The Brexit rupture coming Downunder

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Yesterday we saw two pieces of news that tell you where our politics are headed. The first was the UK slashing its immigration intake:

“There can be no question that recent levels of immigration motivated a large part of the [Brexit] vote,” [Home Secretary Amber Rudd] said.

She vowed to reduce net migration, which was 300,000 in 2016 and well over the government’s target of 100,000, to the “tens of thousands”…

“We have to look at all sources of immigration if we mean business,” she said.

Australian skilled workers and university students are potentially in the firing line with the government to examine whether it should “tighten the test” for companies who recruit from abroad.

“It’s become a tick box exercise, allowing some firms to get away with not training local people. We won’t win in the world if we don’t do more to upskill our own workforce,” she said.

She described as “generous” current rules allowing the families of international students working rights and bemoaned that foreign students studying English language degrees “don’t even have to be proficient in speaking English”.

Second, we saw this from former Prime Minister Tony Abbott:

Tony Abbott has told right-wing allies in Britain that he believes he has a reasonable chance of becoming prime minister again, Fairfax Media has learned.

The revelation confirms the former leader is hoping to emulate Kevin Rudd’s 2013 success in returning to the Lodge after being booted out by his own party in 2010 despite his public assurances that his leadership is “dead, buried and cremated” and that “the Abbott era is over”.

A senior Liberal source close to Mr Abbott said the former prime minister maintained a “good chance” of returning to the job because he is popular with the party membership compared to Malcolm Turnbull.

Mr Turnbull is widely perceived within the party to have failed to live up to expectations, scraped through the election with just a one-seat majority and continues to perform poorly in the polls.

The source said the outcome of the upcoming NSW State Council of the Liberal Party on October 22 was an important opportunity for Mr Abbott to showcase to the Parliamentary Party his strength with the wider membership.

There, his Federal Electorate Conference (FEC) will propose a motion for democratic reform of the party. It is likely to be opposed by the left wing of the party, but has a greater chance of succeeding than ever before.

The change would enable the party membership, which is predominantly right-wing, to have a greater say in pre-selecting candidates.

Other Liberals did not rule out the possibility of an Abbott comeback, saying his prospects had improved as Mr Turnbull had failed to improve. They also said it would be difficult to sell a change to a new leader to the base, meaning if a change were to happen it could only feasibly be a reinstatement of the former prime minister.

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There is absolutely no doubt what kind of platform Tony Abbott would lead. His visions of Anglophone purity have proven horribly prescient and to reboot the party’s chances at the next election he would have to differentiate himself from Malcolm Turnbull’s globalism. That point of difference will be the new brand of economics sweeping the Western world: lower immigration, higher protections and a swing back to the US alliance. He will use his recently rekindled relationship with Pauline Hanson as a political outrider.

Moreover, with Labor having recently committed itself to Big Australia for all eternity, the Abbott immigration wedge will be epic, cleaving the Labor caucus in two. What’s more, the low immigration platform will neutralise Labor’s joker in the pack – negative gearing reform proposals – by promising to take pressure off housing demand and to police foreign buying properly. And it does so while protecting the tax lurks of Abbott’s local specufestor base.

It also holds out the prospect that Abbott can take the high ground on the environment, including carbon output, by giving Australia a sustainable population. He could even be endorsed by the Australian Conservation Foundation!

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I’ve got to tell you that this prospect should not be taken lightly. It’s internally consistent, comes with precisely the right sloganeering and authentically anti-immigration leader, sets a spinnaker before the building anti-globalisation gale sweeping Western politics and vacuums up the population ponzi resistance at home that anyone with a political compass can feel building.

If I were Turnbull or Labor, I would get ahead of this by backing right away from Big Australia. The storm is coming.

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.