How damaging is the Coalition identity crisis?

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The think tank loon pond that underpins Coalition ideas these days appears to have overreached. A shakeout of sorts has begun and one wonders if it can transpire without further deleterious impacts upon the economy. Tristan Edis reports that:

Alan Moran, who has been one of the most vociferous and long-standing opponents of renewable energy and controls on greenhouse gas emissions in this country, has apparently been sacked from the Institute of Public Affairs – a right-wing think tank.

The chief of the IPA, John Roskam told The Australian newspaper that Moran had left the IPA due to concerns about his “social media activity”.

The Australian noted that in recent weeks Alan Moran’s tweet, “Is there ever anything but evil coming from Islam?’’, had incited considerable outrage in the community. In addition, Moran controversially suggested that deputy Labor leader Tanya Plibersek was using rape allegations to destabilise Bill Shorten’s leadership.

In December last year rumours surfaced that Tony Abbott’s office was pushing for Alan Moran to lead a government review of the Renewable Energy Target. Moran was then apparently dropped in favour of businessman Dick Warburton, when it was realised Moran’s appointment would be viewed as extremely biased.

It is interesting to note that Moran’s apparent sacking has happened just as the IPA has launched an unbridled attack upon the Coalition for failing to deliver its “right to bigotry” legislation, and as the Abbott government and Murdoch press themselves attempt to shift the policy debate to an anti-Muslim agenda. Let’s not forget as well that Warburton has proven insufficiently radical for Abbott and he is now pressing to scrap the RET in contradiction to his own inquiry. Consistency is not at premium here for anybody.

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Meanwhile, the AFR is reporting that the senate wants Abbott to move into the centre:

The federal government’s chances of a budget breakthrough any time soon are bleak, with Senate crossbenchers saying they will not be “bullied” by threats of tax increases.

There was no sign of breakthrough in the standoff a day before Parliament resumed as members of cabinet were advised by Coalition party officials to show more public discipline.

Following a six-week winter break marked by bungles, gaffes and mixed messages on budget and other policy issues, Liberal Party federal director Brian Loughnane and his Nationals counterpart Scott Mitchell spoke to the cabinet on strategy.

Sources summarised the key ­messages as “no more distractions”, “no more ideology”, “stick to the middle” and “slow things down”.

Good advice. Abbott should take it. Bloomberg is now musing on whether Australian political chaos is a new risk factor for markets:

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The impasse comes at a sensitive time for the economy, which needs new domestic drivers to maintain growth after 23 years without recession as mining investment drops away. The central bank has slashed interest rates to a record low 2.5 percent and left them unchanged for the past year to help foster the transition.

Reserve Bank of Australia Governor Glenn Stevens told a parliamentary panel last week that the economy needs an injection of confidence to encourage business spending, saying monetary policy alone can’t provide that trigger.

The budget stand-off “could lead to a deterioration in business confidence, if firms were to come to the view that the current parliament is no more capable of managing the nation’s finances than its predecessors,” said Saul Eslake, chief Australia economist at Bank of America Merrill Lynch inMelbourne. “That could, in turn, materially adversely affect the outlook for investment and employment in the non-mining sectors of the Australian economy.”

I’m sure markets will look through the idiocy, after all they’ve been schooled in it now for several years by the US right, but there’s little doubt local confidence will remain bunkered.

I can’t recall a government that was so chaotic in its communications, agenda and values simultaneously. The Gillard period, with its troubled upper and lower house relations, was serene by comparison!

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.