9
Feb
2015

Spill & Abbott Reaction Leave Uncertainty

The outcome of the spill indicates Abbott has to do much more to satisfy his own party members and to improve the Coalition’s polling, which  dropped today to disastrously low levels before the spill (see below Judgment day as PM loses voters). His immediate reaction was to indicate that there will be an increased consultative process, both with the Parliamentary party and with those affected by policies under consideration. But does this really mean  there will be no medical co-payment without GP backing?

Abbott also re-affirmed his earlier statement that there will be a new families/small business package. But it is not encouraging to move towards a vote buying approach, particularly at a time when the Reserve Bank has reduced its forecast range for economic growth to December 2015 to 1.75-2.75%.  Its long awaited cut in the cash rate, and market predictions of further cuts, suggest the forecast may be a bit optimistic. The forecast improvement beyond 2015 appears to rely to a considerable extent on lower interest and exchange rates having a “stimulatory” effect, and that expected large exports of LNG are not adversely affected by lower oil prices. Abbott did not mention today that the poorer pre-election economic outlook has to be taken into account in framing policies.

Coincidentally (possibly deliberately),  the United Voice union is seeking an enormous increase in wages from the Fair Work Commission for child care workers (see below Union seeks 70pc rise for childcare workforce). What is being proposed to reduce union power? Will Abbott continue to simply accept decisions by the FWC or consult the union?

Overall, it is difficult to see that the proposed changes so far will lead to a significant improvement in polling and, if that doesn’t happen, party dissatisfaction will not be alleviated. I have previously written about the need to greatly clarify policy objectives and the implications of those already announced. Until that is done it is likely that leadership uncertainty will continue.

Note, however, that the polling indicates that a clear majority of Coalition voters do not favour Turnbull, who has given no public indication of what he would do if elected. Note also that polling in NSW indicates an increase in those favouring Premier Baird in the end March election there, suggesting that if reformist policies and their explanation are made clear that will help polling (See below Leadership spill: Abbott saga has little impact on Mike Baird)

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