Election 2016: Malcolm Turnbull is the only leader with a genuine

growth agenda
afr.com/opinion/editorials/election-2016-malcolm-turnbull-is-the-only-leader-with-a-genuine-growth-agenda-20160629-gpuoln

Jun 30 2016 at 12:00 AM

Prime Minister Malcolm Turnbull deserves another term to implement a comprehensive program of
economic reform Andrew Meares
by The Australian Financial Review
Nine months ago, Malcolm Turnbull wrestled the prime ministership from an unpopular Tony Abbott to produce
Australia's fifth prime minister in five years. Mr Abbott's demise stemmed from the political disaster of his 2014
budget, which spelt the failure of a Coalition government to repair the fiscal mess and hence national vulnerability
left by Labor in the wake of Australia's biggest resources boom. In justifying the change in September, Mr Turnbull
said "it is clear enough that the government has not been successful in providing the economic leadership that we
need". The new Coalition prime minister surfed a wave of popularity as he recast the economic debate in terms of
innovation and opportunity. But Mr Turnbull and his new Treasurer Scott Morrison did not challenge Australians to
accept the urgency of budget repair. And the Prime Minister floated and then punctured proposals for the sort of
genuine tax reform needed to sharpen the incentives to work, save and invest. By February, many in business
echoed the question asked by The Australian Financial Review: "What is the point of Malcolm Turnbull?"
Yet Mr Turnbull is going to the people on Saturday as the only political leader with both a genuine economic growth
agenda and a commitment to reduce the burden of government rather increase the disincentives of higher taxation.
The Coalition's proposal to phase in a cut to the corporate tax rate from 30 per cent to 25 per cent during a decade
would boost economic growth by attracting foreign capital and know-how and, according to the consensus of
economists, fatten the pay packets of the workers Labor claims to represent. It is Bill Shorten's class-based
dismissal of this singular economic growth policy that defines Labor's doleful populism. In an act of fiscal
recklessness, by its own figuring Labor would deliberately add to the deficit during the next four years and threaten

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Australia's AAA credit rating. And Mr Shorten's promise of big surpluses in a decade rest on what Labor admits
would be the highest tax take as a share of income in the nation's history.
Worse still, Mr Shorten's resort to crass populism and the outdated politics of class comes from a once-reforming
centre-left party that has refused to free itself from the trade union and factional control that so defined the RuddGillard years. Mr Shorten's party is financed by the habitually law-breaking Construction Forestry Mining and
Electrical Union. Just before the July 2 election was called, the Coalition managed to defeat a Transport Workers
Union attempt to impose union-backed industrial award control on independent truckies. In Mr Shorten's home state
of Victoria, a left-wing Labor premier brazenly has put volunteer firefighters under the yoke of a militant firefighters
union and an ex-Communist industrial umpire. At the same time, Labor remains torn between the trade union control
of its parliamentary machine and the culturally left-progressive cast of its branches. For all Mr Shorten's clearly
effective campaigning, Labor remains what the Financial Review described before and after the 2013 election. It
remains structurally unfit to govern. And, for this newspaper, there is no alternative but to support Mr Turnbull and
the Coalition to be returned at Saturday's election.
More than this, electing a Labor government committed to Mr Shorten's agenda would be a dangerous choice given
Australia's circumstances and the surrounding global environment. From the early 1990s recession, Australia
enjoyed an unprecedented two decades of uninterrupted economic growth and rising prosperity. Per-capita national
income increased by an impressive two-thirds, driven first by the productivity gains unleashed by the aspirational
reforms of Hawke-Keating Labor governments and then by the fantastic luck of Australia's China boom. But that
boom peaked in the second half of 2011 as the price of Australia's biggest export, iron ore, hit $US180 a tonne. As
the iron price collapsed to $US50 or so, national income has been squeezed. On one measure, national income per
head has fallen 6 per cent since 2012. It is a more recent version of the income squeeze imposed on other Western
nations since the 2008 global financial crisis and the broader competitive challenge from China and other emergingmarket producers. Yet, unlike many other rich nations, there has been no significant rise in material inequality in
Australia during the past few decades. Reflecting Australia's commodity export base, the China boom benefited just
about everyone, including through the stronger currency, which increased the global purchasing purchasing power of
ordinary workers. Nor have there been genuine banking scandals or crises of the scale of Britain, Europe or the US.
And nor has there been a European-style immigration crisis or a US-style immigration backlash, thanks to Mr
Abbott's admittedly bracing restoration of the border control abandoned by Mr Shorten's party in its last period in
office.

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David Rowe
Australia's fundamental challenge now is to avoid the political populism sweeping many other rich nations, just as it
is to avoid the extreme monetary policy experiments employed by leading northern hemisphere central banks.
Instead, Australia needs to rekindle its reformist recent past in transitioning from the resources boom to exploit the
new phase of Chinese economic development, the upside of digital disruption and the reshaping of global supply
chains. Rather than retreat into the politics of redistribution, capital-importing Australia needs to sharpen its incentive
structures, recover its productivity growth and expand the nation's income pie.
Yet Mr Shorten's populist pitch echoes some of the global political phenomenon represented by Brexit and Donald
Trump by exciting a squabble over shares of a declining income pie. Abetted by South Australian populist Nick
Xenophon, Labor's new protectionism pressured the Coalition away from Mr Abbott's free-trade focus to turn
defence policy into an expensive make-work scheme. Rather than promote enterprise, Mr Shorten has demonised
company tax cuts that would grow the economy and benefit workers as Liberal gifts to the big banks he wants to put
in the dock of a pointless royal commission. Rather than accept that Rudd-Gillard Labor baked in permanent budget
spending promises that proved unaffordable as the temporary revenue boom reversed, Mr Shorten has sought to

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inflate government spending even more, financed by ever-higher taxes. Even technological measures to rein in fastgrowing healthcare spending have been used to mount hysterical scare campaigns about Mr Turnbull's non-existent
plans to privatise Medicare. Rather than the aspiration of the Hawke-Keating years, Mr Shorten has offered class
rhetoric dressed up as "fairness". Yet, after so loudly proclaiming the 2014 budget's health spending restraint to be
evidence of Mr Abbott's unfair broken promises, he has now quietly pocketed the cuts as part of Labor's
pantomime of fiscal responsibility.
In his nine months leading the nation, Mr Turnbull has been too timid in confronting the challenges of securing
Australia's modern prosperity. But, unlike Labor, he at least genuinely accepts there is a problem. If he wins office
and legitimacy in his own right on Saturday, he will have a clearer run at establishing the economic agenda he
promised when replacing Mr Abbott in September. He is not, in policy terms, the damaged goods that Mr Abbott had
become, unable to explain or persuade. Mr Turnbull remains a popular figurehead who can still transmit the
messages the country needs to hear. He and the Coalition deserve the backing of the Financial Review and the
Australian people.
Australian federal election 2016: Live coverage, polls and results

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