The Power List Part 2: Scott Morrison trims budget razor gang

EXCLUSIVE | A trimmed down razor gang and hand-picked advisers will help reshape the economy.

Prime Minister Scott Morrison and Treasurer Josh Frydenberg during Question Time in the House of Representatives in October. Picture: AAP

Scott Morrison and Josh Frydenberg have established a new “heart of government”, slimming down the budget razor gang and recruiting key advisers to deliver the Coalition’s economic blueprint for the 2022 election.

In a move to streamline the Expenditure Review Committee process, the Prime Minister has contained permanent cabinet membership to himself, the Treasurer, Fin­ance Minister Mathias Cormann, Deputy Prime Minister Michael McCormack and Health Minister Greg Hunt.

READ MORE: The Power List: Part 1 | The Power List: Part 3 | Our future is on a firmer footing, writes Josh Frydenberg | Inner sanctum fiercely loyal | PM’s eyes and ears | Mandarins lead PM’s reform agenda | PM’s policy shapers

The Australian understands the ERC is now meeting twice a week during parliamentary sitting periods and having more frequent contact, accelerating the government’s pace in responding to policy and expenditure.

“This is where the heart of government now lies. Individual members will rotate in to present their cases,” a senior government insider told The Australian.

“This ERC is now where the big decisions and broad economic strategies are made. It’s a very concentrated group. It’s the ERC that Morrison wanted. And they are the people he wanted.”

Ahead of next week’s mid-year economic and fiscal outlook update, insiders revealed Mr Frydenberg regularly stays at Kirribilli House when he is in Sydney, reflecting a close relationship with Mr Morrison. The pair, as shown in part two of The Australian’s Power List, have appointed trusted advisers to influential roles to help shape the Coalition’s reform agenda as they combat inter­nation­al headwinds, stagnant wages and flat consumer spending.

Part two of The Power List reveals the trusted business experts and policy advisers helping the PM and Treasurer to shape the economic landscape of the nation.

THE POWER LIST: See Scott Morrison’s Network of Influence — Part 1 and Part 2

Among their key economic advisers are: Rod Sims, the chair of the Australian Competition and Consumer Commission; Reserve Bank Governor Philip Lowe; Productivity Commission chair Michael Brennan; Foreign Investment Review Board chair David Irvine, ASIC chair James Shipton; ASIC deputy chair Karen Chester; former treasurer and Future Fund board of guardians Peter Costello; and Martin Codina, Mr Frydenberg’s chief of staff.

A senior minister described the relationship between Mr Morrison and Mr Frydenberg as “unique” and the closest between a prime minister and treasurer since Robert Menzies and Harold Holt.

Mr Morrison consults Mr Frydenberg on everything from the economy, budget and electoral mood to internal party politics and fundraising.

“They are from different states and very different electorates; this gives them both unique perspectives,” the minister said.

“It is a very close relationship,” another cabinet minister said. “It’s genuine. They would speak to each other several times every day outside the meetings of cabinet and Expenditure Review Committee, leadership meetings and all the formal meetings.”

Key economic adviser: Reserve Bank Governor Philip Lowe. Picture: Kym Smith

Key economic adviser: ACCC Chairman Rod Sims.

Mr Frydenberg, who has leadership aspirations that have led to comparisons with John Howard and Peter Costello, is said to have no intention of undermining Mr Morrison.

Despite a successful partnership, the Howard-Costello dynamic was undermined by Mr Costello’s ambitions for the top job. Ironically, Mr Howard and Mr Costello have now become important sounding boards for Mr Morrison and Mr Frydenberg.

As Mr Morrison did as treasurer, Mr Frydenberg regularly seeks counsel from Mr Costello.

Treasury Secretary Steven Kennedy, appointed in July, Australian Competition & Consumer chair Rod Sims, financial and corporate watchdogs Wayne Byres and James Shipton and Productivity Commission chair Michael Brennan are also in close contact with Mr Frydenberg.

Reserve Bank of Australia governor Philip Lowe, who has been at odds with government over his commentary on stimulus, infrastructure and monetary policy, ­remains one of the most ­influential economic figures in the nation.

Key economic adviser: Former treasurer Peter Costello. Picture: Gary Ramage

Mr Frydenberg has also assembled a team of economic advisers, led by chief of staff Martin Codina, that includes Nathan Wonder, a former Treasury official, and former NAB executive Adam Clark.

Victorians Michael Sukkar, the Assistant Treasurer and Housing Minister, and Jane Hume, the Assistant Minister for Superannuation, Financial Services and Financial Technology, are also working closely with Mr Frydenberg leading reforms in the housing and financial sectors.

As revealed in The Weekend Australian, Mr Morrison relies on the advice of a small circle of corporate confidants and does not seek the approval of business executives. In contrast, Mr Frydenberg is a well-known networker with a contact book spanning multiple industries and fields.

Following the May 18 election, corporate Australia was rattled. Many had written off Mr Morrison and put in place staff and strategies to appease Labor. Major companies and lobby groups have now begun the process of reconnecting with the Coalition.

Mr Morrison and Mr Frydenberg, along with other government players including Ben Morton and Yaron Finkelstein, have worked with business leaders to ensure they are on the same wavelength moving towards the 2022 election.

Key economic advisers: Chair of ASIC James Shipton and Deputy Chair Karen Chester. Picture: Gary Ramage

The Business Council of Australia — which had been frozen out over a perception it had banked on a Labor victory and was slow to campaign for company tax cuts — is back in favour. Former MYOB chief executive Tim Reed was installed as BCA president last month and intends working with government on shared goals.

Not everyone got it wrong. Master Builders Australia chief Denita Wawn was one of the few industry leaders who picked the winning team.

Others retain relations with the government, namely Australian Mines and Metals Association chief Steve Knott and West Australian mining lobby head Paul ­Everingham.

Writing in The Australian today, Mr Frydenberg says with growth in government spending “around its lowest level in 50 years” and welfare ­dependency at its lowest level in 30 years, “now is the time to pay down Labor’s debt. If not now, when?”.