#turnbullcoalition

Turnbull should Google ‘common sense’

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UK PM Theresa May Maybe an uninspiring speaker and weak political figure given her dreadful stewardship over Brexit, yet she still deserves to be shown respect by her fellow leaders. Australian PM Turnbull clearly had some dead time during May’s CHOGM speech to send some emails and text messages. Turnbull is void of common sense. There is zero chance the Turnbull Coalition can win the next election.

CM attended a Liberal Party function yesterday and local membership is dwindling. The average age of those that attended was 60+. The issues raised by the audience were a slowdown of immigration followed by daylight then electricity prices. Yet Turnbull’s Coalition is all about issues that conservatives aren’t focused on. Throwing his ministers under a bus and championing that he’s less worse than the opposition.

 

Virtue signaling fails again at the ballot box

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No matter how dreadful the Liberals under Turnbull are at a federal level, South Australians realized that the 16 years of Labor in SA led them to the slowest growth, highest unemployment and most expensive electricity prices in the nation thanks to the loony renewables policy of the Weatherill government.  He ran a platform to double down on the failed policy that led to multiple state wide black outs. Common sense prevailed and he was rightly booted.

No amount of blowing up coal fired power stations or smug smiles while shaking hands with Elon Musk to make out as if wasting $560mn more of taxpayers money was intentional, could sway the hearts of the electorate.

The Libs gained a majority on its own right with 25 seats. Labor set to lose 5 seats to 18. The Greens lost more ground in SA, slipping over 2% to 6.6%. No seats. At the sharp edge of the wedge, a growing number of constituents don’t need the virtue signaling. They want sustainable jobs, sensible stewardship of their tax dollars and reliable, affordable electricity.

Whether the Libs can actually deliver is another question but Premier Weatherill’s flagrant failure came home to roost. However Turnbull mustn’t take these state victories as an endorsement for the coalition at the federal level. He’s still badly burnt toast.

PM Turnbull enforces sex ban between ministers and staff

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Talk about closing the gate after the horse has bolted. How out of touch can PM Turnbull be to think imposing a ban on consenting adults will achieve anything much less stop the rot in the polls? As CM wrote yesterday, the citizens of Australia would gladly trade off randy politicians if they applied the same energy they  do ‘on the job’ on the job! People want action on policy rather than the headmaster telling naughty schoolboys how to behave! What a farce. Voters are more angry at being taken for mugs by giving mistresses $200,000 taxpayer funded jobs rather than dismay at sexual antics inside parliament corridors.

Once again Turnbull shows complete error in judgment. Instead of showing a firm hand he only shows himself ever more impotent (no pun intended).

At least China has a policy in The Pacific

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Australian International Development Minister Concetta Fierravanti-Wells has attacked China’s aid to Pacific nations. Her argument was that China was lending funds to Pacific nations on unfavourable terms and constructing “useless buildings” and “roads to nowhere” in the region. Even if that were so, doesn’t this expose the Minister’s own inadequate policy? Shouldn’t she be preventing such activity by offering more favorable terms and better advice on infrastructure? Isn’t it China’s business to decide whether it deems such spending a waste?

Fierravanti-Wells said to The Australian,

You’ve got the Pacific full of these useless buildings which nobody maintains, which are basically white elephants … I’ve gone to islands and you’ll be driving along on some back road and all of a sudden you see this Chinese road crew building a road to nowhere and you think ‘hmm, what’s all that about’,”

It is all very well firing pot shots at China for its active Pacific policy but at least it has one. Indeed if the end result is that Pacific nations end up agreeing to China’s influence they do so willingly. The Minister can’t claim that these nations are not happy about the situation. Afterall had the ‘international development’ portfolio team done its homework it could see that China has pursued this policy for decades in Africa, Latin America, Pakistan and the Middle East. Who knew?

China has been a poster child of stepping up and filling the void left by The West. China understands that the nations we won’t deal with on the basis of human rights records, dictatorships and the like make perfect bed fellows which leads to even juicier returns provided said despots get the right ‘incentives’. China is not working to virtues.

How can we be surprised? UN sanctions are slapped on North Korea to bring it to heel. Two weeks later Chinese oil ships are trading with North Korea. No cleaner example of China’s disregard for world opinion. China is a master of strategy. It knows it will be stronger than the US in time. 20, 30 or 40 years  is of little concern. Just get the chess pieces in place. Find vulnerable or willing nations off the radar screen and show them love so they reciprocate in ways that strengthens Beijing’s policy directives.

There should be little surprise with this ‘transactional’ Australian government in allowing this state of affairs to occur. Because Tonga or PNG rate less important than China, Japan or the US in terms of trade dollars we apportion the same relative importance to their strategic value. That is about the level of the thinking.

China has the opposite view. It knows that buying influence in Port Moresby with new roads or bridges allows concessions where they really want them. Naval ports. The Chinese have already got East Timor to agree to a trading port which will accept ‘visits’ from PLA Navy vessels.

Our foreign policy is so poorly thought out that even Obama censured us for leasing a port to China! When we’re getting lessons from Obama on foreign policy what more proof do we want for the clueless ineptitude of our government? We’re too busy trying to bribe electorates with multi billion dollar submarine programs where the contractor isn’t even sure it can design what it promised, not to mention arriving in 50 years!

So the Minister best just understand the world we live in. With 5 prime ministers in 10 years is it any wonder we can’t formulate a coherent long term strategy? Australia can moan all it likes about China but its the smug nature of our political class who need to wake up. Complaining to PNG about it’s wealthy sugar daddy is unlikely to find a soothing voice if we offer nothing in return.

By the way, China will only be inspired to keep at it. If anything we’ve only highlighted how our of touch we are in responding and that must bring smiles all around.

If everything is so great then why is our political scene so broken?

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Queensland’s state election said it all. Both the incumbent parties lost massively even though the incumbent Labor Party looks like holding on to power. While Pauline Hanson’s One Nation party looks like it fared poorly in terms of seats it still got 13.8% of the vote from 1% in 2015. Forget the headline results but think of what the political turmoil In local, state and federal levels is telling us more broadly.

Think logically about it all. If the economy is booming, jobs are abundant and prosperity is on the march then there is little need for governments to be running deep deficits let alone facing hung parliaments and acts of desperation. Surely the incumbent governments of the day can laud their own achievements and their constituents would happily keep returning the status quo. The majority should continue to be happy. More by rights should be winners in such a world of record housing prices, steady wage growth, low unemployment and 25 years of economic growth as experienced in Australia.

Yet PM Turnbull turned on many of the traditional supporters of the conservative wing of his Liberal National Party (LNP) coalition who turned their back on him to hand Labor the victory in Queensland. Not so fast Prime Minister. They didn’t leave the party. The party under your incompetent stewardship left them. At all levels the LNP is divided. There are some quarters suggesting that the Nats may split from the Coalition in the next election in Queensland to leave the stench of the Liberal Party to themselves. This is when personal ambition trumps wish to serve a nation.

While the LNP was handed the most valuable and recent lesson of the disaster that was the Rudd-Gillard-Rudd internal factional knifing during their time in power, it completely buried its judgement and started following a left leaning press, weak poll numbers and copied Labor’s folly. Now we have a hung parliament (not withstanding the dual citizenship fiasco) with chronically weak and misguided leadership. One that tells voters that they have no clue rather than introspection that the party may indeed be the problem.

It used to be said that Australia enjoyed the most stable politics in the Asia Pacific region. That encouraged foreign investment and gave Australia low interest rates, a superior credit rating and a regulatory platform that ensured trust (important for corporations), the envy of many nations. Yet inside a decade we have had 5 (soon to be 6) prime ministers which has thrown that ‘reputation’ in the toilet. In a world where international capital is more mobile than ever and asset prices are peaking, instability in government eventually carries severe financial market penalties.

For Aussie banks, levered up to the gills with inflated mortgage books on their balance sheets, such things have negative implications for the 40% reliance on global wholesale credit markets to fund themselves in the face of a tightening US interest rate cycle. Do not underestimate the negative connotations of a federal government that has lost its way, no matter which major party is in power. Where the average Aussie can’t bear anymore on the mortgage, a third admitting they can’t pay the home loan if they lose their job for 3 months or more. Almost 1,000,000 Aussie households would be in severe mortgage stress if rates moved 150bps(1.5%). Think of the spill-over effects on consumption which would only lead to a recession and lay offs, exacerbating a cycle, all the while bashing the currency making international funding even more biting. If only we had a stable government that had a decent fiscal position to weather that storm. Oh, that is right we squandered that in 2008.

One Nation in Australia, AfD in Germany, Party for Freedom in The Netherlands, Front National in France, 5 -Star Movement in Italy, Fidesz in Hungary, FPO in Austria, the Sweden Democrats, Vlaams Belang in Belgium,  Progress Party in Norway, Trump, Brexit…these patterns aren’t random. It isn’t just populism but protest votes to establishment parties that aren’t delivering. While we are constantly told how great our lot is, sadly the gap between haves and have nots is widening globally. Politicians who are ditching political correctness and making waves on publicly uncomfortable issues are thriving. Why could that be?

Donkey (informal) votes in Australia have seen numbers soar from 2.2% in the 1950s to over 5.0% in the 2016 election. Some electorates in NSW saw as high as 14% informal votes. These are powerful messages in a country that has compulsory voting, which has slid to 90.9%.

The sad reality is that the electorate is making louder noises every election that things are not pointing in the right direction yet the muppets are still being returned to their box seats on a dwindling majority. Why? Because not enough voters are heeding the warning signs that are sounding in front of them. Of course politicians still continue to sell comforting lies backed by ever more unaffordable promises to keep themselves in power for as long as possible when we all need to be facing the unpleasant truths that will happen whether we like it or not.

Indeed those deplorables who voted One Nation might have spurned the LNP but not without good reason. In time, they will be viewed as the wiser ones. Not because they necessarily believe in Pauline Hanson’s platform but because they believe in Turnbull and Shorten’s even less. It all rings like a Premier League football coach making a litany of excuses for his team’s woeful performance that ignores the fact that the collection of individuals have absolutely no cohesion as a team. All the fans can do is bury their heads in their hands until the point they can’t bear to watch another game until the coach is sacked.

An eerily potent lesson for today

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In 2011 then Polish Central Bank Head Marek Belka spoke about why Eastern Europe understood austerity better than the West ever will. As our governments bloat budget deficits to avoid taking much needed reform and belt tightening he said of Western Europe….

“Because the people here still aren’t used to prosperity. Let me give you an example from my days at the International Monetary Fund. It was at a time when the Latvians had to implement a drastic austerity program, which caused consumer spending to drop by 25 percent in a year. I asked a Latvia negotiator how his country expected to survive this dramatic crisis. He said: What crisis? We had a crisis when the Soviets were sending us to Siberia. Here in Eastern Europe, many still remember why they were once poor, and they’re not afraid of reasonable reforms that are painful in the short term.”

Experience is a great teacher. It gives the test first and the lesson afterwards. Maybe time we prepare to be Latvians.

 

Barnaby fought the law and the law won

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Well the High Court has ruled against the Deputy PM Barnaby Joyce. As a dual citizen he has lost his right to serve in parliament. Despite all the assurances from PM Turnbull that the High Court would rule in his favour, the government has lost its majority in parliament. Now the Turnbull Coalition is at the mercy of the independents for ‘confidence and supply’. The Libs must sack Turnbull. He is dead man walking. While Joyce and the other ministers and senators impacted by the ruling were not specifically Turnbull’s fault he helped trade the party unto such a precarious balance that it will be wiped out at the next election. No one needs an eggshell government. So much for the liberal media talking of Turnbull serving more terms than Sir Robert Menzies.  There is a certain sense of schadenfreude to see the end of the Turnbull era. One hallmarked by terrible judgement, duplicitous and delivery on next to nothing.

What we must not forget that Australia’s long held and hard earned reputation as the safest democracy in the Asian region continues to diminish. With the likely 6th PM in almost as many years we are a laughing stock. That is actually a travesty.