After spending eight weeks in a cave, Malcolm Turnbull has emerged to describe his vision for Australia and his government’s mission within it. In the accompanying photographs he looks 75 not 61, aged before his time. From Paul Kelly over the weekend:
The Prime Minister seeks a new voice and renovated mission as leader. It is based on a universal moral proposition, not arid economic mechanics. He is attempting to transcend his election rhetoric and find a fusion of economic narrative and morality tale.
…In an exclusive interview with this paper Turnbull says: “The essential obligation of this parliament has got to be coming to terms with the economic reality of our situation, putting aside the blame game, we should just recognise that we are living beyond our means and we have to have an honest debate about how we are going to deal with it.”
“Every dollar we borrow to fund our recurrent expenditure is a dollar we are borrowing from our children and grandchildren,” Turnbull says. With Labor seizing the moral agenda in the campaign — around fairness — Turnbull knows he must campaign and win on moral grounds. He calls the case for budget repair “a moral case”. He argues the “moral dimension” goes beyond the case for prudent bookkeeping.
“Intergenerational fairness is the fundamental building block of a fair society,” Turnbull says. “There is nothing more natural and human than looking after your children, than altruism towards your children. Now the way we care for our children as a society is ensuring we do not burden them with a mountain of debt.”
…Turnbull presents the challenge as a two-step process — getting people to realise the scale of the budget problem and then discussing the solution. “It’s a message for every member and senator, but it’s a message for every Australian,” he says.
“What we need to do better is to explain the situation we are in. I am a very firm believer that one of the most important elements in the role of a leader — whether it’s in public life or business — is to explain. It’s facing up to the realities. Once you have explained the problem, then you can have a debate about how to deal with it.”
Think about it — this was Tony Abbott’s problem. He failed to explain the motives behind the 2014 budget. Turnbull, moreover, has been ineffective to this point in explaining budget dynamics to the public. Given the new parliament, he has no choice — he will either explain convincingly or his prime ministership will fail.
With respect to Mr Kelly, that was not Mr Abbott’s problem at all. Most folks in the polity accept that a certain amount of fiscal rectitude from an incoming Coalition government is inevitable and healthy if painful. Abbott and Hockey did a good job of making the case for cuts, so much so that they were harangued by the press for being negative and did, indeed, weigh heavily on confidence.
The bigger problem for Abbott and Hockey came when the nature of their cuts was revealed as ideological. They slashed and burned lower and middle income welfare but left the top end untouched. Thus they were thrashed for a lack of fairness, triggering revolt in the polity and losing government.
This touched on the core flaw in their framework. They did not explain the post-mining boom need to improve Australian competitiveness, which is a national project of shared sacrifice. Putting the Budget back on an even keel is only a small part an essential broader structural change in the economy, which must be pushed away from yesteryear’s easy debt-accumulation and consumption model and towards productivity and tradables growth.
It’s pretty obvious that Abbott and Hockey just did not understand this. They thought that they could just ‘pull a Howard’ and cut spending and that the private sector would pick up the economic slack in some flush of renewed confidence.
But the private sector is not the same as it was under Howard. It’s been through a GFC, a mining boom, and now relies more than ever upon a few concentrated assets for wealth. Moreover, the income supporting those assets is in large part derived from low taxes and middle class welfare delivered by the mining boom (and Howard):
Abbott’s and Hockey’s cuts threatened to pull the rug from under their own economic model and they did not even know it.
Turnbull did. His public policy utterances in advance of his ascension understood that the challenge facing Australia is much broader than the Budget. He was on record about the need for huge structural reform in taxation, reform to the federation, reform in innovation and competition. He knew the real challenge was to address Australia’s twin deficits, both budget and current account, and that only structural change to more productive output would do it.
But to gain power he sold out. Outsmarted by Shorten and his seizure of the housing reform nettle, busy fending off the loon pond, determined not to alienate the party a second time, Turnbull abandoned what he knew. And today we get the result, a visionless, policy-drained, bent old man that is no more than a facsimile of the mistakes of Abbott and Hockey and their “budget crisis” painted over with “moral” nail polish.
There is no moral challenge in the budget, nor is there is it an inter-generational challenge. This is over-egging the Budget challenge to disguise the larger problem. There is no message here to resonate with the Parliament let alone with the polity. Turnbull’s “vision” is a mindless platitude of Coalition bog slapped liberally over the widening cracks in a reality of falling standards of living, houses children can’t afford and business being hollowed out.
The real moral issue is the truth. Australia’s borrow and spend economic model is exhausted. Budget strains are a symptom of failing mining income. That the Budget can’t be fixed is a symptom of private sector over-indebtedness and its reliance on public borrowing for giveaways, as well as guarantees to borrow itself from offshore. The only way out is a massive program of reform that makes Turnbull’s supposed ‘vision’ appear as shriveled and drooping as his mendacious visage.
That’s what happens when you betray everything you stand for in front of an audience of 24 million.
