So Long Malcolm, Feels Like We Hardly Knew You…
Unless things change suddenly and dramatically, we are in the last year of the Turnbull Government and probably Liberal leadership for a while.
There hasn’t been an announcement, no press release has been issued from any campaign bunker, but make no mistake, the election race is on.
Labor is running – basically on the idea of income inequality (rightly so) and they are going to win.
Working in the inference business at CoreData, it’s my job to take large amounts of small data and build a narrative with them, from which people who are making real decisions can make real bets with.
And for the Liberal Party, the narrative is the problem. There are few pleasures in working in a research business but one of them is that you can, when the mood takes you, do research about things that interest you.
Over the last month, here’s what interested me — does the Australian population (specifically the 30 per cent that don’t make a defined decision about how they vote) think they understand what the Turnbull Government is trying to achieve in the areas of (in order): the economy, education, health and national security?
Turns out they don’t.
Less than 12 per cent of those surveyed claimed to understand what the Government was trying to achieve.
You should note, I didn’t ask them if they liked the principles or not, I asked them if they had regular voting intentions and if they understood in broad terms, the goal of the Liberal party in those areas mentioned above.
They didn’t. Meaning the Liberals under Turnbull and Morrison have lost control of their narrative, so unless they get it back on track, it’s going to be really, really hard for them to get elected.
Just like me, the Liberal Party are capable of running polls which is why they are now fighting with each other. Why Tony Abbott, in what he must know is a highly destructive act, has launched his own bid for leadership.
He hasn’t said so of course, but he is suggesting alternative policies, launching his own manifesto and is generally making a pain of himself. I mean what a muppet, what a wrecker. Now the liberals don’t just get to worry about the big ideas they have to run, they have to worry about the ghost of Tony.
The research makes me 70 per cent sure that Turnbull has lost Government and that the next available election trigger will be used by the Labor Party. If an election is held with the figures as they currently stand, the Liberals will lose.
So in broad terms, here is how this is going to go:
The Labor party will go into the election on three platforms: income equality (they will bring back penalty rates), housing affordability and a sense of economic justice, targeting factors like SMSF’s and Trusts.
Labor will fight the Liberal Government hard in the marginal seats on the city fringes stating they alone will make housing affordable again for all Australians. From this, they claim to allow people to access super to buy a house, making lending easier for first home buyers and potentially axing negative gearing.
These things won’t work of course – especially the ones that release more money into the system. They will simply create excess demand the same way the First Home Buyer Bonus did.
But they will win.
They will become a tax and spend Government which will freeze capital in the system, meaning a blow out in Government borrowing and almost guaranteeing a recession in 2019.
So preserve your cash. Assets will become cheap.
No just that, when Labor wins they’ll unleash a series of “get squares” on the Liberal Party which will have long and lasting effects on all Australians.
Trust me on this. If you want to see up close and personal what pettiness and vengeance look like, get involved in politics. The whole righteous idea of self is simply out of control in this industry. All parties are partisan and it’s a belief that drives them.
To avenge the Royal Commission into Construction lead by the Turnbull Government, Labor will launch a Royal Commission into Banking, or at least another enquiry, the second in less than a decade. Does anyone remember the last one lead by David Murray? No. Me either.
But wait for this one, it’s likely to be an absolute cracker. Under review will be financial planning, insurances, superannuation and lending. If you think the cost of regulation on the banks is high now (it’s currently running at about $200 million a bank per year), you can expect that to double.
Add to this the role of the regulators, ASIC and APRA and pin your ears back for some real and wholesale change. Banks will abandon the insurance business and likely the planning business too as they’re risky and unprofitable. So if you’re looking to buy; CBA’s is for sale, ANZ’s is for sale, NAB’s is gone and WEBC must be thinking about it.
We could, if we were sarcastic or difficult, label these the Entsch reforms – after Warren Entsch the long serving and popular MP for Leichhardt, because at the heart of a lot of the media that’s focused energy in these areas – he seems to be the lighting rod.
To be honest, there is a lot to like about Entsch: former welder, farmer and real estate agent turned politician. You’d have to say he’s got a good understanding of what people in Leichhardt want. And apparently they want a review of the CBA. They must right? Entsch has been elected seven times in a row and has more than 30 per cent of the primary vote. Turns out the people of Leichhardt are unhappy with the CBA. Who knew?
Now scrutiny is no bad thing. It’s a good thing that someone picks up the rocks of an oligopoly and shines a light on the beetles running below, because everything is better when it is examined.
I believe Entsch is trying to do good, just as I believe there are people on the Labor Party who would like banking to disappear from wealth management and believe it should be entirely the preserve of large industry funds. There are also people who believe we should embrace the Canadian Model of a small number of very large funds which effectively act as nationalised savings pool for the country.
I have to admit I am a fan of the current system. I like the tension between the industry funds and the retail sector. I think it creates great outcomes for the consumers and if we swing the pendulum too far one way, the loser will be Australian consumers.
So strap in folks, the election campaign has started and Labor is looking to win. There will be an inquiry of some form (possibly a Royal Commission) and banking, superannuation insurance and financial planning will never be the same again.
Farewell Malcolm, I liked you in the same way that I liked Paul Keating and Bob Hawke. You are transparently a smart man with great vision and I really wanted you to be a great Prime Minister, but you just didn’t cut it.
I mean Keating and Hawke ran transformative agendas in the areas of Labor reform, wages reform, savings reform and even social reform and they did it successfully.
A lot of people claim the reforms they implemented weren’t their ideas, but rather those developed under Malcolm Fraser’s leadership. I don’t even remotely care who developed the idea. Like all people I really only care about who did the work. Step forward Bob and Paul, well played.
So Farewell Malcolm, we hardly knew you. Thanks for changing the way we um… Shit Mal, what is it that you did? The NBN? No, that was Rudd. The NDIS? No, Gillard. Lots of new roads? Oh I forgot, that’s the preserve of the States. Gonski 2.0? Nope, Gillard again if we are being honest. C’mon, someone help me out here. The abolition of fees on credit cards? Was that you Mal? It was you! That and the TPP! I like them both but lets face it mate – hardly a slogan you can take to an election.