Malcolm Turnbull will make the transitioning economy central to this year's election

Photo: Dean Lewins/ Getty.

We’re getting a clearer picture of Malcolm Turnbull’s election platform. He will sell the Coalition as best-positioned to manage the transition in the economy, while painting Labor as stuck in an industrial-age, union-captive mindset with no plan for dealing with turbulent nature of Australia’s current economic reality.

Here’s the PM laying it out to the Victorian division of the Liberal Party on the weekend:

… we are at a pivotal moment in our history as we transition from an economy that has been fired up by an unprecedented mining construction boom as we transition to the new economy of the 21st century.

In this election year, there is only one central issue – whether we complete our transition to the new economy or we allow Labor to kill off that opportunity. This transition is one I’ve consistently talked about for years. It is clear that in order to succeed, in order to remain a high wage, generous social welfare net, first world economy, we need to be more innovative, more competitive, more productive.

It is that transition which will deliver our children and grandchildren the great jobs they deserve not just today, but tomorrow and for years to come. This is the most exciting time to be an Australian. The opportunities have indeed never been greater, but success is not guaranteed. That is why we are directing every lever of government to ensuring Australians can make that successful transition. That is what the next election will be all about. Who do the people trust to steer the course to a secure, prosperous and exciting future?

There are echoes of John Howard here, who famously declared in 2004: “This election, ladies and gentlemen, will be about trust.” It shocked some observers at the time, because Howard was seen as somehow complicit in the deceit over Saddam Hussein’s weapons arsenal that western intelligence agencies helped use to build the case for going to war.

He recognised, however, that Australians would recognise his steady hand in other areas. “Who do you trust to keep the economy strong, and protect family living standards?” he continued. “Who do you trust to keep interest rates low? Who do you trust to lead the fight on Australia’s behalf against international terrorism?”

The big difference of course is that Howard was running on his record as prime minister. Turnbull doesn’t really have one to speak of, yet. He has only been prime minister for eight months, is yet to deliver a budget, and in that time has engaged in an extraordinarily confusing commentary on taxation reform.

But Turnbull, now clearly in campaign mode, is moving quickly to set out some demarcation between the Coalition and Labor on issues people can grasp. There are the construction industry reforms, which Turnbull has set down as the trigger for a double dissolution if they are not passed when Parliament returns next week. And on Sunday he announced plans to abolish the Road Safety ­Remuneration Tribunal – which fixes the pay rates of truck drivers and was set up by Bill Shorten – because independent operators are concerned that new mandated pay rates are going to send them broke. The tribunal is strongly supported by the Transport Workers Union.

Bill Shorten, meanwhile, is shaping up to paint the Coalition as cosy with big business, promising a royal commission into the banking industry, depicting Turnbull as “Tony Abbott in a top hat”, and promising to overhaul negative gearing to reduce its attractiveness as a tax shelter for the wealthy.

This could get complicated

As Joe Hockey learned the hard way – through having to write down the revenue projections for the federal budget over and over again – talking a big game on economic growth in the current environment is simply not very smart. Turnbull and his treasurer Scott Morrison have been trying to change the discussion here, dramatically revising the growth outlook downwards and lowballing the price forecast for iron ore. Morrison’s appearance at the National Press Club in February was much maligned (including here) for failing to provide any clarity or direction on the Turnbull government’s plans for taxation reform. But it did lay out a detailed explanation of the challenges facing the Australian economy in the macro environment. This was something the Abbott government never fully seemed to grasp: that conditions can turn against you and upend your budget plans. Morrison has been trying to address this by abandoning talk of surpluses and referring instead to spending restraint and deficit reduction.

Morgan Stanley analysts Jessica Liang and Charles Rubenfeld said in a recent note to clients that they “do not believe the Australian economy has turned the corner and expect more weakness ahead”, and they are not alone in this view. While the last quarter’s GDP figures showed the economy growing at a very healthy clip, the outlook remains fragile. The Australian dollar, which has been driving a boom in tourism and other export sectors, has reversed its fall. The RBA, in a wonderful flourish of understatement, noted in its interest rate decision this month that the currency’s stubborn reversal had the potential to “complicate” the transition. Add in a few months of bad results in the jobs data and a continuation of the recent trade numbers and the whole premise that the Turnbull government is managing the transition could be severely challenged.

The apparent tensions and miscommunications between Turnbull and Morrison over the past month are a significant risk, too. For a plan to manage the economic transition to succeed, surely one of the most important elements is that the treasurer has to know about it.

It’s three weeks to the budget, traditionally the period of leak after leak as the government seeks to own the media cycle, so there should be some meat coming on the bones in the coming weeks. But Turnbull’s basic plan is already clear to see.

I’m on Twitter: @colgo

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