My Commentary of 4 August examined Turnbull’s decisions in the period since the July 2 election when there was an opportunity to elaborate on policies neglected during the election. I concluded there was in reality a continuation of bad judgements as to both substance and process in the limited policies announced. Yesterday John Stone wrote Del-Con Notes in The Spectator surveying the election results. He described Turnbull “as a supreme narcissist”, a term seemingly being used overseas to characterise a culture seen by some as having developed around people in various walks of life who have excessive self-esteem (see discussion in an article not available digitally “Ego is not a dirty word”, Weekend AFR 6-7 Aug 2016)). Applied to Turnbull it suggests a political leader who has a limited interest in other peoples’ views or even that his own decisions turn out to be wrong. Stone concludes that “ sooner or later Turnbull will have to go” (see Spectator Australia article).
Whether the Coalition will have enough seats to form government remains unclear and it is by no means certain that it will be able to remain in government. But one or two certainties are clear. Most importantly, the governing of Australia will be much more difficult, perhaps as difficult as it was under Whitlam when the initial budget was put together by Whitlam and his Deputy on their own. The Turnbull government has already introduced a budget but that has still be considered by Parliament. Labor will doubtless argue that Turnbull’s bad election result means that this budget needs to be revised. As Terry McCrann points out below, any budget now needs to alsotake account of the likely reduction in Australia’s AAA credit rating.
My Commentary sent out late Sunday (thanks to those who sent compliments) drew particular attention to the article by Judith Sloan on the Federal budget and her conclusion that “Labor is completely out of control fiscally; the Coalition is slightly better but no cigar”. This followed other strong critiques, including by John Stone. Meantime we have Turnbull and Shorten buying votes as they go from electorate to electorate and adding up to $100mn a day to budget spending. What does the odd million matter?
Recipients of my recent Commentaries will be well aware of my expressions of concern about the budget outlook in the last couple of weeks. Friday’s Commentary expressed additional concerns after the publication by the heads of Treasury and Finance in PEFO of their concerns, albeit expressed diplomatically (at the same time it was reported that Treasury head Fraser would resign after the election: he will be a serious loss and his successor under either party will find him difficult to follow). I also drew attention to the Spectator Article by John Stone, which not only savaged the Coalition’s budget but pointed out that neither Labor nor “independent” journalist commentators have (with one or two exceptions) drawn attention to the seriousness of the economic problem Australia now faces. I concluded by suggesting that the Coalition should acknowledge the problem and indicate that after the election it will start a program of reducing spending by at least 2% of GDP over the next three years.
As expected, today’s publication by Treasury and Finance of updated fiscal and economic estimates and projections – the so called PEFO published under the Charter Of Budget Honesty - do not show any significant change since the Budget of 3 May. I have include the most important sections of PEFO here.
In the election now under way the Turnbull government has so far been selling its re-election on the theme of “jobs and growth”. In my last two Commentaries I have given reasons why this poses problems, based as it is on a budget presented as an economic plan which has very limited substance in terms of either its aggregates or its components. As The Australian’s Economic Editor Uren put it, “taken together, the initiatives in the budget will not shift the dial on national growth one way or another to a measurable extent”. This is already reflected in dissatisfaction amongst Coalition members, with no lift in polling following the budget (in Newspoll the Coalition’s TPP remained fractionally below Labor’s), a majority of voters judging that the budget left them worse off but with Turnbull still well ahead as the better PM. There has also been questioning of the components by media and other commentators. Further, in the first public debate in front of a supposedly undecided audience, Shorten easily won the head count. On the ABC’s Insiders today there was agreement from the four participants (all with the left inclinations that the ABC normally gives preference to) that Turnbull has so far shown less ability than Shorten to get his message across.
Turnbull’s 36 hour visit to China and his meetings (and banquets) there with President Xi and Premier Le Keqiang may have enhanced his role as a PM able to get on with important leaders from other countries. Many of his reported comments also appeared to be designed to show that he is knowledgeable about Chinese history. But the question is whether anything came out of the visit.
When on 15 September Turnbull defeated Abbott 54/44 in his challenge for PM, he encouraged the then Industry Minister Macfarlane to vote for him by reminding him what good friends they were. But that did not stop Turnbull removing Macfarlane from Cabinet. Such is politics one might say.
We have now experienced two meetings/summits of world leaders following the Paris terrorist attacks last Friday, one by the G20 in Turkey and one in Manila by those involved in the negotiation of the Trans-Pacific Partnership trade agreement (still to be approved by the US Congress). Although there was a general recognition at both meetings that the Islamic State constituted a powerful force and agreement that “something needs to be done” to combat it, no specific combined response was agreed, except that whatever else might be done boots on the ground are ruled out.