The last time Malcolm Turnbull spoke at the Press Club, it was as shadow Treasurer after the Budget. More to the point, it was after we found out that he opposed Brendan Nelson’s 5c a litre petrol excise cut. And it was a bravura performance, simultaneously that of a committed team player and also a demonstration to both his colleagues and the Press Gallery of what was on offer should he get — or really from Turnbull’s point of view, when he got — the leadership.

Yesterday was quite a bit different. For a start, the press gallery roll-up was not quite as impressive, although that could be explained by much of the gallery being strung out between here and Lima. There was a certain lack of excitement. And Turnbull, while ostensibly talking about the Government’s first year, was really there to repeat his criticisms of the Government’s handling of the financial crisis, and to offer a couple of policy ideas of his own relating to bankruptcy laws and executive remuneration.

It was not, you might say, a speech for the average punter.

Turnbull’s assessment of the Government’s first year was, astonishingly, none too generous. His primary critique was that the Government didn’t have an economic strategy, but only a political strategy to attack the Coalition’s economic credentials.

Which was a funny coincidence, because as he worked his way through the argument, it was clear you could say exactly the same thing about Turnbull himself. It’s part of an Opposition Leader’s job description to overegg the pudding when it comes to criticism of governments, but to declare that Kevin Rudd was the only leader in the world to actually make the financial crisis worse by his actions looked like an awfully long stretch, if only because George W. Bush and Hank Paulson have already lodged their bid for that title, and they have pretty strong claims.

And to argue that for the Government to go into deficit would be evidence of economic incompetence was not merely self-serving, but straight-out wrong.

The best argument against this came overnight from TD Securities’ Stephen Koukoulas in a cranky note aimed at the “policy plonkers in Australia who seem to think that the prospects of a budget deficit over the next year or so is an economic policy problem, failure of government or an unwelcome development.”

The case for a substantial fiscal easing is strong, even if that means the Budget falls into deficit by 2 or even 3% of GDP.

It would be dumb to try to keep the Budget in surplus at a time of weak growth and rising unemployment. Postponing tax cuts and cutting spending in these circumstances is as foolhardy as the policy platform of Howard and Costello in their last few years in government, but in the opposite direction.

If indeed, the economy is as bad as it looks, embrace a Budget deficit, spend up to limit the inevitable human misery that a recession inevitably brings and manage fiscal policy in a counter cyclical way.

Turnbull, however, was busy creating a straw man out of the deficit, repeatedly insisting he wouldn’t give the Government a “leave pass” to go into deficit.

Given Rudd, Swan and Tanner won’t even say the damn word, it’s a bit hard to see how they’re asking for anyone’s permission.

No one asked Turnbull whether it would be economic incompetence if the budget went into deficit as a consequence of the economy slowing even more than forecast. In such circumstances, the only way to avoid a deficit would be to cut spending. Which wouldn’t help our prospects of coming out of a recession quickly.

Not that it was a vintage performance from Turnbull during the Q&A either. He foolishly criticised the Prime Minister for not answering questions in Parliament, while refusing three times to answer simple questions about whether the Coalition supported individual employment contracts.

The Coalition’s tactics on the new IR bill aside, things have come to a pretty poor state if the conservative side of politics won’t admit to supporting individual contracts, even for high-income earners. Are they that cowed by Julia Gillard that they’re abandoning the most basic tenets of Liberalism?

The best question was asked by Laura Tingle. She instantly spotted the contradiction between Turnbull defending his attitude toward inflation earlier in the year — it was okay for inflation to move above and below the Reserve Bank’s band over the course of the economic cycle, but not okay for the budget to go into deficit at a point during the economic cycle. Turnbull insisted on interrupting her question with a several-minute explanation of his views on inflation. Whether it was an attempt to patronise or humiliate, it didn’t work, because Tingle stood there patiently and then asked him to explain the contradiction. Turnbull insisted that she was really asking him to give Kevin Rudd a “leave pass” to go into deficit.

It wasn’t Turnbull’s finest performance. Still, long ways to go yet.

Peter Fray

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