They have their brief day in the sun, and then they fall. Malcolm Turnbull was loved by both the Big End of Town as well as the chattering class. He was not only pro-Big Business, but also championed politically correct causes such as the Republic, the Aboriginal Constitutional recognition, and same-sex marriage.
However, the latest Newspoll (The Australian, September 27, 2016, p. 1) not only shows the incompetent Labor Party racing ahead at 52 to 48 percent in two-party preferred terms, but Turnbull’s ship sinking. Abbott in the final Newspoll before his replacement by Turnbull had a satisfaction rating of 30 percent, but Turnbull’s satisfaction rating is now at 32 percent. Before Abbott’s fall the Coalition’s primary vote was 39 percent, and today is 38 percent. Clearly the Coalition and Turnbull are “on the nose,” but what else is new.
In this financial year the ratio of government spending to GDP will reach 25.8 percent, which almost reaches the 26 percent figure of the Labor government in 2009-2010 (The Australian, September 27, 2016, p. 14). In 2007-2008 government debt was minus $45 billion, but now we are in the red to the tune of positive $326 billion, 19 percent of GDP. The net interest payments on that debt run at over $1 billion a month.
Former Treasury Secretary Ken Henry, who supported the Rudd Labor government’s response to the global financial crisis (GFC) of 2008 by increased government spending in a neo-Keynesian strategy, now is concerned that faced with another GFC Australia would be in deep waters: “What happens is the Australian dollar will tank. Unemployment would obviously go into double-digit figures, businesses would fail, banks would be unable to continue to provide credit to homeowners, to businesses, small and large, infrastructure funding would stop dead in its tracks.”
The Coalition has continued on the same path set by Labor of out-of-control spending and debt accumulation that will mean that in the next GFC – which some predict will strike early next year – our economic pain will be intense. Such will be Malcolm “the Great’s" legacy.