Election Score At Half Time– The Players, The Stumbles, The Issues

Aaron Patrick is Deputy Editor of The Australian Financial Review and the author Credlin & Co – How the Abbott Government Destroyed Itself. Over 20 years, Aaron Patrick has worked as a journalist in Australia and the US for the Wall Street Journal, Washington Post and Bloomberg. On Tuesday 31 May 2016, mid way through Australia’s long federal election campaign, Aaron Patrick joined Caroline Overington, associate editor at The Australian and award winning author, most recently of The Last Woman Hanged to assess how the major parties and their leaders were progressing.

ELECTION SCORE AT HALF TIME– THE PLAYERS, THE STUMBLES, THE ISSUES

AARON PATRICK

Well, Laura, let me speak to you about company tax and speak to you as somebody who has been in business most of their life and understands how business operates, understands how companies make investment decisions. If you want to have more of something then you lower the tax on it. If you want to have more investment then lower the tax on investment. If you want to have less of something then increase the tax. Labor is proposing to increase the tax on investment – that will result in less investment and, if you have less investment, you will get less jobs; that’s… that is very straightforward. Now, as far as company tax is concerned, over the next three years, if we are returned to government, company tax will come down from 30 per cent to 27 and half (27.5) per cent – Malcolm Turnbull

Have I made the point? I can keep going.

That’s an excerpt from Malcolm Turnbull’s answer during Sunday night’s leaders’ debate with Bill Shorten. I don’t know how many of you could follow that. I could barely follow it and I was reading it in front of me. That, for me, shows why Malcolm Turnbull is failing in this campaign. As Caroline has said, he’s a very smart guy, but unable to cut through and what we’re seeing in this election campaign is Malcolm Turnbull at his weakest.

We are seeing how Turnbull’s over-articulateness is undermining his ability to communicate with the population. Essentially, he doesn’t know how to deliver a message. It was hilarious, a couple of months ago, when Tony Abbott was doing his pollie pedal in southern NSW. There was a camera on the road, and they’d set it up like he was still the prime minister. Abbott said, you know, the Labor Party wants to introduce five new taxes. And he just reeled them off. Essentially, what he was doing was saying to the Liberal Party MPs who deposed him, “I’ve still got it. I know how to communicate.” Malcolm Turnbull, on the other hand, gets up and tries to explain macroeconomics to the Australian population. That’s not what politics is.

I’m the deputy editor of the Australian Financial Review. My job is mainly sitting there and editing the front page. Every night we have a news conference. At 5 o’clock we work out what we’re going to put on the front page. We see all the images coming through from the day. At the moment, most of them are from the campaign. Day after day, I see high quality, interesting images coming through on Bill Shorten. Bill Shorten running along the Bondi to Bronte track, Bill Shorten buying his wife flowers today, Bill Shorten having a cup of coffee.

And then you see Malcolm Turnbull. You know, Malcolm Turnbull in his suit and tie, Malcolm Turnbull behind this horrible blue screen with a picture of Australia on it and writing that you can’t read! And we had to ask them, “What is it?” They said, “Well, that’s the new Coalition symbol.” Okay, that for me symbolises the inability of this Coalition campaign to communicate.

So what’s going on?  We asked a contact why things were going so badly? And he said, “Look, Malcolm Turnbull only listens to two people. One of them is Lucy Turnbull and one of them is Sally Cray, his principal private secretary. And he’s surrounded by sycophants and he won’t take advice from anyone. So, you’re seeing this remarkable event in this campaign where the absence of Peta Credlin is being felt.

This campaign shows what Peta Credlin’s great strength was. She is possibly the most maligned woman in Australian politics. But Credlin had a great strength, which is organisational capability. And she knew how to stand up to the Prime Minister and she wasn’t awed by the prime minister. She wasn’t a sycophant. And she was attacked for that – people called her the most powerful person in the government, but not in a positive sense. But what Credlin could do was set up an advance team. When Turnbull was leader of the Opposition, he didn’t have a strong advance team. When Credlin and Abbott came in, they set up a very strong advance team. That’s just one of the things that she did.

So far, the sound grabs, the images are all going in favour of Shorten. Now, one of the most remarkable things Caroline touched upon is Bill Shorten. Bill Shorten, in the space of some three months, has completely transformed his image. A couple of years ago, he was this PM-killing, faction numbers man who came out of a possibly corrupt union. He was investigated by the police for serious sexual assault. But no charges were laid. He dumped his first wife. He has some serious baggage and yet he’s come out and turned into Mr Nice Guy. And it’s working. And it’s working because he understands the power of television. And he’s comfortable. He’s comfortable campaigning; he always has been. And he enjoys it. Shorten has that great ability to just get on the stump and talk to people in a natural way in a way Turnbull can’t.

Bill Shorten also isn’t bound by the consistency of his position. All his life he’s worked to build up close relationships with business people, and benefitted from them. Richard Pratt was a great mentor to him. As a trade unionist, he tried very hard to build up his relationship with business. At the moment, he’s running a very anti-business line. He’s talking about placing the 49 per cent top tax rate permanently on the books. With Bob Hawke and Paul Keating and Tony Blair and Bill Clinton, you have these centrists, capitalists on the left. But what is widely regarded as one of Labor’s biggest problems in the UK was when Tony Blair stepped down, and Gordon Brown stepped up to be prime minister. He raised the top marginal tax rate to 49 per cent. It may not have been exactly 49 but it was definitely in that area.

So, that is the players. Let’s talk about the stumbles. The great stumble of this campaign was David Feeney. David Feeney is not so well known here, but he always wanted to be the Graham Richardson to Bill Shorten’s Bob Hawke. I went to university with David. I remember when he was running as a candidate trying to take over the Science Club. I was in my first year. David had a love-hate relationship with Bill. Bill was part of a group called Network which, essentially, was the first political organisation he ran. Some of the people I met around this group became major figures in the party.

Anyway, there was a massive falling out, partly because of Bill’s ego. Bill went and joined what was perceived then as the “dark side”, which was David Feeney. You know, David Feeney, the guy who carried on working branches. But David, in a way, symbolised how the Labor Party, at least in Victoria where it’s probably a bit less corrupt than NSW, operated. There was an elite social group and an interesting dynamic where you had David’s wife Liberty Sanger, a partner at Maurice Blackburn, very friendly with Bill Shorten’s first wife, Deborah Beale, the daughter of one of the richest men in parliament for the Liberals at the time, and very close to the Pratts. There was also Kathy Jackson. These three women were drinking buddies. But they were also politically entwined too.

David wanted to have a union backing him just like Bill Shorten and Steven Conroy did. Bill had the AWU, and Steven had the TWU. So David latched on to Kathy so he could have the HSU. It all fell apart pretty spectacularly because it turns out Kathy was dishonest. And the marriage ended between Bill and Deborah. David has been damaged over his failure to declare his valuable second house (which was negatively geared) at least in the short-term, and the hopes he had of being this great political player. He couldn’t really cut it on the national stage in the middle of an election campaign. So I think David Feeney wins the award for the biggest stumbler of the campaign so far.

The third point I’m going to talk about are the issues. What are the issues in this campaign? A profound change has taken place in Australian politics. I would argue this is the first time since 2007 that the election and politics predominantly haven’t been about personalities. There are some personalities involved, but it is not about personalities, not predominantly about personalities. Politics in Australia has been a soap opera over some years. Kevin 07 came in and promised to save the country from boring old John Howard and we went through the great trauma of replacing him with Julia Gillard, then going back to Kevin Rudd and then changing to Tony Abbott and Peta Credlin. I would argue that under Turnbull and Shorten, two relatively conventional politicians, politics has become an issue of substance. And the issue of substance is pretty profound. It is the size of the state. The size of the taxation system.

The Labor Party is unashamedly arguing for a bigger state and a bigger tax system – school spending, education spending, health spending. And Malcolm Turnbull is arguing for lower taxes. I think Malcolm Turnbull has got the hardest sell. Because he’s been told by Treasury and by the experts that a company tax cut was going to be good for the economy. And I don’t think there’s anything harder to sell to Australians than a company tax cut. Very intelligent people on the left just refuse to believe the academic view that company tax cuts will be good for the economy.

So Turnbull’s trying to sell something which is pretty hard to sell. On the other hand, you’ve got Shorten there out selling 49 per cent top marginal tax rate. And that’s a pretty big deal too for people who earn over $180,000. This all goes to what kind of society we are. How do we tax the wealthy, how do we tax the successful, how do we tax the people who work hard?

Driving this on the left is that Shorten knows it’s going to be very hard for him to win. He’s doing well in the polls but there’s no sense of crisis in Australian society. There’s no sense of massive failure. There’s a sense of disappointment, sure, in the government and that Turnbull wasn’t as amazing a leader as we’d all hoped he’d be. But I’m not convinced that there is such a great sense of disappointment that it would lead to a first term government being thrown out, which is a pretty rare thing to happen. And I suspect that the Labor Party’s realise that too. So they’re doing a traditional, left-wing, high-taxing policy to shore up the base, to get them within striking distance of winning power next time. That’s their strategy and Turnbull’s strategy is he’s prepared to lose some votes, lose some seats, lose ten, maybe 15 seats like Hawke did in 1984 and then lock in what he thinks will be lower taxes, a stronger economy and bed down for a stronger economy which could drive a victory in the following election.