22
Nov
2017

Turnbull Which way Which way

Turnbull’s Psychology

Turnbull’s decision to postpone by a week the resumption of Parliament, and his “guidance” to MPs that it should then focus for a couple of weeks on debating the same sex marriage legislation, has not been favourably received. It is widely seen as being an attempt to be “dodge the music” and extend the time at which Parliament would not be considering policy issues.  His subsequent speech to the Business Council, where the main message was that his government wants to” ease the burden on middle-income Australians and at the same time return the budget to surplus”, hasn’t been well received either. Turnbull’s explanation (sic) that he is only “actively working” on preventing the otherwise higher tax burden through bracket creep is unlikely to persuade voters that he should stay as leader.

Of course, Turnbull is now desperate to attract electoral support. One attempt to do so is his decision send out a message to all and sundry (including me) explaining his Business Council speech.  But he first did photo shots at the fruit and veg market at 4.44 am!

Has he reached the same stage as Robert Mugabe? At 93 he found himself  in a similar position to that in which Alice found herself when she went down the rabbit burrow and didn’t know where to turn. Hence we witnessed a series of RM trying to decide which way which way. Now, it seems, he actually has resigned, although without a replacement being named. Presumably even his apparently numerous supporters felt the time had come.

Yesterday’s Cut & Paste in The Australian suggested that Mugabe’s position was similar to that of the singer in Dreamgirls, a  Broadway musical hit of December 1981:

And I am telling you I’m not going / Even though the rough times are showing

/There’s just no way, there’s no way

I’m staying, I’m staying / And you, and you, and you / You’re gonna love me

Turnbull is undoubtedly  singing the same song but it has become more difficult for him to find a chorus.

Bolt on a Rat in the Ranks

Yesterday Andrew Bolt published an article claiming that a Coalition MP had told him he would resign next month unless  Turnbull is replaced as Prime Minister by a leader who can appeal to conservative voters (see Coalition MP Threatens Resignation). “This government has left the party and the values of the party,” said the lower house MP, who does not want to be identified yet. “It is miles away from what our rank and file say. “People tell me Malcolm Turnbull can’t make decisions, he dithers … “The final thing they say is that he’s a million miles from our values.”

This has naturally created considerable interest and Bolt has subsequently acknowledged on Sky News that  he is taking a risk in publishing in advance the in confidence views of a Coalition MP who might not carry out his threat.  Bolt has said, however, that he is prepared to take the risk that the MP would not change his mind because he has had a long standing relationship with him and felt he could trust him. He emphasised that the MP was not prepared to accept Bishop as the replacement because he judged she would be worse.

If this resignation eventuates next week, it is likely that the Turnbull government would then be in a minority in the lower House. In that event a loss to a motion of no confidence calling for the dissolution of Parliament and an election, which would likely be moved by the Opposition,  would force an election.

Other Defensive Measures by Turnbull

As pointed out in today’s The Australian, “the sudden switch to a tax discussion smacks of a political tactic rather than an economic strategy” (see OZ Editorial on Tax Cuts). But even if the mid-year budget update (due approx mid-December) turns out better than suggested by last May’s full year estimates, any tax cuts would probably do no more than “cut” the bracket creep that would otherwise occur in 2018-19 and still leave a deficit for that year. In any event voters are not going to upgrade their view of Turnbull unless they are given figures which are seen as realistic and responsible by commentators.

A similar reaction probably applies to Frydenberg’s article claiming the benefits from the National Energy Guarantee scheme announced only a month ago with an undertaking that detailed modelling would be presented to the COAG meeting on 24 November.  On this occasion  Frydenberg says the estimates of lower prices under NEG are based on modelling by Frontier Economics, which formerly supplied Labor with modelling of the energy intensity scheme  (which Frydenberg has rejected). It appears that Frontier reported to the Energy Security Board (ESB), which was established just prior to the NEG scheme and was supposed to be composed of energy and economic “experts”. It was frequently quoted by Turnbull as the key advisory body in deciding his government’s adoption of NEG.  Interestingly, the AFR reports that the chair of ESB told an energy efficiency conference that she did not expect any agreement at COAG before April next year.

Frydenberg claims in his article that the predicted savings by Frontier are larger than those quoted earlier by the ESB. According to The Australian’s David Crowe, “the modelling by Frontier Economics finds that retail prices would be $120 a year lower on average for households from 2020 to 2030 and that wholesale prices would be 23 per cent lower, saving millions of dollars for factories and other big energy users. The analysis, done for the Energy Security Board of national regulators, shows that another $280 a year will be cut from household electricity bills over the same period from existing policies, helped in part by lower costs for renewable energy” (see Frontier Economics Models Benefits from NEG). However, Frydenberg  uses little more than generalities in (apparently) endorsing their extent (see Frydenberg on Why Energy Prices will Fall). Energy market modelling, for example, is “based on a series of assumptions related to fuel prices, technology costs and demand forecasts” and “it shows that the share of renewables is likely to be about 32-36 per cent”. But the extent of assumptions is not likely to convince the electorate (or some of the states) that Turnbull should continue to lead.

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