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Australia: Why We Now Have Prime Minister Turnbull

Economic literacy apparently matters in high-stakes politics.

September 17, 2015

Economic literacy apparently matters in high-stakes politics.

Australia has just changed Prime Ministers — again for the fifth time in five years. This time, as happened a few years ago, when Kevin Rudd was toppled by Julia Gillard, who then took over from her again briefly a few years later, within the same political party.

Only this time, it’s Australia’s conservative party – which, confusing to non-Australians, is called the “Liberal Party” — that’s doing the duking out within its ranks.

But there’s a twist. The new Prime Minister, Malcolm Turnbull, who toppled the old one, Tony Abbott, operates on the basis of a different political philosophy, or so it seems.

That is why it is fair to say this: Yesterday, we Australians had a conservative government – and today, we have a liberal one.

One reason the challenger Malcolm Turnbull was successful in toppling the incumbent Prime Minister Tony Abbott was economics, or so the victor claims.

The appropriately named Malcolm Turnbull(!), in his assault before the spill, claimed that a political leader must always have an economic narrative, a story to tell and to explain to the public at large (again and again, until it is understood).

A “turnbull” in action

In short, Turnbull claimed, leadership is about advocacy — not relying on three-word slogans. Indeed, the outgoing Prime Minister Abbott’s inability to answer an ABC TV journalist’s seemingly straightforward questions on Australian economic performance (which he curiously responded to with “we stopped the boats”) helped trigger the chain of events that cost Abbott the nation’s top job.

Malcolm Turnbull is a divisive figure who, as a brilliant young barrister, slaughtered the British in court in the famous spy catcher case. He later worked for Goldman Sachs and was an Internet entrepreneur.

Turnbull also led the Australian Republican movement, campaigning to sever Australia’s ties with the British crown. His monarchist opponents, including Tony Abbott, described the republicans as no less than the “Turnbullies.”

He was once Liberal leader before, but while the party was in opposition, he lost his job to Abbott in a dispute over climate change.

But Turnbull is considered to be good at debating economics and business issues. In effect, it was his lack of grasping economics, or lack of interest in economics, that killed off Turnbull’s key rival Tony Abbott, the incumbent prime minister, just two years after he was elected with a comfortable majority.

In addition to having a prime minister disinterested in economics, we Australians have had to cope with a Treasurer making gaffes about poor people not driving cars and other niceties.

Getting serious again?

Maybe with the ascendancy of Malcolm Turnbull, Australia’s politicians will take economics seriously again. One must surely hope that Australians can avoid the anti-economics, anti-intellectual populism – whether in the style of the British left (under Jeremy Corbyn) or the American right (under Donald Trump).

The hope is that Turnbull will put market mechanisms and incentives back into climate change policy — instead of handing money to rent-seeking polluters, as Abbott did.

A more nuanced stance on industrial relations between capital and labor inside the country and embracing the Asian century in terms of trade and investment outside could help Turnbull raise living standards and productivity.

Turnbull could even use economic advocacy in other social and constitutional issues like gay marriage and the republic. For example, he could ask why our supposed head of state (or, by proxy, Prince Andrew) lobbies for British exports and contracts against Australia in China and other countries in Asia?

My colleague Richard Holden and I had suggested in February that the embattled Tony Abbott should make Malcolm Turnbull Treasurer. He didn’t — and now Turnbull has done him one better.

He has made economic credibility and his ability to explain economics to the country the cornerstone of his Prime Ministership. He is right on that because all political leaders — Liberal, Labor and, yes, even the Greens — need economic literacy and competence to succeed to chart Australia’s way in increasingly complex global waters.

Now, it is in Malcolm Turnbull’s hands to make this promise a reality. Let us hope he lives up to his promises.


Australia’s new leader worked for Goldman Sachs and wants to sever ties with the British crown.

It is hard to hold on to the post of Prime Minister in Australia. Your colleagues will topple you.

Yesterday, we Australians had a conservative government – and today we have a liberal one.

Turnbull can put market mechanisms and incentives back into Australia’s climate change policy.