What is Malcolm Turnbull up to?

An alternative title could have been ‘What is the Coalition up to?’ but it seems as if opposing the Government’s  economic stimulus package is Turnbull’s initiative, possibly urged on by the young turks in the party room who want to take the fight up to Kevin Rudd.  This is understandable as it has looked as if the Coalition has too often rolled over in front of the Rudd steamroller.  But why pick the economic stimulus package against which to flex his muscles?  A coincidence or a carefully crafted action?  He is said to have had two-thirds of the party room behind him, but that means one third were not, amongst them, as we understand it, Nick Minchin and Fran Bailey in the most marginal seat in Australia.  With that level of non-support, Turnbull would need everything to go according to plan.

He acknowledged from the outset that he would take a ‘hit in the polls’; he knew his move would likely be unpopular with the electorate.  His insistence that he did it ‘because it was right’ strains credulity.  If it is right it would be so on ideological or economic grounds, that stimulatory handouts are not effective or not as effective as other measures, such as tax cuts.  The convoluted arguments used to make this case look unconvincing, and would be ignored by most of the electorate.  As there is little prior experience, data is sparse.  What little evidence exists comes from the December stimulus package, which according to some measures has been successful.  Surveys suggest that a significant part of the December package was spent, and the boost in retail sales is evidence of this.  Arguments that revolve around whether it is spent or saved are of doubtful validity, because money saved now to pay off debt will likely loosen up money that can be spent later.

The argument that the package is too expensive and would plunge the country into long-lasting debt lost much of its potency when it was pointed out, and not contested by Turnbull on Channel 10’s Meet the Press on Sunday, that his package would cost $180 billion over the coming years, as against Rudd’s $200 billion, not a massive difference in Federal budgetary terms.

So was the reason for Turnbull's strategy other than ideological?  Was his leadership wobbly in view of continuing poor polls?  Was the end-of-year schemozzle seen as a sign of flawed leadership and lack of party discipline?  Is Peter Costello’s rousing from sleep a sign of resurgent leadership ambitions, or a response to Rudd’s demonization of neo-liberalism and a consequent desire to preserve the Howard/Costello economic legacy?  Are the young turks getting restless, tiring of the irrelevance of opposition?  Certainly Turnbull himself hates irrelevance.

Turnbull was wise to predict a ‘hit in the polls’, because that has been the outcome.  Maybe he hoped it would not be as bad as he publically predicted and he could then claim public support for his position.  More significant than the widening of the 2PP gap from 8 to 16 in the most recent Newspoll, is the narrowing of Turnbull’s satisfaction/dissatisfaction gap from 14 to 6, largely due to almost a quarter of the previously ‘uncommitted’ now recording ‘dissatisfied’.  Essential Research figures are worse still.  They shows the gap changing from a positive 9 to a negative 11, a turnaround of 20 (41/30 to 32/43).  There is also a widening of the preferred PM gap from 38 to 42 points (60/22 to 62/20) in Newspoll.  Essential Research gives a similar result (60/20).  So this ‘hit’ is more of a hit on Turnbull than on his party, although that has suffered too.  How long will this hit need to persist to bring on murmurings about his suitability as leader?  He is not in a much better position poll-wise than Brendan Nelson when he was ditched.  The fact that suitable alternative leaders are not in abundance may save him temporarily.  But, as Possum points out on Pollytics, once a leader ‘tanks’ personally in the polls, it’s hard to recover no matter what the 2PP figure is.

Since taking his stand, insisting that the Coalition would vote against the package in the House and the Senate, thereby having effectively dealt the Coalition out of the action, the Government has been productively negotiating with the Greens and Independents, and laying the blame for the non-passage of the package with all its goodies at the feet of the Coalition.  Turnbull’s aversion to irrelevance had him lamenting that the Government was negotiating with the cross benches but not the Coalition, and calling on Rudd to negotiate with him.  What did he expect after dealing the Coalition out?

Yesterday in Crikey Bernard Keane reported that Turnbull had told the Coalition joint party room that while he was happy to take a short-term political hit, he was willing to negotiate with the Government to pass the package.  If that’s the case, it will look like a major back flip after so publically refusing to pass the package, and likely to further diminish him in the eyes of the electorate and his party room.  It is unlikely that Rudd would be interested in allowing Turnbull a slice of the action if he can get the package through, with agreeable amendments, with the support of the Greens and Independents.  Rudd would know that to let Turnbull have a say, would have him taking credit for having ‘rescued’ or improved the package.  Despite Turnbull’s stated willingness to negotiate, by yesterday evening the minority position of the Coalition in the Senate was to oppose all elements of the package.  The rationale underpinning the strategy Turnbull and the Coalition are employing remains a mystery.

So let’s see what happens over the rest of the week.  It might give us some idea what Turnbull’s really up to, provided there is a clever master plan at all.

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janice

11/02/2009I've come to the conclusion that Truffles has a fragmented brain that defies logic. He is impatient to achieve his dream of grasping the holy grail of power and sees himself strutting the world stage, dropping pearls of wisdom as he goes about lapping up the adoration of a nation of admiring subjects - in other words, a frustrated king without a kingdom. He seeks to justify his stand to block the stimulus package by his address to the nation and public interviews by saying that his decision to block the package will be unpopular but it is the right thing to do. The 'right thing to do' not because he has the nation's interest at heart, but because Labor will never ever be able to cope with repaying such a debt and, far worse than that, Labor has the absolute temerity to come up with a plan, announce it to the people and put it to Parliament, without taking the advice of Malcolm Turnbull who is more knowledgeable and has more economic sense than any of the advisors the Rudd Government has consulted. Why pick the stimulus package? Well, obviously Truffles took a leaf out of Howard's book and decided that the use of a fear card may work - the 'debt' fear card. $200B debt, he emphasised over and over - $9 grand for each man, woman and child in the country. Kerry O'Brien took him to task over this by putting it to Truffles that $115b of this was the shortfall in tax revenue and the response was 'Kerry, Kerry, Kerry....' and a lot of waffling about tax cuts. Kerry pointed out that tax cuts were in the pipeline for July so did Truffles want more? No, Truffles just wanted the tax cuts brought forward to January 2009. Kerry said January had been and gone. Truffles said the tax cuts should have been brought forward as he had advised the government at the time of the first stimulus package. And so it went on. The next thing Truffles gave his 'Address to the Nation' and used his trump card that although his decision would be unpopular it was the right thing to do.

Monica

11/02/2009Yep, concur with Janice. Turnbull and the LNP strike me as being utterly chaotic and what Possum has described as torn between their two power bases. Though I also think Turnbull's overweening pride and ego are also a part of the mix of the direction they have taken with opposing the stimulus package. I watch him on the TV and he just about quivers when he's talking about how the PM should "sit down with him" and negotiate things. Rudd threw him a lifeline today in relation to the response to the bushfires here in Victoria, and he was into it, in a somewhat cringe inducing manner. He just exudes "I want to be PM, and while waiting, co-PM". Ewww. Has the same effect on me as nails on an old fashioned chalk board.

janice

12/02/2009Ross Gittens writes that Truffles' opposition to the stimulus is 'humbug and politically motivated'. In his article he says: "He accepts there's nothing sensible the Government can do to stop the downturn pushing the Budget into deficit and he accepts the need for stimulus, which will add to the deficit. He claims the Government intends to borrow $200 billion, which is wilfully misleading, and then admits he would borrow only $22 billion to $27 billion less. Then he cries crocodile tears about "mortgaging the future of our children and grandchildren" in a gross exaggeration of how long it will take to repay debt while trying to play on the public's naive instinct that governments shouldn't have debts. He's trying to reinforce the Peter Costello-inculcated fiction that Labor is the party that gets the nation into debt and the Liberals pay it back and restore the Budget to its God-ordered balance. This conveniently overlooks that Paul Keating inherited a recession-swollen Budget deficit from John Howard in 1983, which it took him five years to turn into an annual surplus." The Greens, Xenophon and Fielding appear not to understand the reason for this package and are treating it as a means to push their own narrow agendas. Of course the nation needs to do the things these Senator's advocate but it is irresponsible to delay the legislation before them that is designed to have far-reaching stimulatory effects on the economy, and at the same time give the nation the benefits that come from building infrastructure. Sometimes I wonder how it is that voters manage to elect blinkered people who cannot, or will not, see the wood for the trees. I do believe Bob Brown and his party will act responsibly but I have no such faith in the other two.

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12/02/2009Thank you janice and Monica for your thoughtful comments and helpful references. The performance of the Coalition, the Greens and the Independents today will be a measure of their appreciation of the seriousness of the economic situation we face. The Coalition seems not to be as concerned as the Government, the Treasury and the Reserve Bank about the gravity and the urgency of Australia’s position. Shadow Treasurer Julie Bishop even suggested a ‘wait and see’ approach. The Greens do and have taken a sensible approach, and as at midday today will vote for an amendment to accommodate their suggestions. Senator Fielding looks as if he is being accommodated, but Senator Xenophon is playing a tough game trying to get more for the Murray-Darling. If he is not satisfied, will he be prepared to vote against the whole package, and scuttle the Government’s efforts to ameliorate the effects of the economic downturn, and particularly the predicted job losses. It’s dangerous brinkmanship. Even more apprehensive than the Government about the outcome of the vote tonight will be the Opposition. If the package is rejected, even if by only one vote, the full force of the Government’s condemnation will be directed at the Opposition. The dissenter will cop it, but not as much as Malcolm Turnbull, who will be painted as the spoiler, the destroyer of Australian jobs. So why did he go down this uncompromising track at all? His economic arguments are that handouts will be ineffective and that tax cuts would be better, and that the country can’t afford the debt. The latter has been largely debunked, and the tax versus handout argument is unresolved. An article in today’s [i]Australian[/i] by David Uren [i]Cash handouts 'likely to be spent, not saved'[/i] quotes substantial studies in the US to support that view. http://www.theaustralian.news.com.au/story/0,25197,25032715-5013404,00.html Today, Peter Martin’s blog piece [i]Reality Check Tax cuts are more effective?[/i] adds to that debate. http://petermartin.blogspot.com/2009/02/reality-check-tax-cuts-are-more.html So even the Coalition’s economic arguments are on shaky ground, surely not solid enough to engage in such a negative stance, especially at a time when its credentials in economic management are declining. Today [i]The Piping Shrike[/i], in a piece titled [i]Hardball[/i], http://www.pipingshrike.com/ says: [quote]“The coalition is finding the hard way that the prowess in economic management that they have been hanging onto is valueless. If the coalition’s opposition to the stimulus meant it took a hit in popularity, at least it was supposed to salvage their credentials in economic management. The latest Newspoll shows that for the first time since 1990, when Labor’s reform program ran its course, the coalition has now lost its precious lead in economic management.”[/quote] Even Dennis Shanahan in an article today in [i]The Australian[/i] [i]Coalition fades in its fiscal standing[/i] http://www.theaustralian.news.com.au/story/0,25197,25042610-2702,00.html admits this when he says [quote]“Confidence in the Coalition's ability to handle the economy has slipped to its lowest level since Andrew Peacock was Liberal leader, as the global recession keeps economic management as the public's top priority. Labor has drawn level with the Coalition as an economic manager for the first time in Newspoll surveys since 1990.”[/quote] In the face of all this evidence, Malcolm Turnbull’s stance is even more difficult to discern. Ross Gittins tried in a piece yesterday in the [i]SMH[/i] titled [i]With best intent, politics intrudes[/i], http://business.smh.com.au/business/with-best-intent-politics-intrudes-20090210-83fi.html?page=-1 where amongst other comments reported by you, janice, he says [quote]"Malcolm Turnbull's opposition to the $42 billion package is humbug."[/quote] and later [quote]“But whatever his professed objections, Turnbull is desperately hoping the package will be passed by the minor parties in the Senate (who are busy playing their own attention-seeking games). He knows that, were he to succeed in blocking the package, he'd incur the wrath of voters hanging out for their bonuses, as well as put himself in a position where Rudd could shift to him the blame for every bad economic development from now on, which may explain why he seemed to be wilting yesterday. So why's he doing it? Because, after feeling constrained to avoid resisting Labor's changes to Work Choices and its climate change measures, his troops are desperate to start opposing things. Bipartisanship advantages governments and disadvantages oppositions. Opposing the package got Turnbull back into the media spotlight. But he's also positioning himself for the next election. He wants to be able to say, ‘told you it wouldn't work - all we've got to show for it is all that terrible debt’. This, of course, is the big political risk for Rudd. The package is likely to work; it will, to some extent, make the downturn less severe than it would have been. But that success will be unobservable and the package is unlikely to prevent us falling into recession, with rapidly increasing unemployment. So it will be easy for people to imagine the package didn't work. And because Rudd is firing his big guns before most of the bad news has arrived, leaving him with less ammunition to fire closer to the election, this will compound the perception of failure.”[/quote] That’s as good an argument as I’ve read. If that’s close to the truth, it’s an extremely high stakes game.

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13/02/2009You may wish to read Bernard Keane's assessment of Malcolm Turnbull's and the Opposition's stand on the economic stimulus package in his article today in [quote]Crikey[/quote] titled [quote]The irrelevancy of the Opposition[/quote]. It begins: [quote]"It’s been a long while since an Opposition looked as irrelevant and out of touch as this mob. It’s hugely disappointing for those of us who thought Malcolm Turnbull represented a chance to secure the few good things from the Howard years and couple them with compassion, smart conservative policy and politics and an intelligence all-too-rarely seen in Australian politics. Not to be. Instead the Coalition, despite supporting the idea of a stimulus package with a strong emphasis on infrastructure, has dealt itself out of the economic debate and straight into Kevin Rudd’s caricature of them as mindless ideologues. In comparison, the Greens, Steve Fielding and even stuntmaster Nick Xenophon look the height of rationality. The Coalition is now offside with its own business constituency, with voters and with nearly every economist on the planet."[/quote] To read the rest of this piece, go to http://www.crikey.com.au/Politics/20090213-The-irrelevancy-of-the-Opposition.html
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