth and overcrowding.

“I’ve never seen that population thing as strong as it is,” Mitchelmore says of his research.

Scott Morrison is seeking to recapture the drifting attention and harvest the sentiment on population with big promises on “congestion-busting” infrastructure funding and jobs creation.

 

While Keating’s surprise win has provided a blueprint for Morrison, circumstances mean there are some deviations in the current prime minister’s approach.

Unlike Keating circa 1993, Morrison is able to deflect direct blame for removing a previous prime minister, arguing he was not the protagonist in last year’s coup but merely the second contestant.

This week he dismissed ongoing concern about Turnbull’s demise as old news.

But its legacy – and the absence of action on climate change, which Turnbull championed – have given rise to another new threat in the form of several more prominent independents challenging incumbent Liberals in safe seats.

Liberal strategists acknowledge the party’s chances of re-election aren’t helped by the emergence of Winter Olympian Zali Steggall in former prime minister Tony Abbott’s northern Sydney seat of Warringah, former head of the Clean Energy Finance Corporation Oliver Yates running against Treasurer Josh Frydenberg in Kooyong in Melbourne’s east, and Liberal MP turned independent Julia Banks switching seats to contest Flinders, south of Melbourne, against Health Minister Greg Hunt.

The strategists argue that in the Victorian seats, Labor remains their greatest electoral opponent and, in Warringah, Abbott’s longevity and high profile will make him hard to unseat. But they also acknowledge the challengers will need to be opposed strongly and no seat, traditionally safe or not, can be taken for granted.

Having so many high-profile independents will force the Liberals to divert attention and precious campaign funds into seats they have been able to assume previously were theirs.

Now in minority government, they need to not only hold what they have but win more seats back.

Agitation over a lack of action on climate change is a common factor in all three newly targeted seats, and in former prime minister Malcolm Turnbull’s old seat of Wentworth, now held by independent Kerryn Phelps.

Mitchelmore says while it doesn’t rate highest among voters’ concerns relative to other issues, it could still add a complication for some incumbent Liberals.

“It’s just an unpopular position,” Mitchelmore says. “Being anti-climate-change [action], you’re just on the wrong side of the percentages.”

In Warringah and Flinders, the act of ousting Turnbull is also a factor.

Those who were responsible for orchestrating the coup are now falling in behind Morrison, but their awkward rhetoric leaves them at risk of fuelling exactly the kind of disenchantment of which Mitchelmore warns.

The primary challenger, Home Affairs Minister Peter Dutton, whose own Queensland seat of Dickson is highly marginal, appeared to mark himself down when he said this week: “In Scott Morrison, Queenslanders have the best prime minister possible to achieve what we need as families, as businesses to get on with our lives.”

Accomplice Greg Hunt piled on more praise as he faced questions about his role in bringing down Turnbull.

“I always look forward, and I think that’s a very important position in life for everybody,” Hunt said. “I think Scott Morrison is doing an incredible job. I think he has the potential to be the most extraordinary leader not just of the federal Liberal Party, not just of the Liberal Party across Australia, but of any party since John Howard. He’s an incredible person.”

Labor unkindly calls Morrison “the advertising guy”. But his folksy, cap-wearing, beer-drinking, family-man persona is apparently proving an easier sell in some quarters than “Mr Harbourside Mansion”.

In campaigning hard on the economy, though, Morrison is largely pursuing the same theme as Turnbull did in 2016, albeit under a different banner.

Gone is Turnbull’s verbless slogan – “Jobs and growth” – and in its place is “A stronger economy. A secure future.”, complete with full stops. Keating’s single word slogan in 1996 sought the same sense of indisputability: “Leadership.” Labor research at the time found a full stop represented decisiveness.

Keating’s campaign posters showed the then prime minister, casually dressed, engaged in a very Aussie pursuit – downing a stubby. But by then, not even the most carefully crafted marketing strategy could save him.

No doubt the current prime minister has also taken note of that.

This article was first published in the print edition of The Saturday Paper on Feb 2, 2019 as "John Hewson: Morrison isn’t Paul Keating". Subscribe here.

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