Australia's Turnbull Is Playing the Election Long Game

Australian Of The Year Awards 2016

Australian Prime Minister Malcolm Turnbull.

Photographer: Martin Ollman/Getty Images
  • Coalition to flesh out economic agenda before going to polls
  • Former investment banker has yet to spell out economic vision

Australian Prime Minister Malcolm Turnbull has two options as he seeks re-election this year -- the short game, or the long. He’s chosen the long.

Instead of capitalizing on his personal popularity among Australian voters and calling an early election, his Liberal-National coalition government is taking time to craft an economic agenda including overhauling the tax system -- and isn’t planning to go to the polls before the third quarter.

“We have to lay out our economic reform program, we have to lay out all of our policies,” Turnbull said in a radio interview Friday. “We have to present them, explain them, and then we have to take them to the people. That takes some time.”

While Turnbull has catapulted the government to an election-winning lead in opinion polls since taking the helm in September, voters are waiting for him to flesh out an economic vision that he said predecessor Tony Abbott was lacking when he ousted him as leader in a party-room vote. A key policy he’s yet to deliver is taxation reform -- which the government says is needed to boost growth that’s run below average for six of the past seven years.

“By going full term, Turnbull will avoid any accusation that he’s cynically using his popularity to be re-elected without forming proper policy,” said Paul Williams, a political analyst at Griffith University. “The feeling in the government will be that it’s got enough of a cushion in the opinion polls to weather any backlash against its tax reform plans.”

Tax Dilemma

Turnbull, 61, faces a balancing act on tax. He’s said he doesn’t want to increase the overall burden on corporate and personal taxpayers at a time the economy is transitioning out of a once-in-a-century mining boom. Yet the government is struggling to rein in a budget deficit amid a plunge in commodity prices, and is exploring a greater use of indirect taxation.

The former investment banker said Friday the government is actively considering changes to the 10 percent Goods and Services Tax, and has yet to decide whether proposed reforms will be announced in the May budget.

“We’re looking at how we can make the tax system more efficient, that is to say less of a brake on growth so that the tax system will provide more incentives for work and investment,” Turnbull said. “But we don’t believe that taxes as a percentage of GDP should creep up any higher because they’re already very high now.”

Labor Warning

Waiting until later in the year will potentially give the opposition Labor party a platform from which it can attack the government on tax. With the government declining to rule out an increase in the GST to 15 percent, opposition leader Bill Shorten has said Labor will fight any changes to the tax that would discriminate against poorer Australians.

Another probable election issue is workplace relations. When parliament resumes next week, the government will re-introduce legislation to bring back the Australian Building and Construction Commission, an industry watchdog, and crack down on what it calls “unlawful industrial action” by unions, many of which support Labor.

Should the bill again be rejected by the Senate, it would provide Turnbull with a trigger to call a double-dissolution election -- when both houses of parliament are dissolved due to legislative deadlock.

Political Turmoil

Such elections come with complications. Voters generally don’t like them as they cut short the typical three-year electoral cycle, and Australia has just seen a period of political turmoil with six prime ministers in eight years.

Under a full election of both houses there could be a rise in the number of independent lawmakers or those from smaller parties in the Senate with whom the government has to negotiate to pass laws. That grouping could expand from eight now to a potentially unmanageable number, according to Senator David Leyonhjelm, the sole lawmaker representing the Liberal Democratic Party.

“Malcolm Turnbull and I have discussed double-dissolution potential and he is very well aware that things wouldn’t get any better” in Senate negotiations, Leyonhjelm said in an interview Thursday. An early election was “not impossible but highly, highly unlikely,” he said.

Pressure on Turnbull to pick the perfect time has been relieved by his party’s performance in opinion polls. In a Newspoll published Dec. 7, his coalition led Labor 53 percent to 47 percent on a two-party preferred basis, meaning it would easily be re-elected. When asked who would make the better prime minister, 60 percent chose Turnbull over Shorten’s 14 percent.

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