Looking Ahead to Australia's New Morrison Government


Gregory Holland, Senior Consultant, Australia

Photo: Mark Graham/Bloomberg

 

Scott Morrison has been elected by the Liberal Party as their Parliamentary Leader and therefore becomes the 30th Australian Prime Minister. He is pragmatic and has grown up in a conservative, comfortable and Christian family.  He is married to Jenny and they have two school age children. As noted by The Australian newspaper, “Morrison faces a huge challenge – trying to mend a broken party, unite the divided ranks, renew the attack against Labor and devise an election strategy.”

Morrison comes to the Prime Ministership having sat in the Federal Parliament since 2004.  He held several Shadow Ministerial portfolios in Opposition, and served as Australia’s tough Immigration Minister before becoming the Treasurer in 2014.

Morrison is elected to the leadership of a fractured Party and a disillusioned electorate.  The Party is deeply divided between the moderate and right wings, while the electorate is fed up with the personal and philosophical internal infighting of politicians.  The electorate is further confused that this is the sixth change of Prime Minster in 11 years, five of them having been torn down by their own respective Parties. This background sets the scene for the new Prime Minister to bring his Party, the Parliament and the people together in the next nine months before the Federal election is due to take place.  There will not be an early election, as the Government needs to govern and will run its full term to May 2019.

Morrison brings to the Prime Ministership the policy experience he gained as Immigration Minister, designing and implementing Operation Sovereign Borders, stopping the influx of refugees and restoring the integrity of Australia’s immigration system.  As Treasurer, he has introduced an economic strategy based on economic growth by reducing personal and company tax rates.

He is regarded as a well-connected local Member of Parliament, who is easily accessible to the media, and he is well regarded in his home constituency.  He is involved in the fabric of the local community, particularly through his support of local sporting teams and his involvement in an evangelical Christian church.  He connects easily with the local community, and this readily personal connection is expected to continue as he now moves around the country.

Staying (and Setting) the Course...

Liberal insiders have told Speyside that his election is a return to Liberal Party orthodoxy, where he is a servant of the Party, rather than his predecessor, who imposed himself on the Party.  Former Prime Minister Turnbull was always regarded as a Party outsider. Financial market analysts believe that there will be little major change in either economic or social policy under a Morrison Government.  The Prime Minister will need to bring together a severely fractured Party, and appoint Ministers that reflect the social demands of the community, including the appointment of more women to the Cabinet.

Morrison has been the architect of the Government’s economic record, which has seen the jobless rate fall to its lowest in six years.  Australia’s economy is growing, continuing its uninterrupted 26 years of growth - at 3%, this is the fastest economic growth by any G7 economy. His biggest challenge, as he outlined in his first media conference, is to address the country’s drought. Other major issues include the rising cost of power prices, healthcare and childcare costs, stagnate wage growth, and growing congestion in the nation’s cities.  His other big challenge will be addressing the national debate on immigration and population growth.  He has also listed as concerns access to affordable medicines, aged care (both his parents are in aged care), Medicare and small and medium sized business.

The Government will also need to address certain elements of the economy.  The national debt is projected at $550 billion over the next decade.  As mentioned earlier, power prices have been rising to the tune of more than 10% per year.  The country’s property boom is in decline, just as the Royal Commission into financial services focuses on some of the worst traits of several of Australia’s largest companies.  Furthermore, the Australian dollar continues to fall on the back of a collapse of resources demand - economic restraint on the eve of an election, therefore, will be hard to achieve.

It is our assessment, therefore, that all the Prime Minister’s focus over the coming months will be on the economy, which has always been a vulnerable area for Labor.  The resurgent Labor Party have been increasingly active in articulating their proposed economic agenda – which is in turn receiving attention and acceptance within the business community.

Liberal Party strategists believe that Labor will still most probably win next year’s election. They do, however, concede that the ground has shifted and their chances of victory have improved.  For Labor, the election of Morrison is not good. They would have preferred to instead face the defining and hard-right vision of Dutton in the federal election - with Morrison, they now have a harder target.


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