Staying on political course while managing the crises

In a quieter age, Paul Keating mused the summer break was a chance for Australians to get back in touch with the country. “Mercifully free from work and politics, we have time to reflect,” he said 26 years ago on our national day. For some, that down time has led to the conclusion that the world has changed. This summer has provided no respite from politics or tragedy, as drought, bushfires and the spread of coronavirus have quickened the news tempo. Scott Morrison, too, has been on deck for weeks, dealing with natural disasters and the messy sports rorts affair. He has lost some political skin. At the National Press Club on Wednesday, the Prime Minister’s task was to reset the story for the coming year in Canberra, with hopeful messages for voters and rhetorical pushback to reporter-critics of the Coalition’s approach to climate change. All up, Mr Morrison remained constant to the themes that won the election last May, pitching directly to mainstream voters. He’s not changing course; the man is not for turning.

After the tumult of the Rudd-Gillard and Abbott-Turnbull years, the Prime Minister is trying to build a narrative of security, strength and resilience. One of the keys to his win was a narrow but deliverable agenda. Mr Morrison did not unduly raise expectations or promise bold reforms. Nor did he offer disruption to our way of life. Bill Shorten had vowed to remake the economy and society. To our mind, Mr Morrison’s limited policy ambition was a pity, given the challenges we face. But considering the dysfunction in politics of the past decade, internal dynamics in the Coalition and the dodgem-car ride through the Senate for any sensible reform, there is some justification. Political trust is in free fall. To operate with success in this climate, it’s prudent to rein in promises and spare people surprises — think new taxes, big cuts to programs or one-off levies.

Mr Morrison stressed that a growing economy underpinned a sound fiscal position, allowing the government to pay for services such as aged care, disability insurance scheme, health and education. A balanced budget means Canberra can quickly respond to emergencies such as the bushfires and recovery operations. A sustainable budget, he said, meant the nation could invest in climate change adaptation and resilience. In an analogy aimed at the people who decide elections in this country — not the ageing keyboard worriers and fresh-faced insta-pundits of the press gallery clamouring for higher emissions targets and the end of coal — Mr Morrison said he was “taking out insurance for the climate in which we are living in”. He argued it was akin to defence spending, “a wise investment because it keeps Australia’s strategic interests safe and secure”.

So Mr Morrison is holding his ground on climate policy, amid a local and international media campaign that is fanning a crisis narrative. The Prime Minister picked apart the flaws in the Paris Agreement; we can do only so much. He argues developing nations, such as China and India, can continue to increase emissions while Australia is held to higher standards. He noted workers were worried about their jobs being exported overseas for little environmental benefit. A solution had to be global in scope; the rest was noise.

Mr Morrison insists the way forward is to “meet and beat” our international obligations, invest in new technology and use gas as a transition fuel. He lauded the building of new capacity in renewables and rejected out of hand claims the nation had been fudging the numbers on emissions reduction. This is the sensible centre of policy, where most Australians live. This is not climate denialism. In the government’s judgment, this strategy will carry the day. Yet the challenge is to deliver an energy policy business can bank on and invest in. Climate and energy policy are joined at the hip, inform each other, often fight each other. But they are not the same thing. The sweet spot for lower emissions at least cost, reduced prices for business and consumers, and power reliability remains elusive.

At a broader level, Mr Morrison’s instinct is to not panic. After all, the economic foundations are solid. In the face of Brexit, market volatility, US-China trade war, coronavirus and weak growth, the Coalition is holding its nerve on fresh stimulus measures. Tax relief, interest-rate cuts and expedited infrastructure spending are washing through the economy; but consumers are wary and investment is in a hole. At sub-2 per cent GDP growth the economy is drifting and underdone. Josh Frydenberg’s task is more than talk therapy, although that has its place.

The coming budget is likely to stay the course: fiscal balance, tax cuts, regulatory moves, skills programs and big capital works. A tax break for new investment is expected, but it’s unlikely there will be game-changing reforms. Again, we fear a missed opportunity for raising our GDP speed limit. What worked last year may not be right for this year. We wonder what the Prime Minister’s plan B will be if our export markets tank, property markets stall, commodity prices dive and the jobless rate begins to tick up. Right now, Mr Morrison is betting the temper of the times and voter tolerance demand his safe, steady and incremental approach.