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Understanding the Turnbull government's winning strategy

By Chris Lewis - posted Tuesday, 12 July 2016


It all sound so easy if only the Coalition did this and that. For example, Andrew Bolt, calls on Turnbull to resign because he "assassinated a Liberal Prime Minister … who'd won an election by a huge margin"; "treated the Liberal base like dirt, smashing it with a huge super tax"; refused "to speak to conservative journalists", "referred to the colonial settlement of Australia as an "invasion" and held "an end-of-Ramadan meal with known Muslim bigots"; and had gone to an "to the election with basically only one policy to sell - a pathetic 10-year promise to cut company tax".

However, from a political analysis point of view, common sense indicates that maintaining widespread electoral support is extremely difficult in this post-global financial crisis (GFC) era. Any suggestion otherwise, especially after the Abbott government reneged on a number of electoral promises with regard to social welfare, is the stuff of fantasy.

While Turnbull was immensely popular with the electorate when he replaced Abbott, and received clear Liberal Party support, the government was always going to struggle to produce an economic and social policy mix that could satisfy both traditional supporters and the public. It certainly was not going to win by listening to Bolt at a time when many Australians were still seeking a more agreeable economic-social policy mix.

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The Coalition faced several electoral realities that no sensible party could ignore, at least one that wanted to stay in government.

There was no way that the Coalition could win by dramatically cutting budgetary spending. In terms of public opinion alone, as indicated by one Essential Report poll (26 Nov. 2013), when asking whether returning to budget surplus was more important than maintaining services and infrastructure investment, just 26 per cent of Coalition voters agreed with 61 per cent preferring the latter.

While most Australians recognise the need to curtail budgetary spending, many were indeed reluctant to easily give up their social welfare services and support measures that could erode business and public confidence. With Social security, health and education spending alone comprising around 58 per cent of Commonwealth government outlays since 2008-09, with that level only supported by debt, Australia is one of many OECD nations with a worsening net government financial liabilities position.

Although the previous reasons promote a view that policy development demands greater bipartisan support, the pluralist nature of Australia's liberal democracy demands political party leadership which can make the greatest appeal. I, for one, still have faith that liberal democratic politics can still produce a sensible economic-social policy mix.

So how does the Coalition make greater policy appeal while supporting substantial economic reform?

The answer is simple; it has to remain pragmatic to achieve change, albeit major taxation and industrial relations reform should be encouraged sooner rather than later.

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First, for those calling for more extensive budget cuts, it is difficult to compare the current situation confronting governments today with past successful governments that produced budget surpluses. While both Labor and Coalition governments promoted lower taxation rates which aided economic growth (1983-2007), both sides of politics also used substantial social welfare spending to offset the impact of economic reform which included the privatisation of considerable public assets and even greater labour market deregulation.

Social security and welfare spending, which had already increased from 20 per cent of Commonwealth outlays in 1972-73 to 26 per cent in 1982-83, rose to 35 per cent by the end of the Keating government before reaching 40 per cent by the Howard government's 2007-8 budget. Of health, with spending around 8 per cent of Commonwealth outlays in 1972-73 and 7 per cent in 1982-83, this increased to 15 per cent by 1995-96 and 18 per cent in 2007-08.

While the following table indicates that a number of Keating budgets stopped the growth of social security and education spending in real terms, it is worth noting that Australia now has a greater reliance on social security given that the number of underemployed as a proportion of the workforce has increased from around 4 per cent during the late 1980s to be 8.5 per cent by 2015.

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About the Author

Chris Lewis has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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All articles by Chris Lewis

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