Turnbull and the mystery of economic management

Morrison-Turnbull-and-Cormann

This week was all about the magical number of 30 – 30 consecutive losing Newspolls for the Prime Minister, Malcolm Turnbull, or 111, if you count all the main pollsters since August 2016 – Newspoll, Ipsos, ReachTEL and Roy Morgan.

Instead of focusing on those eight magical words of “we have lost 30 Newspolls in a row”, Turnbull turned to the two other reasons why he challenged the previous Prime Minister, Tony Abbott: “restore traditional Cabinet government” and provide the “economic leadership that we need”, with the implication that this leadership had been duly provided.

 

Not many people in the electorate would be able to tell what ‘restoration of traditional Cabinet government’ actually means, and I’d suggest that not too many members of parliament could effectively articulate what it means either, but it’s safe to assume that this isn’t exactly going to be a vote changer. Either way, how can anyone outside of Cabinet assess whether this process, whatever it is, has been achieved or not?

The final economic point was the one that Turnbull heavily focused upon this week but has he provided the economic leadership Australia needs? And, if he has, why is the Liberal–National Party still languishing in the polls, with little prospects of change in the foreseeable?

Let’s look at the economic performance under Turnbull and see how well this stacks up.

Firstly, the biggest claim the Government has promoted during 2018 is that during the 2017 calendar year, over 400,000 jobs had been created, “the greatest number on record”. It’s a line that’s been pushed by the Government for the past four months and, if true, that would represent a stunning result and turnaround in employment prospects for many people.

The trouble is, the figure is highly misleading and, statistically, contains asterisks and caveats that would almost fill an entire book. The RMIT ABC Fact Check unit has adjudicated the Government’s claim is “oversimplified” and not entirely correct, as it has been promoted as a raw figure, rather than taking into account seasonal adjustments and overall economic and population growth. It’s a little bit like comparing apples and oranges, or to use statistical parlance, comparing standard deviations with Pythagoreum theory.

The figure, when adjusted for seasonal adjustments and population growth – which is how the figure has been used since 1978 – is not the great achievement the Government is suggesting. There have been several better performing years, and their figure relies on statistical chicanery and the knowledge that few people would ever check the veracity of the claim. The Government also anticipated, correctly, the misleading figure would also be perpetrated many times over before the numbers people in suits could point out the statistical errors in the Government’s ways.

However, politics is the art of stretching the truth and manipulation of data, and very few in the mainstream media have called out the ‘smoke-and-mirrors’ trick that Archimedes would have been proud of. And, in keeping with their role in supporting Malcolm Turnbull and the Liberal–National Party, many in the media has simply regurgitated the figure without providing analysis or context.

National government debt is another area of concern the Government seems be doing very little about, having railed about this as a major issue during the time of the Labor Government in 2007–2013. The national government debt was $380 billion on the day Malcolm Turnbull became Prime Minister, but now is estimated today to sit at $623 billion according to the Australia Debt Clock, an increase of 63 per cent, or an annual rate of 24 per cent. We haven’t heard very much about this massive figure in recent times.

In May 2011, Malcolm Turnbull launched the ‘Debt Truck’ and derided Labor’s national government debt of $315 billion (a figure that wasn’t actually correct at the time). We never heard the end of the debt figure at the time, but the Debt Truck has been safely stored away ever since the Liberal Party returned to office in 2013, and conveniently ignored by the media.

So, that’s the myth of record jobs and debt management put to rest, but surely there must be other economic credentials out there. Otherwise, why would the Liberal–National Party keep spruiking their superior economic management skills?

Again, the problem for Liberal–National Party is there’s nothing really to spruik. Although the Australia has had the best performing economy in the world under all governments since 1991, its recent performance under Turnbull’s leadership has been poor and the growth compared to other economies has slipped from 14th in September 2015, to 22nd. Australia was ranked seventh in world economic growth figures when Labor lost office in 2013 but, since then: 12th in 2014, 17th in 2015, 14th in 2016 and 23rd in 2017.

Other areas of the economy have also underperformed: productivity has dropped; full-time employment has dropped – most of the 403,000 jobs that Turnbull claims to have created in the last calendar year are part-time or casual – and long-term unemployment has increased from 24 per cent of overall unemployment to almost 27 per cent.

And the party committed to low government spending? This is also an illusion the Liberal–National Party keeps labouring under. The highest spending government on record has occurred during Turnbull’s leadership – reaching 26.6 per cent of gross domestic product, a figure that surpasses the previous highest level of 26.1 per cent of GDP, during the Rudd government at the height of the global financial crisis during 2008.

So are the Liberal–National Party the superior economic managers they continuously like to claim? Has Malcolm Turnbull provided the economic leadership Australia needs?

No, the figures don’t support this. There is other published material suggesting the Liberal–National Party is not the superior economic manager it purports to be and, if anything, manages the economy that is unsustainable and detrimental to Australia’s future.

On top of these poor economic performances, is the spectre of diplomatic tensions between Australia and China, surely a situation that could only lead to further economic difficulties in the Australian economy, given China is currently Australia’s largest trading partner and the second largest economy in the world.

Diplomatic relationships with allies and trading partners are delicate arrangements, and require an intense level of behind-the-scenes work for these to be managed effectively. Have the current leadership tensions within the Liberal Party also resulted in neglect of Australia’s most important trading relationship? Foreign Minister, Julie Bishop, has been touted as a leadership contender, and trying to work the party-room numbers in your own favour is a full-time job in itself. Has the energy involved in working on her personal ambitions affected the international trade ambitions for Australia?

There has been some speculation in the media about an October 2018 federal election. A normal election doesn’t need to be held until 18 May 2019 but there’s a logjam of state elections, holidays and political issues that come into play in early 2019, and that might affect Turnbull’s thinking about this date.

Prime Minister’s rarely call an election they are unlikely to win, and in the current polling circumstances – 111 consecutive losing polls going back to August 2016 – it’s hard to see why this Government would go to the polls early. But we can never underestimate Turnbull’s lack of political judgement. The decision to change the rules for Senate election and calling a double-dissolution election for 2 July 2016 are the  prime examples of this, so anything is possible.

However, one factor is very clear. The ugly sight of the two wings of the Liberal Party engaging in age-old ideological enmities has gone on in public for far too long. It’s becoming apparent to the electorate that the Liberal–National Party needs some time in opposition to resolve its leadership, policy and internal management issues, in the same way it voted the Labor Party into Opposition at the 2013 federal election.

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Eddy Jokovich

Eddy Jokovich is a Sydney-based journalist and producer of many books, magazines and handbooks and has worked as a war correspondent, journalist, lecturer in media studies and production.