Malcolm Turnbull

If Malcolm Turnbull was still Prime Minister, there’s a good chance he’d be heading to the polls right now, despite the Victorian election. He could have called an election for December 8, conscious that at best he only had a small gap in the polls to make up — or perhaps the government might have finally drawn even in Newspoll by now. But most of all, he would have had a strong wind of economic and fiscal news behind him

The Reserve Bank will confirm both the strength of the economy and monetary policy stability at its meeting tomorrow, which will see interest rates on hold (and most likely until well into 2019 and perhaps 2020). Friday will see the bank’s 4th Statement on Monetary Policy released with higher growth forecasts and better than expected figures for unemployment and inflation. 

Turnbull would have known that next week’s October jobs report would confirm that Australia’s jobs boom continues, albeit slower than in 2017. It’s true that the Wage Price Index for the September quarter, also out next week, won’t be good news. But even there, the boost from the 3.5% national wage decision by the Fair Work Commission (which the government opposed) will help, with some of the lesser journalistic lights parroting the well-worn “turned the corner” line. And to top it all off the, September national accounts on December 5, right before the election, will confirm growth remains at or above 3%.

Last week would have also confirmed that now is the time to sprint to the polls. We learned that September’s trade surplus hit a surprise $3 billion off solid (and rising) prices for iron ore, coal and LNG, boosted by the favourable impact of the falling dollar. Economists reckon the trade surplus for the September quarter could add 0.2 percentage points to GDP. The Reserve Bank’s Commodity Price Index — a proxy for our terms of trade — showed the resources boom had returned with the index hitting a near six year high in October and up 22.3% in the past year. This was backed up by figures from the Australian Bureau of Statistics on export and import indices that showed export prices for the September quarter jumped 3.7%  while import values climbed 1.9%.

That points to an improvement in our terms of trade of around 1.8% on a preliminary basis for the September quarter.

That all translates into a flood of revenue into government coffers or, to use Paul Keating’s phrase, the Liberals have once again been hit in the arse by a rainbow from the extractive industries, with revenues running billions of dollars ahead of estimates. That’s why the government is constantly going to the ATM to announce new handouts — like last week’s lazy half a billion over ten years to expand the War Memorial.

Imagine that cash being directed to marginal seats. It would have made the perfect platform for a government seeking re-election.

Instead, Turnbull will this week be the centre of attention for another reason — a special edition of Q&A on Thursday night where he can defend his record and, almost certainly, deliver an almighty serve to the traitors, wreckers and fools in the Liberal partyroom who have almost certainly deprived themselves of a third term in government.

For all his many faults, Turnbull managed — especially once he’d gotten rid of the appalling Barnaby Joyce — to get his government back to near-level pegging with Labor despite everything. He had a good chance of securing what would have been a sweet victory indeed, possibly one that would have ended Australia’s revolving door Prime Ministership and given us some stability.

But his colleagues had different, and far more stupid, ideas.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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