Big countries, fresh faces and bright futures

What do Justin Trudeau, Malcolm Turnbull, Jeremy Corbyn and even Donald Trump have in common? Quentin Grafton connects the dots.

A big resource-based country, with very close ties to the United States, gets rid of an unpopular, ideologue Prime Minister and replaces him with a telegenic and pragmatic leader. As a result, many look forward to a brighter and liberal future.

Question: is this a) Australia or b) Canada. The answer is both! Australia’s change came as a surprise to many on 14 September when Malcolm Turnbull toppled Tony Abbott in the Liberal party room, and the extent of the win by 43 year-old Justin Trudeau (the son of former Prime Minister Pierre Elliott Trudeau) this week in Canada was predicted by very few. Indeed, Trudeau’s Liberals were not even the official opposition when the election campaign began 11 weeks ago and he, himself, was labelled as ‘not ready’ for the big job. As it turned out, it was the now-former Conservative Prime Minister, Stephen Harper, who was past his ‘expiry date’.

Two new Liberal prime ministers since the start of last month may simply be a coincidence, but perhaps not. While only two data points cannot describe a trend, there is also the extraordinary election of Jeremy Corbyn as the new leader of the British Labour Party; a politician, but also very much an outsider. Even the surprising success so far of Donald Trump and Bernie Sanders in the US in their bids to be nominated by their respective parties for president speaks to a ‘zeitgeist’ in terms of what many voters are looking for, at least in the English-speaking (and also English and French-speaking in Canada) world; ‘fresh faces’ even if some of their ideas are not exactly new.

It seems many voters want fresh faces who can, at the very least, promise a brighter future and do it in a way that is authentic, or at least appears to them to be authentic. A sort of a ‘kinder, gentler’ leader, but also someone who can craft a different path to ‘business as usual’ away from austerity and to what many hope will be a brighter economic future.

Justin Trudeau and Malcolm Turnbull are both freshly-minted PMs and leaders of Liberal parties, but there are important differences. Turnbull, of course, has yet to win an election as PM. Until he does so he will not have the ability to set the party political agenda like Trudeau who, by virtue of stunning majority government, now has the mandate to govern that many politicians would die for.  Trudeau’s Liberals are also left-of-centre and face a right-of-centre official opposition while Turnbull’s Liberals are right-of-centre who face a left-of-centre opposition.  This is important as it is maintaining control of the political centre that allows governments to get elected, and re-elected. To their cost, former PM Tony Abbott in Australia and Stephen Harper in Canada thought they could shift voters to an ideological right of centre, but in the end failed.

Beyond the politics and the ‘warm glow’ afforded charismatic PMs who can communicate effectively with people, both Trudeau and Turnbull face a whole heap of challenges in terms of improving the lot of their respective countries. Australia and Canada currently have low productivity growth, real incomes are barely growing, very high household debt loads, a ‘natural’ rate of unemployment that appears to be rising, and what they are getting for key exports (oil in Canada’s case and iron ore and coal for Australia) has declined as commodities prices have fallen.

So what does all of this mean for Australians, Canadians or anyone else looking for a brighter economic future?

First, the art of better public policy and government, and ultimately better outcomes for people, is all about the narrative and the ability to communicate. This is true whether a leader is from the right or the left. And when most people ‘switch off’ and either no longer believes the message or no longer want to listen, the game is over. This is not about spin but about substance. Voters need answers to: what is the plan, why it matters, and what will it achieve? If it means sacrifices then this needs to be explained in a grown-up way, and be shown to be fair.  ‘Trust me I’m here to help’ will only go far, even for the most charismatic leader.

Second, the political honeymoons of Trudeau and Turnbull are likely to be short lived if they do not deliver, and not just promise, a clear path forward. Both Australia and Canada as open economies face considerable head winds with the gyrations in the global economy, and especially emerging economies, and they need to consider key vulnerabilities (such as very high metropolitan house prices) and do something about them. Tough decisions on budgets (taxes and expenditures) are also required and cannot be postponed indefinitely, plus the dots need to be connected between their aspirations in terms of improving productivity and boosting innovation with complementary changes to the education sector and the tax system. They also need to help rather than hinder their economies to transform themselves following the end of the hard commodities boom.

Finally, despite the diminishing power of national governments as the degrees of freedom to change key policy levers decline with globalisation and trade deals, both Trudeau and Turnbull show that leadership does matter. Who is at the top, and what they are saying and actually do, shapes a nation’s psyche and the ‘animal spirits’ that, in turn, affects national prosperity.