To Yield And Not To Strive

To Yield And Not To Strive

Prime Minister Malcolm Turnbull promised ‘a thoroughly Liberal Government’ … but instead it was a thorough disappointment, argues Simon Breheny.

In the years and decades to come, it is hard to know precisely what Prime Minister Malcolm Turnbull will be known for. While supporters and detractors alike are able to point to legislation passed and policies implemented during the Turnbull era, the difficulty is piecing it all together into a broader vision; a ‘narrative’, as the pundits like to say. And while that term has become a political trope in recent years, its underlying meaning is more important than ever—it’s about stories.

For the Coalition government led by Turnbull for just under three years, the story is hazy and messy. Both the story of the government itself and the story that the government told the Australian people as a way of explaining the decisions it made. This lack of clarity goes some way to explaining why the Turnbull government ended in such disarray.

It wasn’t always like this. Late in the evening on 14 September 2015, as the new leader of the Liberal Party, Malcolm Turnbull gave a press conference alongside Julie Bishop, the re-elected deputy leader of the party. In that press conference he outlined his vision for the government he would lead:

This will be a thoroughly Liberal Government. It will be a thoroughly Liberal Government committed to freedom, the individual and the market.

Three weeks shy of his third anniversary as prime minister, Turnbull lost the leadership of the Liberal Party and, consequently, the prime ministership. As Turnbull’s tenure has drawn to a close it’s an appropriate time to assess the record of the 29th prime minister of Australia, and where it went so wrong.

WHILE TURNBULL MADE SOME WORTHWHILE CONTRIBUTIONS, IT MUST BE SAID HE FAILED TO LIVE UP TO HIS OWN STANDARDS

As with any assessment of a democratic government, the challenge is that they are rarely all good or all bad. Certainly that’s true of the Turnbull government. Even more challenging, perhaps, is determining the standard against which a political leader ought to be assessed. There are a number of ways in which to assess the success or failure of the Turnbull government. An obvious temptation is to pivot to the yardstick of polling. Polls, and the endless dissection of what they could mean, are an inevitable occupational hazard for politicians. But Turnbull’s weaponisation of polls—using them to argue Tony Abbott had failed as prime minister, then suffering the humiliation of failing that same standard—was one of the biggest political strategic errors of his prime ministership.

A far more useful benchmark against which to evaluate the Turnbull government—also selfmade—was the early proclamation about the philosophical direction the government Turnbull would lead: ‘… committed to freedom, the individual and the market.’

To put it mildly, it’s difficult to make the case that the Turnbull government was characterised by these ideas. While a number of important policies clearly represent a classical liberal agenda, evidence for the government having been committed to this set of ideas is absent.

On the positive side of the ledger, Turnbull should be credited for a number of policies.

FREEDOM OF SPEECH

Under Turnbull’s prime ministership a government finally introduced legislation that sought to amend section 18C of the Racial Discrimination Act 1975. While Abbott and Turnbull both promised to amend section 18C, the Turnbull government actually introduced a bill, pushed it through the senate and achieved minor changes to the law. While there’s still a long way to go on freedom of speech, this was more than any government had achieved since parliament passed section 18C in 1995.

FEDERALISM AND THE CONSTITUTION

On 30 March 2016, the prime minister announced a modest proposal to return a portion of personal income tax power back to the states. Turnbull proposed ‘that we, the Federal Government, will reduce our income tax by an agreed percentage and allow state governments to levy an income tax equal to that amount that we have withdrawn from.’ This is one of the best policies of the Turnbull government because it went to the heart of the federation. Sadly, just days later, the policy was abandoned.

CURRENT AND FUTURE LIBERAL LEADERS MUST REDISCOVER THE PRINCIPLES ON WHICH THE LIBERAL PARTY WAS FOUNDED

In October last year, the prime minister affirmed an idea that rightly lies at the heart of the Australian Constitution—that all Australians are equal. The debate on constitutional recognition of Aboriginal and Torres Strait Islanders had raged for years, and Turnbull’s rejection of the racially divisive ‘voice to parliament’ proposal was an important and uplifting enunciation of this bedrock principle.

MEDIA REGULATION

The Turnbull government also oversaw perhaps the most significant liberalisation of media regulation, paving the way for the recently announced Nine-Fairfax merger. While enormous credit should be given to Senator the Hon Mitch Fifield for designing the policy and ushering the legislation through the parliament, Turnbull helped to lay the groundwork when he was communications minister and as prime minister empowered Fifield to achieve an historic change to outdated media laws.

TAX REFORM

The Turnbull government also initiated both personal and company tax reform. The government was successful in passing legislation that slows the rate at which overall personal income tax increases over time. However, its plan to slightly reduce the corporate tax from 30 per cent to 25 per cent has only been partially achieved. Research by the IPA’s Matthew Lesh shows more than 3.55 million Australian workers miss out on the potential benefits of working for a company with a reduced corporate tax rate, due to the reduction only applying to companies with annual revenue under $50 million.

While these policies have helped to move the country in the right direction, no assessment is complete without weighing the weaknesses against the strengths.

ENERGY

The Turnbull government’s energy policy was the stated catalyst for the leadership crisis which eventually led to Turnbull’s demise. It is telling that Turnbull has lost the leadership of the Liberal Party twice in under a decade—each time over his commitment to meet international obligations to reduce Australia’s carbon emissions. The Turnbull government was wedded to the idea that it’s the task of energy policy to reduce carbon emissions, the result of which was that Coalition energy policy was hamstrung and couldn’t achieve the things Australians actually care about when it comes to electricity: reliability and cost.

The government’s heavy-handed intervention in the gas market was also an approach that clearly cut across the free market principles on which the Liberal Party was founded.

SUPERANNUATION AND THE FINANCIAL SECTOR

The Turnbull government was responsible for retrospective changes to superannuation which hit hard-working, self-funded retirees hard. The government’s war on the banks gave rise to some of this government’s most illiberal policies. The bank tax, the banking executive accountability regime, the bank royal commission and the recently announced ASIC ‘corporate cops’ all added further red tape to an extremely heavily regulated sector. Each of these decisions also played into the hands of the Labor Party, which has long-argued, misguidedly, that problems identified in the banking industry can only be solved through greater control by the state.

SIZE OF GOVERNMENT

On top of all of this, Turnbull failed to rein in public spending and decrease the size of government. Over the three budgets handed down by the Turnbull government, tax as a percentage of GDP increased from 21.6 per cent to 23.1 per cent; spending as a percentage of GDP is up from 25 to 25.4 per cent; and gross public debt as a percentage of GDP is up from 28.5 to 29.5 per cent.

It is also worth mentioning the Turnbull government critically suffered from a lack of ambition. Every one of the Turnbull government’s more positive policies not only ended up being a much weaker version of the ideal policy, but in most cases also started out that way. The Turnbull government didn’t appear to have ambitious goals for the future of the country. This meant the government never took advantage of the political spectrum being dynamic rather than static. Every time a government argues for significant policy change it moves the dial of political possibility. Stating a strong position and arguing the case from first principles is often the most effective way to achieve a political outcome— even a negotiated one.

In the end, while Turnbull made some worthwhile contributions, it must be said he failed to live up to his own standards. This has not been a ‘thoroughly liberal government’. This isn’t only an uncomfortable truth regarding the Turnbull legacy, it’s a problem for the future of the Liberal Party.

The IPA’s John Roskam, in a recent opinion piece in the Australian Financial Review, argued the Liberal Party is on the verge of an existential crisis:

Since John Howard lost the prime ministership in 2007, the Liberals have avoided asking themselves whether they want to join with Labor in leftward drift of politics and policy in this country because they actually believe that is the direction in which Australia should be heading, or because they feel there’s no viable alternative to bigger government and higher taxes.

Precisely this kind of soul searching must take place within the post-Turnbull Liberal Party.

To avoid the same fate as Turnbull, and to save the Liberal Party from political oblivion, current and future Liberal leaders must rediscover the principles on which the Liberal Party was founded, and bring together an ambitious team which will relentlessly pursue an agenda that places individuals, families, communities, and civil society at the centre. Such a leader could do worse than to lead a government committed to freedom, the individual and the market.

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