Turnbull returns to economy, seeks Labor support for Budget repair – August 2016

Filed under: Economy and Finance, Economy, Politics, Budget, Foreign Affairs,

Prime Minister Malcolm Turnbull says preliminary discussions have already begun on trading arrangements with Britain when it leaves the European Union. But he says that departure is still “some years” away.

Mr Turnbull disclosed these developments in a speech to the Committee for Economic Development of Australia – his first major economic address since the July 2 election. The speech was his first broad outline of the Government’s economic agenda since it was re-elected.

However, the biggest news from the event was a well-organised protest calling for the closure of the Nauru and Manus Island detention centres, with one poster-wielding protester making it onto the stage within a few metres of the Prime Minister.

Mr Turnbull was forced to stop speaking for a few minutes until security officials dealt with the situation.

As to the speech, leading economist Saul Eslake, now Vice-Chancellor’s Fellow at the University of Tasmania, said it “was, in most respects, the kind of speech one might have expected from a leader who had won [the election] with a comfortable margin.

“He sounded like a prime minister whose campaign agenda had won widespread support, and who had been rewarded with a significantly increased parliamentary majority.

“In reality, he has more in common with the Bahamas’ Shaunae Miller, the runner who only just fell across the line to win her race at the Rio Olympics. Turnbull won, but only just, and his election result leaves him with diminished authority both within his own party and within the parliament.”

Mr Turnbull said that with the composition of the new Senate now clear, “I and my ministers are engaging with all the crossbenchers with the aim of securing support for a sound and responsible policy approach that will better secure Australia’s economy.

“This is not, and should not be about ideology. The objects of our plan should be supported by all parties.”

He said the Coalition continued to work hard on free trade agreements with India and Indonesia.

“We continue to seek to open new doors to trade and investment, because expanding exports to the large markets in our region or globally will deliver massive new opportunities for stronger economic growth and jobs here in Australia.

“It is in that regard vitally important that we keep an unrelenting focus on the policies to re-energise global economic growth. We have to work even harder to maintain the momentum behind open markets and free trade, which is why we will press hard for ratification and implementation of the Trans Pacific Partnership of 12 of the world’s leading trading nations.

“Britain’s vote to leave the European Union creates the need for Australia to renegotiate important trade deals with the United Kingdom.

“Following my discussion with the new British Prime Minister, Theresa May, our respective trade ministers have begun exploring avenues and arrangements to increase trade and investment in preparation for Britain’s exit from the EU some years hence.

“Nobody should underestimate the importance of this moment as a test of the capacity of our political system to make the right calls on the nation’s behalf.”

Mr Turnbull said, “While we recognise that these times offer extraordinary opportunities for Australians, the changes they bring with them will not always be welcome … We cannot assume that the rising tide of economic growth will lift all boats – we have to make sure that it does.”

But writing in The Conversation Mr Eslake said, “But there was no tangible signal that, as a result of having recognised these things and having reflected on them in the weeks since the result of the election became clear, the prime minister and his government have heard the message from the electorate. There was no clear sign he intends to do anything different, or differently, from what they proposed beforehand.

“Rather, Turnbull expects others to change. He wants the Labor opposition and the crossbenchers in the Senate to move away from the positions they took to the voters at last month’s election.

“It makes sense for Turnbull to seek to capitalise on Labor’s belated willingness to accept some of the savings measures from the 2014 budget, which it had opposed up until the last two weeks of the election campaign.

“Turnbull said today that, “In the upcoming sittings, we will introduce an omnibus bill that puts together all the government’s savings measures that we understand from the election campaign the ALP is prepared to support.

“Labor ought to support this omnibus bill, but if the budget repair task is as important as Turnbull said it was, and if he is truly ready to “reach across the aisle” in pursuit of “fiscal rationality”, he should be willing to take up some of Labor’s pre-election budget repair proposals too.

“Labor’s proposal to reduce the capital gains tax discount (which even the Property Council of Australia is open to changing) could make the ideal starting point.

“Turnbull signalled an undiminished determination to enact the ten-year program of reductions in the company tax rate, which was the centrepiece of the Coalition’s plan for “jobs and growth”.

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