How Turnbull lost control

Late on the night of September 14, 2015, Malcolm Turnbull, fresh from defeating Tony Abbott for the prime ministership, arrived in the Blue Room at Parliament House, flanked by a smiling Julie Bishop. Turnbull was ebullient and eloquent. “This will be a thoroughly Liberal government,” he promised.

It will be a thoroughly Liberal Government committed to freedom, the individual and the market. It will be focussed on ensuring that in the years ahead, as the world becomes more and more competitive, and greater opportunities arise, we are able to take advantage of that. The Australia of the future has to be a nation that is agile, that is innovative, that is creative.

It was never to be. The reality would be the least Liberal, or liberal, government in decades, one in which mentions of agility and innovation would become first jokes, then banished altogether as a reminder of how the promise of that night had been squandered. And just as with Abbott, and Julia Gillard, and Kevin Rudd, the happy confidence of victory night would give way, in three years or less, to the bitterness of betrayal and another Prime Ministerial departure.

Turnbull returned to the Liberal leadership in 2015 not merely because of Abbott’s disastrous prime ministership and “30 Newspolls in a row”, but because he offered an old idea of leadership — the kind of leader last seen in the Hawke-Keating years and the first two Howard terms. As he explained the afternoon of the challenge:

We need a style of leadership that explains those challenges and opportunities; explains the challenges and how to seize the opportunities. A style of leadership that respects the peoples’ intelligence, that explains these complex issues, and then sets out the course of action we believe we should take, and makes a case for it. We need advocacy, not slogans. We need to respect the intelligence of the Australian people.

Turnbull had long been urging this kind of leadership: over a year earlier, he had articulated a philosophy of reform leadership involving a four-stage process of explaining and verifying the problem, offering the solution and doing so coherently and fairly. The perceived dearth of economic leadership under Abbott had so vexed the governing class that an economic reform summit had been convened just a month before his ousting by the two national newspapers. Turnbull’s ascension seemed to be the answer to a collective national prayer.

He was partly brought undone because the problem with “economic reform” wasn’t the lack of leadership, but that the electorate was growing more and more hostile to the whole agenda. They saw in it a vast scam in which corporations and the well-connected grew richer while they marked time (at best). If the likes of The Australian and the AFR, and Australian business, believed that Australia needed more tax reform (a higher GST and lower company tax), more industrial relations deregulation and cuts to government spending, voters saw only a continuation of the low wages growth that had set in after Abbott was elected, cuts to services and giant corporations getting away with avoiding tax. And they knew that in two key areas, financial services and energy, they were being ripped off by powerful companies that paid little more than pro forma deference to the alleged “regulators” of those industries.

Turnbull was blindsided by this electoral shift against neoliberalism. His entire agenda was neoliberal — the Australian economy would be stripped down for competition; we would embrace change, seize the advantages of being on the edge of the most dynamic region in the world. A thousand start-ups would bloom; a more confident Australian business sector would take on the world, with the electorate convinced of the need for difficult change by being treated as a thoughtful interlocutor in the political process led by a man who, more than any parliamentarian since Keating, spoke with eloquence, grace and intelligence (his parliamentary eulogies of Bob Hughes and Gough were superb).

But that plan didn’t survive contact with the enemy, especially on tax. Labor wasn’t going to play Turnbull’s “respect the intelligence” game in areas like the GST. And it was going to produce its own tax policies, making Turnbull look reactive. Lifting the GST rate — a favoured approach of business, which saw it as the way to pay for lower company taxes — proved problematic: by the time compensation was factored in, there was too little benefit for the political risk. When Turnbull eventually produced a tax reform package, it was barely worth the name — just a massive company tax cut, backend-loaded a decade hence. For a while Turnbull couldn’t — or more likely didn’t want to — say what the cost was.

On financial services, Turnbull was again blindsided. A former banker himself, with several former bank executives in his government, he couldn’t grasp how potent the call for a banking royal commission — initiated by the Greens and not adopted until 2015 by Labor — really was. Turnbull actually believed that voters would be worried about the threat to the stability of the financial system from a royal commission, telling western Sydney voters during an election debate “Mr Shorten wants banks in the dock”, then looking mystified when this drew cheers from the audience. 

And while Turnbull managed to fall over the line in the 2016 election, it was already clear that in addition to his own tone deafness around economic issues — allowing Labor to exploit the disaffection toward neoliberalism uncontested — the poor judgement he was known for earlier in his political career (cf. Godwin Grech) remained unabated. Worse, no one on his office, which cycled through three chiefs of staff in less than three years, seemed able to ameliorate it. Stuff-ups became routine. In the second half of 2017, they became more than routine, the whole government became shambolic. No party covered themselves in glory on the citizenship issue — and certainly not Labor — but nor did any party leader stand up in parliament and appear to try to direct how the High Court should rule. Then Barnaby Joyce’s affair exploded in early 2018, resulting in open warfare between Turnbull and his own deputy prime minister.

By this stage, the initial idea of Turnbullian leadership had been long abandoned, along with its keywords. The promised four-step reform process had never even been employed; it was never clear, for example, what critical problem Turnbull’s signature $70 billion company tax cut was needed to address, given record foreign investment and low unemployment.

In other areas, too, Turnbull represented continuity far more than change. If anything, Turnbull accelerated Tony Abbott’s agenda of curbing civil liberties and extending surveillance. Some of the most egregious breaches of civil rights and freedom of expression in recent decades occurred under the one-time Spycatcher Malcolm, a figure that became as irrelevant as the leather-jacketed progressive of Q&A. Whistleblowers, politicians and journalists were hounded by police. Witness K and his lawyer were prosecuted for revealing lawbreaking by ASIS. A critic of Centrelink had private information leaked to smear her. Proposals for draconian secrecy laws, new police powers to demand ID and enhanced powers for security agencies were regularly ushered into parliament. 

And a man prone to being thin-skinned led a thin-skinned government that relentlessly pursued those who embarrassed it — the ABC was cowed and defunded; journalists who did their job well targeted with vexatious complaints, while News Corp was showered with money. While attacking the ABC, Turnbull finally secured the removal of the last of the substantive media ownership restrictions, paving the way for the end of Fairfax and the triumph of Nine under Liberal Party elder Peter Costello.

In some areas, indeed, things went backwards. Progress on Indigenous constitutional recognition — a cause Tony Abbott had embraced — ground to a halt under Turnbull with his dismissive response to the Uluru Statement and his tolerance of the wilful misrepresentation of the statement by racists among conservative ranks.

All the while, the economy had actually been performing well. Commodity prices finally delivered a revenue boost that promised an actual, rather than endlessly delayed, return to surplus. Jobs growth was strong, partly because the government had reversed itself and was pumping more money into health and education. But convincing voters of that was more difficult, partly because Turnbull never took wage stagnation — and its structural causes, anti-union industrial relations laws and overly large corporations — seriously, partly because it was too busy trying to explain the urgent need for company tax cuts to a sceptical electorate. Even so, across 2018, once Barnaby Joyce had been given the flick and Tony Abbott’s destructive antics had come to be seen as mindless undermining, Turnbull recovered in the polls to come within touching distance of Labor.

The pretext of Turnbull’s ousting — that Peter Dutton was needed to halt the loss of votes from the right of the party to One Nation — was richly ironic. It was Turnbull who had breathed new life into One Nation with his double dissolution election. And under Turnbull, the Liberals had adopted ever more populist policies — belatedly embracing defence protectionism, intervening in gas and electricity markets, even succumbing to not merely a royal commission into the banks but a banking super-profits tax and setting up a One Nation-led inquiry into banks in the bush.

Illiberal on freedom, un-Liberal economically, Turnbull’s government never matched the promise of September 14, 2015, just as Turnbull himself never matched the idea of leadership he advocated. Long an advocate of governing from the centre, Turnbull found a way to fail at that: his prime ministership ended up being, at the urgings of the right, the most interventionist government in decades but he was simultaneously not reactionary enough for the right and too hostage to it for progressives. The enduring perception will be that the real Malcolm Turnbull, the idea of Turnbull that we all had in that spring of 2015, was never really permitted to lead. But the suspicion will be, this was the real Turnbull, and he just wasn’t particularly good.