Corporate Australia is the big loser from the Liberal leadership uncertainty because of the collateral damage to its reputation. To shore up his position Malcolm Turnbull has not just abandoned his emissions target but rounded on business in an unprecedented way.
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The rhetoric sounds like what might be expected from Labor or the Greens, or perhaps some wilder members of the Nationals, but not from the so-called party of capital, the Liberal Party.
First it was the big banks and insurance companies. Now it is the big energy companies. Self-interested. Can’t be trusted. Willing to gouge customers and clients. Willing to flout regulatory commitments. At Turnbull’s behest the Treasurer Scott Morrison, waving a big stick, has painted a dire picture of the values and morals driving big business as he tried to convince Australians that the government’s new ‘first priority’ was to drive down electricity prices.
Just as the Banking and Financial Services Royal Commission under Justice Kenneth Hayne has destroyed the reputation of the big financial institutions by revealing a culture of "get away with what you can" and a mentality of ripping off customers to boost profits, so Morrison made clear that the same applied to energy companies where dud deals and opaque pricing was the norm. The ethics of the retail market and not clean energy bore the brunt of his criticism.
The Turnbull government has demonstrated, after initially defending the big four banks and opposing the calls for a Royal Commission, that they now see corporate Australia not as its natural allies in the search for the public interest but as profit-seekers who must be corralled and then bludgeoned into submission to achieve a fair result. The government has thrown big business overboard.
Whether or not all of this is just for short-term public display remains to be seen. After all the social, political and economic links remain strong between leading Coalition members and the business community. They are natural allies to the extent of being like family. Many of them talk the same ‘merchant banker’ talk about the economy that Tony Abbott has recently condemned as pompous gobbledegook.
There is also the huge inconsistency that the Turnbull government's signature approach to corporate tax cuts, dropped for the biggest companies yesterday but not resiled from in theory, presupposes that what is good for business is good for Australia. The guiding idea of trickle-down economics is that the proposed tax cuts will inevitably result in more jobs and higher wages as part of economic growth. In other words, that the average Australian will benefit. While not necessarily relying on business good-will but on the abstract theory of the capitalist system the idea is at odds with this new critical picture of what drives the big banks and energy companies which is now being painted so vividly by the government.
Another lesson from the leadership instability relates to the exercise of leverage in politics. Whether it be voters or MPs small numbers can make a difference if they are driven by intense single-mindedness. Just as voters who are willing to swap parties on an issue can be effective so can small numbers of MPs who are willing to cross the floor.
In the context of an evenly balanced House of Representatives, the threat to cross the floor by those few conservative Coalition MPS who objected to the emissions component of the National Energy Guarantee forced Turnbull to back down. In the absence of bipartisanship between the government and the opposition the outcome was far more conservative than the centre of gravity of the Parliament as a whole. Labor and the Greens, which wanted a higher target for a cut in emissions in accord with the Paris Agreement, lost out to the minority of the Coalition which wanted no emissions target at all.
Turnbull was handicapped in seeking bipartisanship by his image within his own party of being a moderate. Bill Shorten and Richard di Natale blame Turnbull for not seeking to build a moderate alliance on climate change, but they too must share some of the blame. Lack of cooperation between parties is a weakness of the Australian political system.
Should Turnbull lose the leadership and the Coalition government move to the right under Peter Dutton then the contested notion that a more conservative Coalition would be more popular will be tested. This has been an untested undercurrent since the Coalition returned to office in 2013 under Abbott. Both Abbott and Turnbull supporters believe that their man is more popular than the other with the general electorate.
Abbott was deposed because Turnbull was thought to be more popular with swinging moderate voters. On the other hand, dissident Liberals believe that Turnbull has lost the party’s ‘conservative base’ and that the government can now only be returned by appealing to the ideals represented by One Nation voters. The Longman by-election result is cited as a case in point.
If Dutton does become Prime Minister the contest with Labor will be sharpened and the next federal election result will reveal where the Australian community really sits on issues like immigration, climate change and taxation. The choice between conservative and progressive positions will be much clearer.
The so-called conservative base will be revealed to owe much more to the sort of interventionist conservatism practised by the Nationals than to the free market conservatism of the traditional Liberals. It is a conservatism which can countenance new coal mines largely sponsored or even owned by government. It is also a conservatism that is not only anti-immigration and anti-multiculturalism but one which is much more suspicious of big business and the market economy.
John Warhurst is an Emeritus Professor of Political Science at the Australian National University
