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The only reason Malcolm Turnbull still has his job

Peter Hartcher

Who is Malcolm Turnbull's role model?

It's John Key, he tells us, the NZ leader who this week rounded off a successful eight-year prime ministership by abruptly departing at the time of his own choosing. Key was the most successful conservative leader in the Western world.

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Malcolm Turnbull could lose his job over his handling of carbon reduction, says South Australia's Jay Weatherill. Courtesy ABC News 24.

And who does Malcolm Turnbull consider to have set the "gold standard" for Australian prime ministers?

John Howard, he tells us.

So why doesn't Turnbull do any of the things his role model did? And why did he ignore the most important advice offered to him by his gold standard-setting predecessor?

Turnbull says that John Key "has been able to bring his nation along with him on a journey of important economic reform".

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True. After an unpopular reform program, he's left the NZ economy in much better shape than he found it. But New Zealanders are feeling better about themselves and their country for other reasons too.

Key raised the GST rate, but he also legislated for same-sex marriage, totems of economic reform on the one hand and social progress on the other.

Turnbull has done neither. Too frightened of Labor on his left to touch the GST and too intimidated by his own colleagues on his right to take the initiative on same-sex marriage, he has contented himself with a second-order agenda.

The two affable investment bankers-turned-politicians are alike in their personal makeup. "We're both economic conservatives. I think we're both pretty socially liberal," Key has pointed out in comparing himself to his Australian counterpart:

Yet the political characteristics of their governments are quite divergent. Like Key's own outlook, his government was unmistakably conservative on economics and liberal on social policy. You can't say the same of Turnbull's.

Key was once described as "the Malcolm Turnbull of NZ" by a former Merrill Lynch employer, Greg Bundy. That was before Turnbull took the prime ministership. No one would say that now.

And the gold standard advice for a new prime minister?

When Turnbull was still new and still popular, John Howard had this guidance for him: "An iron law of politics is that if you have a lot of political capital at some point, you can be certain it will disappear. The question is, do you dissipate it through trying to do something for the long-term benefit of the country or do you dissipate it by sitting around and doing nothing?"Key took option A. He acted on this fundamental principle of political power. He took bold political chances on big, unpopular reforms and succeeded.

The NZ economy had been battered. It didn't have a mining boom. The global financial crisis hit it hard. The country found that it didn't have the borrowing power to use fiscal stimulus against downturn.

Recession hit. The three-decade long net migration to Australia, the notorious "brain drain" accelerated.

Among other initiatives, Key raised the GST rate from 12.5 per cent to 15. He sold minority government stakes in electricity companies to free the money for reinvestment. He liberalised trade.

None of these was a popular move.

But they succeeded. The country's prospects are brighter. The exodus to Australia halted and has now reversed.

Initially, the national spirit soared on hopes that Turnbull as prime minister would be the same Turnbull that the people had grown to admire in his three decades in public life.

Turnbull took Option B. Letdown soon set in. It continues to this day.

In fairness to Turnbull, there's a respectable argument that the task of national reform in NZ is simpler than in Australia. Our Australasian cousin has no states, no federalist constitution and no upper house to frustrate the House of Representatives.

On the other hand, NZ's mixed member proportional electoral system undercuts the major parties and is less manageable for an incumbent. And some of the conservative reform items of privatisations and GST-based tax reform were in far worse order in NZ than in Australia.

Key chose bold reform and it delivered increasing returns. He's fought for unpopular change in the national interest, he won the votes in the parliament and went on to win vindication in results in the real world.

Public trust and public respect in grew accordingly. Key achieved an extraordinary political reward – he won three consecutive election, each with a bigger parliamentary majority than the last.

Turnbull chose the course of a timid survivalism. This is a path of diminishing returns.

It has led him to an increasingly timid and desperate day-to-day scramble to preserve any authority or credibility.

This week was a case study.

A cabinet minister announced that the government would proceed with a long-scheduled policy review.

The review of climate policy, mandated by the Abbott government, would be an open minded exercise to review progress to existing national goals, Josh Frydenberg said.

A day and a half of squawks of protest by a handful of conservative members of his Coalition proved unbearable pressure.

A confident leader would have defended his cabinet minister, stood firm in defence of a scheduled policy review and proceeded with rational policymaking.

This is what himself Turnbull, in the early days of his prime ministership, said he'd do:"We have got to be able to consider policy options in an unfettered way," he said in a Fairfax Media interview, speaking about tax. "We've got to have the maturity to have a debate that is not throwing things off the table...

"Because what happens is politicians who get intimidated by their opponents or by the media or whatever, they say, 'Oh that's off the table, that's off the table, that's off the table' and suddenly there's nothing left on the table."

But that was Old Malcolm.

New Malcolm panicked and took options off the table. He did it on tax. This week he did it on climate policy. In doing so he humiliated his cabinet minister, ignored expert advice, and overruled the electricity industry.

There is no maturity and no rationality. All because he's fearful of his conservative colleagues.

So if the government can't manage to conduct a scheduled policy review, how can it possibly respond to big, real problems that emerge?

Like the stark proof that Australia's schools are failing their students and the country?

This is a first-rate national crisis with profound consequences. The evidence is that deterioration of the schools, public and private, means that today's students have lost the equivalent of a year's learning in key subjects compared to Australian kids a dozen years ago. Other countries improve; Australia goes backwards.

But Turnbull was preoccupied with a faux crisis over routine policy processes. The problem is 30 years in the making; it's not Turnbull's fault. But as Prime Minister it is his problem. Yet he had nothing to say to the country when the two most authoritative international measurement bodies delivered damning reports on Australia's schools. After losing 14 seats at the election and with serial blunders since, Turnbull is fast losing the confidence of his colleagues.

His job is safe for now not because of his performance but simply because the party has no ready alternative.

An Essential poll asked voters to rate the performance of six of his ministers.

Only one, Julie Bishop, had an approval rating above 50 per cent.

She is the only potential leader who could actually improve the government's standing with the public. She's also the candidate that the Liberals' conservatives would try to veto.

She isn't conservative enough, they say, and they are still angry at her for alleged disloyalty to Abbott. They'd continue their wrecking tactics rather than accept Bishop as leader.

And the candidates that the conservatives would prefer? Scott Morrison and Peter Dutton, men with much lower public approval ratings. On current standings, they'd represent a change without an improvement.

This succession dilemma is Turnbull's protection against challenge. He will have next year to recover and to improve. But if he cannot, he will likely go the way of all prime ministers since John Howard, cut down before he can finish a single term.

It's not fair to compare the achievements of a PM of 15 months' standing with one of eight years. But if he hopes to succeed he will need to model himself on Key in deed, not just in word.

Remember the old joke about NZ? "Would the last one to leave please turn out the lights?"

On Friday morning Turnbull paused before the TV cameras to assume a look of great seriousness and declare: " We are committed to ensuring that Australia keeps the lights on."

He was speaking about climate policy. But really, is national ambition sunk so low?

Turnbull needs to deliver his existing agenda in the year ahead. That's a necessary but not sufficient condition for him to survive. He needs to rediscover his ambition for Australia and become master of a government that can deliver it.

Otherwise, the lights will go out on the Turnbull government.

Peter Hartcher is political editor.

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