Can Scott Morrison Hold the Line?
The government had some good news on Wednesday: the economy grew by its fastest rate since the mining boom, with a June quarter result of 0.9% which meant an annual GDP growth of 3.4%.
The most significant factor was that household expenditure grew by 0.7% despite the fact that wage growth is still anaemic.These were, as Paul Keating would say, “a beautiful set of numbers.”
Scott Morrison needs all the good news he can get. The political environment is poisonous.
It appears that the Turnbull camp, having claimed to have elevated the new Prime Minister to power in order to thwart the conservative coup aimed at installing Peter Dutton as Liberal leader, is now trying to undermine Morrison in order to demonstrate that Malcolm Turnbull was the party’s best option.
The first leak which claimed that Malcolm Turnbull personally approved a $7.6 billion roads and rail package aimed at saving marginal seats across the country as part of his re-election blueprint.
Scott Morrison refused to confirm the report saying that he would announce his government’s infrastructure commitments in due course.
The second leak, which came the next day, was to the effect that Malcolm Turnbull was on the point of reaching agreement with the Catholic education authorities over a $4.4 billion funding package for Catholic schools to be implemented over the next ten years.
The new Prime Minister has pushed back against the idea that there was a done deal on Catholic education.
“I’ve made no secret of the fact that I am looking with Dan Tehan, the Minister, and we have been working constructively with the sector, the independent schools sector, the Catholic schools sector,” Morrison said.
“For this simple reason: I believe parents should have the opportunity to have greater choice in education. That’s always been a fundamental belief of the Liberal and National parties. And we want to make sure that the system [as] we go forward continues to respect that choice and ensures that we can have quality education and education that parents can choose from right across the country.
“So that’s unfinished business. And when we make decisions on those, and when we reach a conclusion on those, then I’ll announce it. And until then, the government’s policy remains as it is.”
On Tuesday there was another leak which claimed that Malcolm Turnbull had a new tax package ready to go.
This would have accelerated the tax cuts for small and medium sized businesses.
Phil Coorey reported in Tuesday’s ‘Australian Financial Review’ that Scott Morrison was proposing to implement a plan developed by Malcolm Turnbull to bring forward the already legislated cuts for businesses with turnovers capped at $50 million, which Labor opposes.
The plan was designed to make the next election a battle over small business tax cuts.
Coorey says that the cuts would cost $3.6 billion and would be implemented by 2021-22, five years earlier than previously anticipated.
The problem for Scott Morrison is that this attempt by the Turnbull camp to protect their leader’s legacy is removing any tactical advantage that Morrison might gain from the timing of these announceables.
Moreover the deal with the Catholic schools is mired in controversies and the new Prime Minister has not resolved these.
The impression is that the Turnbull camp is prepared to go to any lengths to prove that the former Prime Minister was the best option the Liberal party had, even if it means that the party is wiped out at the next election.
The problems for the new Prime Minister have been compounded by the claim by Julia Banks, the Member for Chisholm, that she would not be standing for re-election because she had been bullied by members of the Liberal and Labor parties.
Unfortunately Ms Banks provided no specifics which allowed for an interpretation that she had been bullied in relation to the leadership change even though she had not said this.
There are grounds for thinking that it was unlikely that Ms Banks was bullied in relation to the petition calling for a leadership spill or over the spill motion itself between Wednesday night and Friday.
Ms Banks was well known as a rusted on Turnbull supporter who had strong disagreements with Michael Sukkar, the Victorian faction leader, who was supporting Peter Dutton, so he would have seen it as pointless to lobby her as opposed to other Victorian Liberals like Tim Wilson.
All Dutton’s supporters have denied having any discussions with Julia Banks during the week of the leadership spills.
While much has been made of the misogynistic treatment of Julia Banks there has been relatively little comment on the fact that Malcolm Turnbull was prepared to drop Julie Bishop as Deputy Leader in order to give the job to Peter Dutton in exchange for his support.
Mr Dutton refused the offer because he did not believe it would go down well with the party or the electorate. It’s no wonder that Ms Bishop is peeved: she was a loyal deputy to Turnbull and he was prepared to throw her under a bus to save his own skin.
In the light of all this flak what approach should Scott Morrison take?
Firstly he should implement his policies on energy, Catholic schools, tax, immigration and the drought.
However he needs to give the voters a vision. To this end he should do what Tony Abbott and Malcolm Turnbull failed to do and make two headland speeches: one on the economy and another on climate change.
The speech on the economy should take advantage of the good economic indicators to show how the government will build on this to increase individual and household incomes and consolidate job security to counteract the inequality and job insecurity arguments of the Labor movement.
The climate change speech should emphasise that the government believes in the science of climate change but has reservations about the proposed economic solutions.
It could point out that many major signatories to the Paris agreement, like France, Germany and Canada, will not meet their commitments but that Australia will meet its 2020 commitments as will the United States even though it has withdrawn from the treaty.
However Mr Morrison should take the opportunity to reject the renewable energy target as well as the linear trajectory towards the 2030 cuts.
He should state that the emission reductions will be back ended and market based with the short term emphasis being placed on prices and reliability.