Turnbull leaves nation in twilight zone before election call

Few in the parliament share the prime minister’s view that he hasn’t taken the nation into a twilight zone. We are in the half-light of an election date that has been set by a government that refuses to believe it has triggered an election campaign. Malcolm Turnbull is trying to have it both ways. He says, “We are governing, we have a lot of decisions to make, not the least of which is the budget.” No caretaker can bring down a budget. Technically true, but it looks like that’s just what it is.

His treasurer, Scott Morrison, has no illusions that this year’s fiscal manifesto has been given the highest degree of difficulty. He told the party room this is no “normal or typical budget” but a “jumpoff point for a federal election”. And it will be delivered in the overheated furnace that is a general election. After faffing around with the constitutional niceties, Turnbull belatedly fired the starter’s gun in parliament when goaded by Labor’s Bill Shorten. “After the budget I will advise the governor-general to dissolve both houses of parliament and I will advise him to call an election on the 2nd of July.”

This set the nation on course for a 74-day campaign – official or not. Every stumble, every miscommunication will be magnified for both sides. As always, it is the government that has most to lose. Already the election effect is being felt in the boardrooms. A Dun & Bradstreet survey of business sentiment picked up a more pessimistic mood. Economist Stephen Koukoulas says the best explanation is the uncertainty generated by the looming poll.

He says it shouldn’t surprise: a similar sentiment has accompanied the past six or seven elections. Investment decisions are delayed and consumers tend to go into their shells. Peter Strong, of the Council of Small Business Australia, says the only good thing about the three-month hiatus is it will come to an end on a specified day.

But what is really adding to the national anxiety is the incredible tightening of the polls. Incredible because the general view was that a lacklustre Shorten would never be a match for the talented, articulate and urbane Turnbull. Consider this: we have had five published opinion polls in five days. ReachTEL, Fairfax Ipsos and Essential are all 50–50 two-party preferred. Morgan and Newspoll are 51–49 for the ALP. In fact, it was the second Newspoll in a row to have Labor ahead. For the first time since Turnbull replaced Tony Abbott, the government did not lead in a single poll. The polling average gives a slight edge to Labor, but independent analyst Andrew Catsaras keeps it at 50–50 and says “Labor has one chance in three of winning”. This is a huge improvement on its one chance in 20 after Turnbull’s September palace coup.

Catsaras says the polls translate to a hung parliament. The Coalition would be left with 73 seats, the ALP with 71, and six seats to the crossbench. What it definitely means is this election will be hard-fought trench warfare in the marginals. Labor’s primary vote, averaged at 34.6 per cent, is no help here. The party’s research shows it doing better in the regional marginals than in the metropolitan seats. The reality is the swings are never uniform but the trend points to the government slowly losing momentum – just not enough at this stage to give the ALP victory.

If the Catsaras analysis holds through to polling day, it would give Turnbull the better chance of forming a minority government. He would probably be much more attractive to the crossbench than Tony Abbott was in 2010. But the worry is such a result would weaken Turnbull within his own party. As one Liberal wit opined: “Abbott could claim he could have done just as poorly.”

The backstory to this election will be for the Liberals what it was for Labor in 2013: leadership instability. One voter in the New South Wales bellwether seat of Eden-Monaro told Ten Eyewitness News, “It’s terrible – they’ve rolled another elected government, both sides have done it. We don’t have any government we can trust.” The precedent is set. Both major parties have made elected prime ministers disposable. That may be the only argument the Liberals have: neither side is better than the other. Labor says it has learned its lesson. Shorten will be its first leader to survive a term since Kim Beazley 18 years ago.

The big worry for the Turnbull re-election project is whether it is in line with Abbott’s, his deposed predecessor. There is more than a kernel of truth in an observation made only half in jest by The Australia Institute’s Ben Oquist: “How do you know when Turnbull has had a bad week? When Abbott, Bernardi, Andrews or Abetz haven’t put their heads up.” These Liberal conservatives, dubbed “deluded conservatives” by some, are probably a bigger threat to a Coalition victory than a resurgent Labor party.

The left-leaning political activist organisation GetUp! is gearing up to help Turnbull – sort of. Its national director, Paul Oosting, says they are planning to target vulnerable hard-right-wing Coalition MPs such as Andrew Nikolic in the marginal seat of Bass. In the Queensland state election campaign, 300 volunteer booth workers handed out how-to-vote cards directing preferences away from Campbell Newman’s LNP candidates. Oosting is planning a similar tactic on July 2.

The issue that most motivated the activists then was saving the Great Barrier Reef. Oosting claims their campaign helped deliver four seats to Labor and minority government. GetUp! says the Canadian election showed the increasing importance of social media. The organisation’s “internet-enabled” business model depends on hot-button issues to motivate donors and volunteers. It has an annual budget of $9 million and 1.1 million people on its books. Its ability to crowdfund quickly is remarkable.

The GetUp! list of concerns includes corporate tax, schools, renewable energy, asylum seekers and marriage equality. This, not surprisingly, plays into the agenda of Labor and the Greens, and, not to be ignored, the new kid on the block, the Nick Xenophon Team.

Shorten was quicker to respond to the prime minister pulling the double-dissolution election trigger than Turnbull himself. He used all the gravitas of a formal news conference against a curtained backdrop with flags. “The choices couldn’t be any clearer between Labor and Liberal. Labor has positive policies that put people first. The Liberal Party seems intent upon defending vested interests and the big banks. Labor is ready for this election because we know what we stand for. Decent jobs, well-funded education, quality health care, protecting Medicare, renewable energy encouraged to take up the burden of climate change, and a fair taxation system.”

Turnbull by contrast went to a construction site and looked distracted as he was shown around. He was reluctant to confirm the July 2 date. He only “expected” it. He was more definitive in parliament later in the day. But he did elevate the Australian Building and Construction Commission (ABCC) to almost panacea status for boosting the economy. He valiantly claimed that the people of Australia understand they are paying too much for schools and hospitals and roads “because of the lawlessness” in the construction industry.

The closest he got to an election manifesto was when he said the ABCC is part of his economic plan. Every element of which, “from innovation, from free trade, from competition reforms … our defence white paper … every element of our economic plan is focused on delivering jobs”.

The biggest element of the economic plan will be in the politically overburdened budget. It will be presented by a treasurer who, according to a ReachTEL poll, only 15.7 per cent of people think is doing a good job. A large number – 37 per cent – think he’s doing an average job. But the indications are he will be delivering one of Turnbull’s long-held ambitions for reform in the area of superannuation. The attraction is an instant message of fairness and a big bottom-line boost. There was neither confirmation nor denial of a Fairfax story that said the government would crack down harder on high-income tax concessions than Labor, delivering a $2 billion a year saving compared with Labor’s $500 million.

It will be a bonus if the top end arc up. It is certainly hitting voters normally put in the Liberals camp. The higher tax on contributions for those earning $180,000 or more may make it easier to foreshadow a company tax cut. It goes a long way to explaining why the government passed up doing anything about the very generous capital gains tax concessions and negative gearing.

Last week the finance minister, like the treasurer, had to admit that the budget would see tax increases. But Mathias Cormann thinks the Liberals’ tax rises are good while Labor’s are bad. The banks apparently agree with him. The Australian Bankers’ Association supported the extensive reforms to ASIC announced by Morrison on Wednesday. And that includes the big new user-pays tax on them of $120 million a year rising to more than $300 million in a couple of years’ time. Morrison says he will be furious if they hand that on to their customers. Really.

One Labor insider said the endorsement from the banks says everything. Bill Shorten’s response was dismissive. He said the banks would be popping champagne corks because “Malcolm Turnbull isn’t pushing on them a royal commission”. Ironically, Morrison’s claims that there was no need for a royal commission because ASIC already had the powers looked very thin when he released a scathing capability review that showed no such thing. Nor did he include in the refurbished ASIC any ability to hold public hearings or to inquire broadly into the banks.

There are now 70 days left for the government to emerge from the twilight zone. Never has that old political axiom been truer: anything can happen.

This article was first published in the print edition of The Saturday Paper on April 23, 2016 as "Twilight saga: breaking down".

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