The success of Malcolm Turnbull and Bill Shorten this year will to a very large extent depend on the performances of their respective Treasurer and shadow treasurer.
For Turnbull success in 2016 has two elements. The first is winning the election — which on current polls he'll do. The second element of success for Turnbull will be for him to demonstrate that he can lead a genuinely reforming government. The jury is still out on whether he can or wants to do so. Beyond the fact that we're being urged to be agile, the philosophical thread of a Turnbull government is at times difficult to discern.
For Shorten in the absence of an election victory, success will be simply to stay within touching distance of the Coalition to ensure Labor is competitive at the election after the next one. Labor's challenge is to demonstrate that it's changed from what it was just a few years ago, and that a Shorten-led government will not be so cavalier with other people's money as were Kevin Rudd and Julia Gillard. Neither Scott Morrison as Treasurer nor Chris Bowen as shadow treasurer are making the task for their leaders any easier.
Morrison and Bowen are both smart, hard-working, and good communicators. But so far both have demonstrated few of those attributes. The way Morrison is running the tax debate seems to guarantee but one outcome — higher taxes. Bowen's achievement as shadow treasurer for the last two years seems to be limited to having written a history book on former Australian treasurers. He's been largely invisible in the public discussion. It would be difficult to know just what Bowen believes.
Sam Dastyari's bashing of multinationals is crass politicking and hugely damaging to the country's reputation as a destination for foreign investment but at least Dastyari displays a degree of enthusiasm for the job. As does Bowen's understudy, the former economics professor Andrew Leigh, whose interventions are invariably considered, well-made, and based on evidence. To be fair Morrison has only been in the job four months. Bowen doesn't have that excuse, and he also was treasurer for nearly three months during Kevin Rudd's last interregnum in 2013.
Morrison's messages have often been confused and contradictory. One day he says he wants lower taxes, and the next he flirts with raising them. He's also remarkably relaxed about the fact that federal government spending is at nearly the same level as during the "unprecedented crisis" of the GFC. Worse, he seems to have convinced himself that government spending can't be cut because "it would undermine consumer confidence". For Bowen or Wayne Swan to believe this is understandable — they both want government to be bigger. But for a Coalition treasurer to repeat such a line is utterly bewildering. Thankfully neither Paul Keating nor Peter Costello ever fell for this Keynesian fallacy.
It's a travesty that at the end of a once-in-a-lifetime economic boom Labor left a federal budget deficit. A bigger travesty would be if the Coalition followed in Labor's footsteps and did nothing about the deficit. The book that Bowen wrote last year, The Money-Men: Australia's 12 Most Notable Treasurers, is not uninteresting. Even though at times he lets his partisanship get in the way, for example his claim that Costello was merely "competent and solid" is laughable, Bowen nevertheless makes an important point about the job of treasurer, and by extension shadow treasurer. "A treasurer must argue internally for politically difficult but necessary economic reforms." At the moment both Morrison and Bowen seem to have picked the easy option.
"Prime ministers will naturally be nervous about these reforms, but a good prime minister-treasurer relationship will see a balance reached. Importantly, a prime minister will feel more comfortable giving a treasurer the authority to embark on economic reforms if they are confident in the treasurer's ability to sell those reforms. As John Howard said to me in 2014: 'A treasurer must be in the media every day. Every day. Making the case for change, being one of the government's most effective communicators'."
Australia needs a vigorous economic debate that's about more than just the best way to raise taxes. It's a debate Morrison and Bowen should be leading.
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