HAPPY NEW YEAR MR. TURNBULL?

At a Glance

It’s been a challenging start to the year for the Government.

In January, the then Minister for Health was caught up in a travel rorts scandal that led to her resignation.  Senator Bernardi jumped ship to the Senate crossbench and George Christensen MP is looking ever more likely to join the crossbenchers in the House of Representatives, having announced his resignation as a parliamentary whip.

Couple this with the latest Newspoll showing the Government trailing the Opposition by 45-55 on a two-party preferred basis.

If the first two months are any indication, the Prime Minister is in for a rough ride for the rest of 2017.

For the Opposition, it’s not all a bed of roses.  Labor will be hoping to ensure that the electorate doesn’t adopt Malcolm Turnbull’s recent  blistering character assessment of their leader.

In taking this approach, the Prime Minister has flagged that his gentlemanly tone to politics is over, the gloves are off and he’s preparing for a bare knuckle political brawl right through to the next election.

The Challenges Ahead

 For the Government, economic policy remains front and centre.

This means grappling with a deteriorating budget position and ongoing opposition from the Senate to pass savings measures.

Recently the Parliamentary Budget Office released a budget estimates update showing that there are $8.5b in unlegislated savings measures in the four year forward estimates to 2019-20 and a total of $42b through to 2026-27.

Bear in mind, this was before the Government’s released its childcare and welfare omnibus savings bill that would:

  • save a net $4b in welfare spending
  • increase some childcare subsidies
  • directs $3b in funds to the NDIS

Senator Xenophon has already stated his party won’t support the Bill ,which means with Labor and the Greens also opposing it, the Bill won’t pass.

The Government is attempting to persuade the Senate by claiming that failure to pass the Bill will jeopardise funding for the NDIS. The Government have adopted a tough all or nothing approach to the Bill.  At the core of this is funding for the NDIS.

For the Prime Minister, a deteriorating budget situation, coupled with a hostile Senate sees Australia’s AAA credit rating under real threat.  If this were to happen it would be seen as an absolute disaster for the Prime Minister.

One Nation on the Rise

The phoenix like resurrection of Pauline Hanson and One Nation continues to wreak havoc across the political landscape.

This has been one of the greatest political comebacks in modern political times and poses a significant threat to the Liberal and National parties( and potentially to Labor as well).

One Nation is polling 23% of the primary vote in Queensland, 13% in WA and 10% nationally.

The threat of One Nation has seen West Australian Premier Colin Barnett, who goes to the polls on 11 March cut a preference deal with One Nation.  The Liberals are preferencing One Nation in Upper House seats over the National Party, in return for One Nation preferences in Lower House seats.

Queensland will go to the polls within the next 12 months.  With One Nation polling 23% of the vote, not only would they win seats in the Queensland parliament, they could quite possibly determine who will form Government.

To add to the increasing influence of One Nation, the Senate approved a Select Committee on Lending to Primary Production Customers to be chaired by the party.  This was to honour a promise given to One Nation by the Prime Minister in July last year.

There are now two Senate inquiries into banks, one established by Labor late last year and the Hanson inquiry looking specifically at rural lending practices.

Can you imagine when the major bank CEO’s front Pauline Hanson for a public grilling – it’s certainly going to make for some uncomfortable moments for them and great TV coverage for Pauline Hanson.

It’s clear that One Nation is cannibalising the LNP vote on the political right, just as the Greens have been cannibalising the Labor vote on the political left.

Is a Banking Royal Commission in the Works?

 You may be unaware but only the Government of the day can appoint a Royal Commission.

 Labor continues to support its calls for a Royal Commission into banks, while the Government remains opposed.

To get around this, independent MP Bob Katter has proposed a Bill to establish a Commission of Inquiry, which would have similar powers to a Royal Commission, to which Government backbencher George Christensen has stated he will cross the floor to support.

If this were to come to a vote it could see the Government lose its one seat majority on the floor of the House on a major issue the Government has long opposed.

It is significant to note that the Government lost control of the House on some procedural votes last year.  While this was an embarrassment, to lose a vote in the House on the establishment of a Royal Commission “type” inquiry into banks would be far more significant.

On the back of numerous financial planning scandals, banks are now public enemy number one, but any business that could be considered ‘big’ is not immune.

In an era when many average Australians have seen a decline in their own individual economic circumstances, they have little tolerance for stories of corporate tax avoidance, the need for company tax cuts and extravagant CEO remuneration packages.  As a result, the electorate is basically saying ‘enough is enough’.

This general sentiment in particular has driven the rise of One Nation and the election of numerous other crossbencher’s to the Senate.

Conclusion

2017 has started as an annus horribilis for the Government.

The 2016 election result left the Turnbull Government ‘battered and bruised’, and they would have been hoping for a positive start to the year.

With the early political mishaps, the Government is now facing a budget mishap.  With up to $13 billion in savings measures blocked in the Senate, their budget task is now a nightmare scenario as they face worsening budget deficits and growing public debt.

Bill Shorten is far from popular with the electorate.  To date, Labors good fortune has been a result of the Governments misfortune.

If Labor are seen to be a real chance of forming Government, the party must present a credible policy narrative rather than just coasting on the Governments policy and political failures.

It is still a turbulent time for the business community, One Nation and the other Senate crossbenchers have no interest in being seen to support polices of benefit to big business.

Their appeal to the electorate is based upon standing up for those who feel left behind by the major parties and a prosperous economy from which they are not feeling the benefits.

For more information, in regards to this or any other public affairs issue you may require assistance with please don’t hesitate to contact me or visit the Insight Strategy website at www.insightstrategy.com.au

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