Government and governance | Australia

11 October 2015

The optimism and hope the new Turnbull Government wants to give the electorate must be achieved by policy outcomes, John Hewson writes.

The new Turnbull Government is attempting to move the political/policy debate to ‘Hope’ rather than ‘Nope’. It is seeking to focus on possibilities rather than problems. It is seeking to boost the confidence of business and consumers – the broad electorate.

However, it won’t be able to sustain this if it is not prepared to begin with a blunt, objective and realistic assessment of where we sit as an economy, and of the magnitude and urgency of some of our challenges.

To have any hope of getting the electorate on board with its possible policy solutions, it must first get them to recognise and accept these challenges, against which the Government will subsequently need to spell out the policy options, and then eventually specify and advocate for its preferred policy response.

This is an essential to stimulating public debate with a view to building stakeholder and electorate support for policy changes and responses.

Yet, in these very early days of the Turnbull Government we are not seeing or hearing such a realistic assessment. Indeed, the new Treasurer, Scott Morrison, is already spinning that we are doing “incredibly well” against the “international headwinds”, claiming that “we don’t have a Budget revenue problem”, while “putting all policy options on the table”.

He is most unwise to attempt to play down the global risks to our economic prospects, especially with China slowing much faster than their authorities are prepared to admit, with key commodity prices still under real downward pressure, with the US about to begin to raise interest rates, and with Europe struggling to avoid a triple-dip recession with deflation. These are all compounded by a host of geo-political tensions in Europe, the Middle East and in our region.

He should be more concerned, not only about the magnitude of these international risks, but also about their unpredictability, with the authorities operating essentially in unchartered waters, with little or no historical experiences on which to draw.

He should also recognise that the Australian economy is only growing at around 2 per cent or less, with rising unemployment. The Budget he inherited could only foreshadow a surplus by the end of this decade by assuming our growth rate rushes back to 3.5 per cent, and that he can keep bracket creep – a tax rip-off!

Yet, there has been no hint as to ‘how’.  As our economy is forced to make a transition from one based on a resources boom, to whatever, exactly which sectors/industries/businesses are going to accelerate our growth? Where will the essential investment and jobs come from?

He also needs to recognise that genuine reform, in most policy areas, stalled nearly a decade ago, leaving problems to drift, and challenges to grow, such that the need for broad-based reform is now not only significant, but urgent.

There is little further scope for ad hocery, short-term fixes, tinkering at the edges, patches and band-aids. Reform needs to be holistic and integrated across policy areas–big, bold policy packages.

In politics spin only works for some time. Ultimately, problems and challenges soon become crises that, more often than not, can bring down governments.

For example, it is very difficult for governments to spin away a recession, or some other overt policy failure.

It is most unwise to begin as a new government by pretending “how well we are doing” risking an inevitable blind-side hit as the crises unfold, and the misrepresentations and false expectations are exposed.

The optimism and hope, so keenly sought by the new Turnbull Government, must be driven by, and achieved by, policy outcomes, not hollow, indefensible, rhetoric-false hope.

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