Jul 5, 2016

Goodbye Malcolm Turnbull and goodbye Triple-A | Daily Telegraph

MALCOLM Turnbull and our triple-A credit rating are both going to go. For both it’s only a question of timing.
Is there anyone on God’s Green Earth — and getting greener by the day, thanks to wonderful life-creating carbon dioxide — apart from Malcolm and Lucy Turnbull who thinks he has the slightest possible chance of survival?
The lemmings in the Liberal Party who allowed him to lead them over the electoral cliff should ask themselves this one simple question: if he’s not going to lead them to the next election, what’s the point of him remaining leader for another day, far less another month?
Indeed, if Turnbull himself can’t see that his continued leadership of the party is utterly untenable — he’s effectively announcing his unfitness to continue as that leader.
That’s to say, his refusal to tender his resignation as leader is really an instruction to the — true, pusillanimous and shell-shocked — survivors to sack him.
Alternatively, as I argued yesterday, the Nationals could make it ‘easy’ for the Liberals by declaring their refusal to serve in coalition with a Liberal party led by Turnbull.
Do they — both the Nationals and his, for want of a better term, fellow Liberals — seriously trust him with negotiating with the crossbenchers to from a minority government if the Coalition falls short, as seems likely, to get to 76 seats?
The double-dissolution election was entirely his choice — and won almost unanimous plaudits from the Canberra press gallery, demonstrating yet again its total inability to understand the most basic political dynamics, far less something as hideously complex as simple arithmetic.
Turnbull choose to call time on a Senate, which despite all its complications and difficulties, Tony Abbott had actually managed to do business with. Abbott had got the Senate to abolish both of Julia Gillard’s carbon and mining taxes.
What hasn’t been recognised in the Turnbull wreckage is that Turnbull hasn’t just destroyed that opportunity, he’s destroyed it for at least six years and arguably for ever.
The first thing the DD election, and so the halving of the number of votes needed to win a Senate seat, achieved was to elect even more crossbenchers and cost the Coalition at least two utterly crucial seats.
Previously the Coalition in government needed six of the eight crossbench senators to get legislation through. Now, if they do scrape back into government, they will need at least nine and possibly 10 to get anything through.
Even more disastrously, Labor and the Greens together will be only three or four votes short of a Senate majority. If we get a Labor government, it will be much, much easier for it to get its agenda through the Senate.
And especially, ominously and catastrophically, all those things that appeal to the Greens — especially utterly idiotic, equally pointless, economically destructive and hugely costly to consumers ‘action on climate change’. As indeed, we saw last time, with Gillard and her carbon tax.
The second, equally disastrous Senate legacy from Turnbull’s clever-dick ‘good idea at the time’ is that it’s the idiot’s gift that will keep on giving — to the crossbenchers.
The smaller quota is going to deliver six-year terms to Pauline Hanson, Jackie Lambie and two Xenophites at least.
This goes to the overriding critical point. The Senators are now locked in for either three or six years.
The House can be forced to another election, but the Senate can’t — unless there’s another DD. And that would be a great idea, I don’t think.
This is Turnbull’s most disastrous legacy. What’s the point of the Coalition either getting government now or winning at another election; it won’t be able to get anything of substance through the Senate.
Another election would be a bet to nothing for Labor. If it won, it would have a relatively friendly Senate — all thanks to Turnbull.
In their own interests and in the interests of the country, the Coalition members have to remove Turnbull from having any say in any of this; and they must do it immediately.
The obvious — and desirable alternative — is Abbott.
He proved himself as arguably the greatest opposition leader in our history, not only against the minority Gillard government, but against the Rudd and Gillard majority governments before the 2010 election.
And think about it: the Coalition actually needs such an effective ‘opposition leader’ again.
Either because they will be in opposition, once the last votes are counted and the dealing is done. Or because they will be in a form of opposition, balanced on a knife-edge in the lower house and facing a hostile and very mixed-up Senate.
So, to return to my key question: what exactly would be the point of keeping Turnbull propped up in the leadership, Weekend at Bernie’s style?
If you accept that he cannot continue for any serious length of time; and certainly not until and then through — are you kidding? — another election campaign; if it’s to be done, it’s best done right now.
On the second point, the Triple-A is a gone-gone-absolute goner. The credit rating agencies started twitching yesterday about the ‘political instability’ in the wake of the election — demonstrating they know as much about Australian politics as the press gallery.
So the next government might have difficulty sustaining Budget repair? What the hell do they think has changed?
Both sides had made it crystal clear they had absolutely no interest in serious Budget repair.
The ‘deficit reduction path’ in the Government’s Budget was an absolute joke; and the Opposition promised its deficits would be even bigger!
The Senate was always going to be difficult-to-impossible; it’s just more obviously so now.
When the credit downgrade comes, we will see an immediate sharp, negative, reaction — just like with the Brexit vote. Share prices, and especially those of the banks, will drop — maybe even plunge; so also will the Aussie dollar; interest rates will spike higher.
Then, again just like Brexit, things will quieten down and it will appear the downgrade was a non-event. And in the short-to-medium term it will be a non-event.
The whole global credit-rating system is askew because of all the trillions of dollars looking for either safety — going into ‘good’ government bonds — or some sort of yield — going into shares and property.
So Japan, which has the biggest government debt in the world, an even bigger political and fiscal mess than us, and is rated just AA, is borrowing 10-year money at negative rates. Even though we are triple-A and paying nearly (these days, a huge) 2 per cent.
In the short term it will seem that our downgrade hasn’t really mattered much. Longer term it will ultimately be devastating because of our huge — $1 trillion-plus — net foreign debt and our insatiable demand for more foreign money every year.
That’s when an anti-foreign investor Senate could suddenly take us right over the edge.

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