Grateful economics gurus tip more of the same

Economists have cautiously welcomed the new Morrison government, revealing they expect little to change.

Tasmanian economist Saul Eslake. Picture: LUKE BOWDEN

Economists have cautiously welcomed the new Morrison government, revealing they expect little to change despite the Prime Minister’s singling out of drought assistance, lower electricity prices and tax relief for small businesses as his top priorities.

Economist Saul Eslake, asked what changes he expected, said: “Not very many — and thank goodness for that.

“While Morrison won’t go down as one of Australia’s great reforming treasurers — he wasn’t there long enough, and the government’s position in parliament was too weak for historically significant reform to have been legislatively possible anyway — he was at least competent.”

Mr Morrison announced his ministry on Sunday, including the appointment of Angus Taylor to the politically charged energy portfolio — “minister for getting power prices down”, as the Prime Minister put it.

Former energy minister Josh Frydenberg is ­now Treasurer.

AMP chief economist Shane Oliver said: “Mr Morrison is seen as a reasonably sensible policymaker, is respected by investment markets in his role as treasurer and is seen as a centrist.”

JPMorgan’s top economist, Sally Auld, said she expected minimal policy change. “It is likely Morrison will preserve the ambition to return the budget to surplus, and unlikely (he) will take corporate tax cuts as policy to the next election.”

Macquarie Bank economist Justin Fabo, referring to the jump in the Australian dollar last week after news spread that Mr Morrison had won the ballot, said: “The markets have spoken already. As an ex-treasurer with runs on the board, he was always going to be the preferred option from the market’s perspective.”

Financial services policy is expected to loom large before the next election, with the royal commission into financial services to report in February.

Opposition Treasury spokesman Chris Bowen pointed out Mr Morrison had long opposed the inquiry. “For years Scott Morrison actively led the resistance against Labor’s call for a banking royal commission, labelling it a ‘populist whinge’ and voting against it 26 times,” he said.