In Need Of A Flying Start, Turnbull Can Only Shuffle


The new cabinet won’t solve the problems the government’s problems, writes Ben Eltham.

Australia officially has a re-elected government. Today saw the swearing in by the Governor-General of Prime Minister Malcolm Turnbull and his new cabinet. The second Turnbull ministry is officially the 71st ministry of the Australian government.

In the perennial game of who’s in and out, there are some winners and losers. The Nationals have been rewarded for their good showing on July 2, with an extra cabinet spot found for Queenslander Matthew Canavan, who becomes the Minister for Resources and Northern Australia. Barnaby Joyce keeps Agriculture, Nigel Scullion keeps Indigenous Affairs and Fiona Nash keeps Regional Development.

Among the Liberals, Turnbull has kept faith with his factional backers, at the expense of the Abbott loyalists. Turnbull supporters Simon Birmingham, Arthur Sinodinos and Marise Payne are all retained in their respective portfolios of Health, Cabinet Secretary and Defence. Mitch Fifield keeps Communications and the Arts. Sussan Ley keeps Health.

Josh Frydenberg wins a big promotion to head up a combined Environment and Energy portfolio, which has already led to shudders in the renewable energy sector. Christopher Pyne has been given a special Ministry for Defence Industry, which makes him boss of the controversial new submarines project.

Hardliners have been given a few fillips. The ACT’s Zed Seselja has been made an Assistant Minister, as has hard right New South Wales MP Alex Hawke. But there is no love for Eric Abetz, Kevin Andrews, or for Tony Abbott himself.

There are undoubtedly some losers in the reshuffle. Kelly O’Dwyer has been demoted from the position of Assistant Treasurer and Minister for Small Business, with Small Business given to the Nationals’ Michael McCormack and O’Dwyer’s role renamed to “Revenue and Financial Services.” It’s a pointed decision. O’Dwyer did not perform well as Assistant Treasurer in the run-up to the July election.

Greg Hunt has been moved sideways, from Environment into the Industry, Innovation and Science portfolio. Hunt had a high profile in the Environment role, but his track record was dismal. Given that innovation is one of the Prime Minister’s favourite buzzwords, he might find the new portfolio to his liking. On the other hand, he’ll now be responsible for Australia’s increasingly troubled research sector, where key agencies like the CSIRO are in crisis.

Perhaps the most interesting aspect of the reshuffle is what it leaves untouched: Turnbull’s economic team. Treasurer Scott Morrison is lucky to keep his job, with many considering Finance Minister Mathias Cormann a better performer.

Like O’Dwyer, Morrison struggled in the financial portfolio before the election. His first budget this May was workmanlike, but did little for the government’s fortunes. Indeed, one of the Coalition’s biggest liabilities during the election campaign was its $48 billion tax cut to big business. Morrison has singularly failed to explain how giving lots of money to overseas corporations can stimulate “jobs and growth” … perhaps because there is no real evidence for it.

Morrison’s struggles with tax and O’Dwyer’s problems with superannuation highlight the Coalition’s central problem: a lack of economic policy nous. Despite rather desperately imploring voters to “stick with the plan” during the election campaign, the truth is that the government has no real plan for the economy beyond tax cuts for business and the big spend on arms procurement. All the heavy lifting to support the economy is currently being done by the Reserve Bank, which is expected to lower interest rates in coming months.

If the economy picks up again and robust employment growth resumes, the government’s fortunes might improve. But if the economy stalls, the government will soon be in deep trouble. Given the uncertainty of the economic forecasts, Morrison will need to lift his game, and quickly, if the Coalition is to avoid drifting in the polls in the second half of the year.

The cabinet reshuffle highlights another aspect of the government’s outlook: it has many unpopular policies. In education, for instance, Simon Birmingham has signalled he wants to have another go at university fee deregulation. This was hugely unpopular when attempted by Christopher Pyne, but is still baked into the budget’s forward estimates.

In health, Sussan Ley is in charge of a pipeline of funding cuts for critical services like aged care. The Medicare rebate is still frozen. Hospitals are still going to receive significant funding cuts, dating back to the 2014 budget. Mental health is in utter confusion owing to government policy changes, and primary health funding has also been slashed. None of this will be easy for the Health Minister.

In welfare, Christian Porter has a whopping $5 billion of new welfare cuts planned.

Over in the new Energy and Environment portfolio, Josh Frydenberg is in charge of renewable energy. Australians really like renewable energy, and they are beginning to get very worried about climate change. But the government remains committed to its Direct Action policy, which simply can’t achieve the emissions reductions cuts that Australia signed up to at the Paris climate agreement. Greg Hunt was a terrible environment minister, but he was quite skilful at deflecting popular discontent. Frydenberg will have his work cut out if he is to avoid becoming the poster boy for the Coalition’s disastrous record on the environment.

This highlights the difficulties faced by Malcolm Turnbull and his government in their second term. Turnbull remains the government’s best asset. But while he is still the preferred prime minister, his reputation has been badly tarnished. His government’s policies are unpopular, and the election of right-wing demagogues to the Senate looks set to further unsettle the popular mood. And yet this new cabinet signals more of the same.

Unless Turnbull can defeat his own enemies inside the Liberal Party and pivot towards the centre on unpopular policies, this cabinet reshuffle won’t nearly be enough.

Ben Eltham is New Matilda's National Affairs Correspondent.