Turnbull presses on over summer
Malcolm Turnbull has spent the holidays striving to further turn back the tide of disappointment that has swamped his prime ministership. So intent on the task he did not take a formal break over the silly season. He defied the wisdom that says it is better to let voters enjoy the beach, the cricket and the barbecue than attempt to cut through the summer haze. In his sights was Labor’s entrenched lead in the opinion polls and the firm belief that the tide is turning for him and the government.
There is no doubt he begins the year in better shape than he did 12 months ago. He is determined to quarantine the government from further dual citizen disruption and turn the focus onto Labor by referring three more of its MPs to the High Court. One of the biggest barnacles, the internally divisive battle over marriage equality, has finally been resolved in a way that he had for so long championed. That decisive victory, however, has not ended the culture wars within the Coalition parties. This point was made without much subtlety by the government’s highest profile backbencher, Tony Abbott.
Of course, Abbott is more than a mere backbencher, he is a smarting, dumped prime minister still determined to impose his agenda on his successor. While Turnbull does his level best to ignore Abbott, he is constantly drawn into the argument at doorstops where journalists insist on asking him to reply to Abbott’s latest prognostications.
Hostilities resumed on Monday. Abbott used an opinion piece in The Australian and then an interview with his favourite shock jock, Ray Hadley, on Radio 2GB to state his intentions. Super fit after a summer of bike racing, Abbott confirmed he would not be holding his tongue this year. He wrote that “doubtless you’ll hear a lot from me this year about ending the emissions obsession that’s sending power prices through the roof and killing industries”. But the agenda doesn’t stop there.
In what sounds like a leaf out of the Donald Trump playbook, he says he’ll have more to say about scaling back immigration to keep wages up and housing prices down. And he puts it in terms of a strategy for winning the election that he, like everyone else, expects before the end of the year. In a piece of gratuitous advice that Turnbull could well and truly do without, he said, “these are the sorts of things when it comes to an election a government would get credit for”.
For his part, Turnbull gave a long defence of his government’s immigration policy, tying it to his success in “stopping the boats”. This allows refugees of our choice to enter and, besides, our skills-based program is the envy of the world, he says. A more direct slap down of Abbott came from the Australian Industry Group’s chief executive, Innes Willox. He says 620,000 new businesses have been created in Australia by new migrants. “Immigration is a job creator, creating thousands of jobs for many people.”
Abbott’s revisiting of our “emissions obsession” and his linking of it to rising power prices takes some chutzpah. After all, he was the political leader who promised all that would be fixed with the scrapping of the carbon tax. History proves the price relief was short-lived but the destruction of policy certainty in the energy market decimated investment and badly compromised future energy security.
This reality-denying obduracy is not restricted to Abbott. It is shared by the deputy prime minister, Barnaby Joyce, and Nationals and Liberal coal champions such as Craig Kelly. The outspoken Kelly is chair of the Coalition’s environment and energy committee, a position he exploits to the hilt to make Turnbull’s and Energy Minister Josh Frydenberg’s lives miserable.
According to one of Kelly’s colleagues, he is so dumb he thinks he is helping Turnbull by thwarting every attempt to end the energy wars. Not content with helping to torpedo the clean energy target, he is now rushing into battle to discourage Frydenberg from anything that might promote electric cars. This mission is shared by Joyce. For now, Frydenberg is sticking to his guns, saying the critics who ridicule this technology would “probably be the ones buying them in a decade’s time”.
Turnbull has spent the past few weeks meticulously planning strategy and tactics for his revival. One insider says the PM has had a series of deep-dive sessions on policy. He has also had backbenchers break their holidays to meet him for a drink and frank exchange of views.
In what looks and smells like some pre-emptive electioneering, Turnbull has campaigned in regional Victoria, Tasmania and Queensland, where he has made announcements such as a “Geelong city deal”, a similar plan for a “Hobart city deal”, and $60 million for Great Barrier Reef repair.
How much of it is noticed is the question, especially as the improving economy is failing to translate into benefits for working families. Unlike in previous upswings, record jobs growth has not addressed underemployment or stagnating wages growth. This, in turn, is causing consumers to spend less as they struggle with burgeoning household debt.
As such, the selling job for Turnbull and his treasurer, Scott Morrison, is so much harder. Both have become shrill as they try to persuade the nation that the answer is to emulate United States President Donald Trump and splash out billions in corporate tax cuts. This will lead to more jobs and higher wages, they insist, as companies immediately share their good fortune with new and old employees.
The Mid-Year Economic and Fiscal Outlook – the treasurer’s official budget update – was not so sure. It downgraded wage growth forecasts, despite also confirming an improving economy. And there was more proof of the wishful thinking behind the linking of tax cuts with higher wages in the Australian Industry Group’s “Business Prospects” survey. It found a majority of chief executives believed wage growth would stay about 2 per cent, even though Treasury is expecting inflation to increase by 2.5 per cent. That’s a real wage cut. Hardly designed to mollify voters in an election year.
It doesn’t take Turnbull or Morrison long at any of their major announcements to attack Bill Shorten. He is so undeterred by their taunts that he has opportunistically ditched corporate tax cuts he supported in government. He rejects the Trump prescription, which even the International Monetary Fund saw as a temporary sugar hit that would plunge the US budget into multitrillion-dollar debt and force subsequent administrations to fix the damage with spending cuts and tax rises. A similar splurge by Ronald Reagan was repaired by Bill Clinton nine years later.
Shorten says he is focused on the cost-of-living battles of everyday Australians. It is a message he will take to the National Press Club in a scene-setting speech on Tuesday. Labor derides Turnbull’s talk of wanting to give middle Australia a tax cut when at the same time he is raising the Medicare levy – an impost on top of income tax for everyone earning below $87,000. Economist Richard Denniss says the government is trying to have it every which way when it argues that tax cuts aid workforce participation except when it gets the same via an income tax levy.
At least the Australian government is alert to the dangers of plunging the budget further into deficit. Morrison insists it will return to balance in 2020-21. This is based on the heroic assumption that parliament will pass all his planned spending cuts and that China will continue to power our economy with its demand for our commodities, its investment, its tourists and its students filling our colleges and universities.
Somehow, Australia can actively take part in actions to contain or at least isolate China, strategically and economically, and not expect to invite any consequences. We are certainly walking a tightrope, expanding military engagement with Japan as part of Turnbull’s recent trip to Tokyo. As well as this, we are pushing to be included in training exercises with the US, Japan and India.
Labor’s Penny Wong, in a significant foreign policy speech in Singapore midweek, suggested we are using out-of-date paradigms. She said we have to accept Trump’s declaration that the post-World War II international order “is not working at all” and seek a new model that includes China rather than simply “talking about them”. This model would see China for the economic powerhouse it really is.
The “big deal” announcement of the week was the resuscitation of the Trans-Pacific Partnership. Now called by Turnbull the TPPII, it’s minus the US, thanks to Trump pulling out “because America is not going to be taken advantage of anymore”. The new trade deal bloc, which specifically excludes China, will be signed in March. Whatever it is, it is not the original TPP, but it has the same intent to counterbalance China in the region. How much this impresses voters is open to question.
Turnbull is hoping the question will be answered positively with the first Newspoll of the year next week. But then, he also hopes Abbott will just leave him alone.
This article was first published in the print edition of The Saturday Paper on Jan 26, 2018 as "Summer of the subsequent poll". Subscribe here.