NSW Premier Gladys Berejiklian and Prime Minister Scott Morrison (Image: AAP/Dean Lewins)

At the NSW Liberals’ election launch yesterday, Prime Minister Scott Morrison — who hails from Cronulla (well, Bronte, but anyway) and who used to be the party’s state director — sat silent while Gladys Berejiklian tried to revive her campaign. Polling in the Sunday papers showed her government trailing 51-49. That’s not enough for NSW Labor to win, but it’s utterly shocking given this should be an unloseable campaign for the Liberals.

It’s just as well that Morrison kept quiet (in contrast to Bill Shorten, who fired up the Labor faithful at Michael Daley’s launch across town). It was only a few days since the Prime Minister had smirkingly celebrated International Women’s Day by declaring women shouldn’t get ahead at the expense of men. Not a good look for a female premier.

But Morrison haunts Berejiklian in a way that can’t be hidden through any amount of stagecraft. The removal of Malcolm Turnbull last August was a savage blow to the NSW Liberals, and Morrison has been a dead weight on them ever since. How do we know? There’s hard evidence.

We know that last week’s December quarter national accounts showed economic growth slowing from a total 1.9% in the first two quarters to a total of 0.5% in the September and December quarters. But there was also a sharp slowdown in consumer spending in 2018. And it starts in August — the month Morrison replaced Turnbull. 

Last week’s retail sales data from the ABS shows sales rose 0.1% in January (seasonally adjusted) from December and 2.7% over the year. But that obscures the dramatic slowdown during 2018: the annualised rate of growth of 3.4% for the February-July period slumped to an annualised rate of just 2% for the period from August to January this year. The step down in August is particularly noticeable in the trend sales figures.

But the slide was worse in NSW, which accounts for 28% of national retail sales. Retail sales in NSW slid from an annual rate of growth 5% in the six months to July 2018 to an annual 0.6% in the six months to January. In fact, the seasonally adjusted value of sales in January in NSW ($8.68 billion) was lower than in July of last year ($8.72 billion). In other states like Victoria and Western Australia, retail sales slowed over the same period but January sales volumes were still higher than the previous July. 

It’s true that house prices have fallen faster in Sydney than elsewhere — though prices in Victoria have fallen by nearly as much, without the same fall in retail spending. But unemployment is also much lower in NSW than anywhere else — at 3.9%, currently. And none of that explains why August marks the start of flat or declining retail sales in our biggest state. In trend terms, the last time there was a rise in retail spending in NSW was in July before Turnbull was ousted.

The slowing of the national economy in the second half of 2018 can’t all be pinned on Morrison, of course. But NSW voters evidently were underwhelmed with the removal of Turnbull in August. Very likely Peter Dutton would have made the situation dramatically worse. But Scott Morrison has failed to address the deep uncertainty created by the ouster of his predecessor, despite buoyant economic times in his home state.

Perhaps that’s because NSW voters know him better than voters elsewhere. Either way, he’s bad news for Gladys Berejiklian and a competent government facing a remarkable defeat.