Malcolm Turnbull's epic to-do list: threats that could also make him a great PM

Malcolm Turnbull was sworn in today as Australia’s 29th prime minister.

It’s never an easy job but the manner in which he seized it, deposing Tony Abbott through a leadership coup – as well as some of Turnbull’s peculiar character traits and his earlier political record – means he has some incredibly tough assignments ahead.

Here’s a run-down of some of the things he has to tackle.

Appease his personal base

As “the left’s favourite Liberal”, Turnbull will need to ensure that he delivers on his promise of repositioning the Liberal Party on issues such as environmental policy, same-sex marriage, and the prospect of a republic. Failing to do so would leave room for the Labor movement to cast him as Abbott-lite, and put at risk the potential electoral gains among urban voters. This is probably the easiest part, as it will come naturally to him.

Manage the fury of conservatives to his right

Andrew Bolt and other conservative commentators are apoplectic. Bolt today:

Here’s Turnbull’s challenge in a nutshell: he stole the prime ministership he could not have won in an election.

He stole it by boasting of superior communication skills he does not have.

He will now campaign on successes by Abbott he could not have achieved himself.

And he will now be the leader of a party he cannot unite…

Whether Turnbull wins the next election or loses, conservative Liberals will feel they have lost already, now that a man of such “progressive” views has snatched the leadership of their party.

The challenge for any Liberal Party leader is being able to straddle both the conservative and small-l liberal traditions in the party so that they don’t have to keep looking over their shoulder. Turnbull’s defiance of the conservative wing of the party was his undoing in 2009 when he insisted on backing Kevin Rudd’s emissions trading scheme.

What helps Turnbull with centrists and the left hurts him with the right. The visceral reaction to Turnbull’s ousting of Abbott will, if left to fester, mean the attacks on his leadership from the right will simply run and run.

Actually do something about business confidence

NAB survey – business confidence

In declaring he was challenging Abbott, Turnbull said: “Ultimately, the Prime Minister has not been capable of providing the economic leadership our nation needs; he has not been capable of providing the economic confidence that business needs.”

Improving business confidence is a risky KPI to set yourself. It is vulnerable to huge falls attributable to external shocks. A continuing deterioration of the China outlook on the lines we have seen in recent months, for example, could put Turnbull in an impossible situation.

The survey to watch how Turnbull is tracking on this is the NAB monthly business survey, usually released on the second Tuesday of each month. The survey also tracks business conditions, which is about what businesses are seeing on the ground but is not to be confused with confidence, which is what businesses see coming down the track. While conditions have been surging lately, confidence has actually fallen.

How can you fix something as ephemeral as confidence? It’s like the economic equivalent of dem feelz. Some economists have pointed to Turnbull’s negotiating ability as central to his ability to turn things around, and if he does secure public and Senate support for some reforms then this might show the business sector that he can deliver what he promises. And this would help.

Confidence has been the missing ingredient in the Australian economy for a long time. At the start of this year, the Cabinet was warned in an extraordinary briefing from the heads of Treasury and the RBA that low confidence was holding the economy back.

Pick a treasurer and devise a budget strategy

The treasurer is likely to be Scott Morrison, who hedged his bets in the leadership vote by refusing to stand as deputy with either Abbott or Turnbull. The structural problems in the budget remain significant and, in case it was lost on anyone how important government spending is to overall economic growth, the economy would have turned in a negative GDP number last quarter if it hadn’t been for public spending.

One way to look at it is that with private-sector growth turning anaemic over the past two years, the economy is relying on Canberra not cutting too hard, too fast to avoid tipping into recession. So fixing the budget requires some very tough decisions indeed.

Allowing debt to balloon out would be a disaster, so some spending discipline is required. Perhaps this is where Turnbull, with Morrison as treasurer, might be able to use their combined skills to shift the budget debate away from “debt and deficit” to fiscal common sense. Yet spending cuts are still needed and the ageing population will require more welfare and health spending.

I’ll just leave that one there.

Deal with the Nationals

Turnbull needs to ensure that the Liberal-National Coalition remains intact. He will face a fight here on media reform, with the Nationals deeply opposed to any media ownership reforms that could lead to reductions in the provision of regional news content. This means managing both the media companies and the Nationals – two very different constituencies.

Pick a ministry that rewards his backers but doesn’t enrage his enemies

Turnbull has complete control over the makeup of his cabinet and will have to live with the consequences of his ministerial appointments – we’re expecting them at the end of the week – for a long time to come. It’s potentially the team he will take to the next election so it needs to be politically acceptable for voters while balancing the expectations of party powerbrokers, at a time when the air is still thick with treachery. A miscalculation in an appointment – either putting someone into a job who is not ready, or snubbing someone talented and powerful – has the potential to do to Turnbull what he himself did to Abbott: running interference and distracting the government.

Figure out how win the next election

It’s all for very little if Turnbull can’t get figure out a plan to beat Labor and retain power at the next election. Expect a bounce in preferred prime minister polls in the weeks ahead, but as Kevin Rudd knows all too well, popularity doesn’t last long.

Deliver on his grand statements about startups and disruption while not neglecting the rest of the business sector

“This is the most exciting time to be an Australian,” Turnbull said this morning. He talked about the “opportunities” in the new globalised world that “will ensure our prosperity in the years ahead”. He has talked about embracing the digital disruption and set out a vision for a modern, diversified economy that is ready for the challenges of the 21st century.

Tech CEOs today told Business Insider how “Malcolm Turnbull has said he wants Australia to be creative, innovative and agile. In my opinion, this is the sort of vision that Australia needs,” was a typical sentiment, from DesignCrowd founder Alec Lynch. Senior Australian technology services industry leaders have been growing increasingly despondent at the absence of a policy framework that fosters and encourages the development of high-growth technology-based companies.

At the same time, the industry is only a tiny fraction of the economy and Turnbull has to be careful not to be seen as a champion only of startups – sectors like healthcare, tourism and education will be the driving forces of Australia’s economic growth in the medium term and watching carefully, and have loud, well-established voices that will be heard if they’re not happy.

Have some awkward phone calls with foreign leaders

“The Australian Prime Minister on the line for you.”

“Tony!”

“No, my name is Malcolm Turnbull. Let me explain…”

This is an unenviable list. But if he gets through it – and Turnbull will be confident he can – it sets a platform for greatness.

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