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by Anne Hyland

Malcolm Turnbull loomed large over Australia when he seized the prime ministership from Tony Abbott a little over a year ago. It was incredible how a single event changed the political mood of the country. We considered ourselves, briefly, the lucky country again.

We had a new prime minister, a man of intellect, a businessman whose career had developed largely outside the political bubble. On his shoulders rested the hope that he would bring to an end the decade of dysfunctional politics that had come to characterise Canberra, where power had become confused and diffused. Many dared to believe that his leadership would lift the country out of its mediocrity.

The expectations were huge and arguably unrealistic, some members of The Australian Financial Review Magazine’s 2016 Power panel noted when they gathered at Fairfax Media’s Sydney headquarters mid-year. Such hopes were initially fed by Turnbull himself, who told us this was the most exciting time to be an Australian. It was a remark that has since become a punchline. At first, Turnbull’s grand statement stirred the belief that he would use the most powerful office in the land to lay out an agenda and get the country moving. Everyone from out-of-work miners to university graduates to those managing companies, where business plans depend on policy certainty, watched and waited.

By early 2016 no agenda had appeared that would crank up confidence and investment. Instead there was umming and ahhing on a GST and the date of an election. So the Australian polity slipped back into a mood of scepticism, if not cynicism. The underlying frustration could be summed up as: Where the hell are we going?

“I don’t think Turnbull realised what sort of a mandate he had last September until early in the new year,” observes Tony Mitchelmore, a Power panel member who runs Visibility Consulting, a qualitative research and campaign strategy company. “He had the will of the people with him big time. We’d been through Rudd, Gillard, Rudd and Abbott, and that hadn’t worked out. Then with Turnbull it was: ‘We’ve got someone I can believe in and who will get on with things.’

“There’s a sense amongst everyday Australians that the country is now tanking or stalling and they just want to get on with things. He should have just got on and governed. He could have utilised power in a Mike Baird sort of way to get things done.”

Australians have a stand-and-deliver expectation of their political leaders but as Amanda Vanstone, a former Howard government minister, argues, Turnbull was never going to be able to just get on and govern because of the promise he’d made to run government differently to his divisive predecessor. That is, decisions would be made by the federal cabinet, which is now the biggest since 1975, and not be the kind of “captain’s picks” that defined Tony Abbott’s prime ministership.

“This is the problem with expectations that leaders in the government can just do whatever they want,” says Vanstone. “They can’t. Turnbull said he was going to run a proper cabinet.”

After grabbing the prime ministership in a party room vote in September 2015, Turnbull held onto it with a narrow victory at the ballot box in July. His party now governs with a one-seat majority. Vanstone argues the Coalition would have suffered certain defeat had Abbott remained at the helm, while Turnbull was able to bring the party back from the brink.

Still, one of the aspects of power – beside the struggle for victory – is to determine the agenda of the struggle in advance, and this appears to be where Turnbull fell down. The Coalition promised to cut Australia’s debt and deficit yet also to deliver $50 billion in tax cuts for business. There were superannuation policy changes and a mantra of “jobs and growth” but no discernible plan for how the latter would happen.

“Malcolm went to the election with a whole lot of aspirational claims – ‘jobs and growth’, ‘innovation’, ‘it’s so exciting’, ‘everything is so wonderful’. I’m not sure that these slogans ever meant much to Joe and Mary in the street or how they actually translated in terms of their day-to-day lives,” says company director Dominique Fisher, founder of the online networking site for young professionals, CareerLounge. Fisher is married to former Liberal Party president and Victorian treasurer Alan Stockdale.

The policy sore points of health and education were largely avoided by both parties in the election, other than in Labor’s Mediscare campaign.

Labor leader Bill Shorten moved to second spot on our overt power list, up from eighth last year, because he demonstrated his power and influence in the past 12 months by setting an agenda to which the government was forced to respond, through the release of a string of bold, ambitious policies. These included the proposal to slaughter the sacred cow of negative gearing. He performed strongly in the campaign, surprising everyone, and came close to ultimate power. It was a stark contrast to the view cast on him in the AFR Magazine’s 2015 power list, where Shorten was described as an opposition leader who couldn’t connect with voters.

“During the election campaign, Bill Shorten appeared adept at channelling where people were,” says Sandra Harding, vice-chancellor of James Cook University, who has sat on a number of government advisory boards. “He spoke to issues in a way and engaged with people in a way that generated a great deal of support.”

The role of the Power panel is to look ahead as much as in the rear view mirror. Its commentary about the future included a lament over the lack of a clear agenda from the government. Ian Macfarlane, a former Coalition industry minister, says the government needs to get momentum and clearly set out its agenda before year’s end. If it doesn’t then at best it risks rising voter disgruntlement – at worst, terminal weakness.

“I’ve seen four prime ministers fail at Christmas,” Macfarlane says. “I saw Howard in 2007, Rudd, Gillard and then Abbott. I don’t know what’s in the turkey. What I do know is this government needs to go flat out to Christmas and get runs on the board. And right in the middle of that is this huge bollard that is going to be the same-sex marriage debate.”

The government has recently begun to ramp up its focus on reducing the debt and deficit, with Treasurer Scott Morrison talking of the prospect of a recession if complacency rather than action becomes the norm. However, if the government’s focus is only on reducing the budget deficit and debt then this will crimp growth, putting further pressure on business and the public at a time when the global economic picture is uncertain and in transition.

The world has been mired in an economic malaise since 2008, when it was hit with the greatest financial shock since the Great Depression. It continues to bear down upon the Australian economy. The anxiety created from this is only intensified by the enormous disruption caused by the internet, to companies and the workforce. There’s a fear things are getting worse rather than better, and as a result the public is getting noisier about inequities and wrongs. Such perceptions do not reflect reality as the Australian economy grew a healthy 3.3 per cent over the year to June, the best annual GDP growth in four years, and among the highest growth of developed nations globally. Still, the government will have to manage such views carefully.

Ultimately, Turnbull will be assessed in three years time on how the economy is travelling. His political power will be judged on his ability to shape and control policy and the behaviour of others, having hopefully led them in the direction desired. This includes everyone from members of Turnbull’s own party, to the Opposition, to voters.

Candid Mike Baird #4

NSW Premier Mike Baird, an outcomes-focused leader, has shown that this can be done. Baird is fourth on the overt list because he’s candidly laid out an ambitious agenda, which includes some deeply unpopular policies, and is delivering on it. Significantly, he set out his goals and the benefits in a mainly non-partisan way. In turn, confidence in the NSW economy has surged, albeit while his popularity took a hit at the polls.

The economic challenges facing the country will not be helped by what is an eclectic Senate, which includes the second coming of divisive politician Pauline Hanson and her One Nation party. The Senate make-up ensures that implementing many policies will be difficult.

The Senate is only one of many challenges to be juggled by the Prime Minister. The reality is that this is another government in power by the skin of its teeth – and inside that government is a junior party that has its own agenda. If the Nationals’ leader Barnaby Joyce, in the role of Deputy Prime Minister, pushes a protectionist agenda, then it could also be trouble for the Prime Minister. Australia needs foreign investment to address the fiscal challenge of coming years and an ageing population. Joyce’s potential influence and position is why he’s third on the overt list.

In the past decade, and the past year, the link between political dysfunction and policy and economic stagnation has grown. A byproduct of this has been the expanded influence and stature of regulators such as the Reserve Bank of Australia, the Australian Tax Office, the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission.

PM's office staff dominate covert list

If the Prime Minister is the most overtly powerful person in Australia, then the gatekeepers to that office are the most covertly powerful. Our covert list is dominated by the top bureaucrats and apparatchiks of the Prime Minister’s office, from cabinet secretary Arthur Sinodinos to principal private secretary Sally Cray, to Department of Prime Minister and Cabinet secretary Martin Parkinson. Each of them holds enormous sway and can facilitate or prevent the decision-making process.

Turnbull’s wife Lucy, a businesswoman, company director and former politician, is third on the covert list but some panel members pondered if she should not have been No.1, given she’s the Prime Minister’s most trusted confidant, someone to whom he listens closely. When the Turnbulls came to power they were compared to the Clintons in America and even the fictional Underwoods from the TV series House of Cards. Certainly, in Australian politics, there has never been a power couple quite like Malcolm and Lucy.

Credible think tanks and activist movements also appear on the covert list as they gain influence against the backdrop of a lack of policy reform and increasing fragmentation of political power. The Power panel considered these groups to have more clout than the Business Council of Australia, which members of the panel criticised for failing to have a coherent policy framework that worked in the national interest, not just its vested interest.

The change in the currents of power over the past year have delivered a new prime minister, one who has shown himself to be likeable and intelligent. But he has yet to show the nation how adept he is at using the power vested in him. That will come through the control and authority of his agenda; the display of a powerful demeanour rather than exhortations and noble aspirations. Unless, of course, others successfully manoeuvre to keep that in check. Such a threat looms from both inside and outside the Coalition.

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The AFR Magazine Power issue, out Friday September 30 inside The Australian Financial Review.