Grattan on Friday: Plenty of ‘rising damp’ in Turnbull government’s approach

On energy security, there is a distinctly ‘big government’ approach by Malcolm Turnbull. Lukas Coch/AAP

The Liberals have a new duumvirate at the top of their organisation. Nick Greiner, one-time New South Wales premier, will be installed – in absentia, because he’s in Europe – as president at the party’s federal council on Friday night. Greiner is Malcolm Turnbull’s personal choice.

Andrew Hirst will be given the tick by the party’s executive as federal director. Hirst, who is working with Crosby Textor (the firm that does the party’s polling), is a man of excellent survival skills, having served opposition leaders Brendan Nelson, Turnbull and Tony Abbott, and then Abbott in government.

The two face character-forming challenges.

Greiner, whose credentials include his strong business connections, has to rake in money for a party seriously strapped. Once, the conservatives were usually flush with cash, while Labor cried poor. These days many companies don’t make political donations. Apart from that, a government on the nose doesn’t attract dollars.

Hirst must revitalise a campaign structure that’s much weaker than Labor’s, in an era when the dark arts of political persuasion approach the complexity of neurosurgery, voters are cynical or not listening, and many in the “base” are unimpressed with Turnbullism.

How much easier it would be to ask for money and activate the grassroots if, instead of the Coalition trailing in 14 consecutive Newspolls (the latest this week), it had had a string of commanding leads.

Polls drive today’s politics to an alarming degree, affecting the mood of a party, inside and outside parliament. If the Coalition were doing well, the critics in Turnbull’s ranks would have to be much more accepting of him. Popularity is a warm protective blanket for a leader.

Liberals point to Turnbull’s ascendancy over Bill Shorten as preferred prime minister, but that’s of limited comfort, because they know many voters are disillusioned with the leader they’d hoped would represent a new brand of politics.

As it attempts to limit vulnerabilities and confront pressing issues, the government is sending some confusing signals to the electorate.

There is the whole “Labor-lite” message.

Getting the needs-based Gonski 2.0 through parliament is a substantial achievement. It’s good policy and should limit, albeit not wipe out, Labor’s advantage on schools.

But the policy spends a lot, in tight times, after years of the Liberal schools story saying it wasn’t about more money. The government’s desperation to pass the bill was evidenced by its adding in this week’s negotiations $A4.9 billion to its initial extra $18.6 billion ten-year plan.

The exercise has also seen the Liberals shun their usual cultivation of the Catholic lobby, which has reacted aggressively.

In business and economic areas, the Turnbull government is also saying loud and clear that it is not in the usual Liberal mould.

Remember the old talk of “wets” and “dries” in the Liberal party? The “dries” – economic rationalists – gained dominance many years ago. Both sides of politics dried out, and selling government-owned enterprises became the order of the day.

Now we’re seeing plenty of rising damp, not so surprising with Labor but more so from the Liberals.

The budget’s bank tax was driven by fiscal necessity. But the new rigorous governance regime for the banks – responding to some appalling behaviour – is notably intrusive and a change of tack. The Abbott government tried to unwind protections in the financial advice area.

On energy security, there is a distinctly “big government” approach.

Galvanised by a worsening power crisis and people’s deep concern about rising prices, the government is to use export controls to boost the availability of gas.

In the budget, it announced it wanted to buy out the New South Wales and Victorian shares in the Snowy Hydro, boosting the Commonwealth’s ownership from 13% to 100%.

It is also leaving open the prospect of helping to finance new clean coal generators.

Business is desperately looking for a coherent energy policy to provide certainty for investment. The Business Council of Australia has welcomed the Finkel report’s advocacy of a clean energy target, hoping this could be a path to a settled policy.

But the BCA this week warned: “Companies will only invest in new energy infrastructure if there is a stable policy framework, with minimal government intervention, that will outlast the government of the day … We strongly caution against using taxpayer funds to finance new electricity generation”.

The possibility of financing power plants goes to the Coalition’s commitment to coal. But it’s the outlook for coal that speaks strongly against such financing.

If so-called clean coal can’t attract adequate private investment, it will be because the long-term viability of such projects is considered poor. So it would be rash for a government to jump in with public funds or guarantees that could be rued as the years pass.

Despite the signals, that initiative is unlikely to come to pass. One Liberal says that if the government ever tried to invest in coal-fired power stations Turnbull would have “a riot on his hands”.

On Thursday the government received a fresh blast from the big end of town, after the South Australian budget followed the federal lead of garnering revenue from unpopular institutions by imposing its own bank tax.

The BCA blamed the Turnbull government for “letting the genie out of the bottle”, and declared that: “All of these ‘one-off’ government decisions, when taken together, have a chilling effect on business investment which is at its lowest level as a share of GDP since June 1994”.

The BCA claimed that: “Australia is becoming a laughing stock of global investment circles as erratic governments – state, territory and federal – carelessly undermine and chop and change the rules of doing business”.

Of course a discount must be applied to the BCA comments – there is a lot of self-interest involved. It represents the country’s biggest companies, including in the banking and resources sectors.

Nevertheless it is business, particularly big business, that drives job creation and the angst does little for the positive mood the government is trying to encourage.

Greiner is likely to get some tough feedback as he moves round his business network, wearing his new Liberal president tag.

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