With the deadly 30th Newspoll looming for Prime Minister Malcolm Turnbull, the question is: should the Libs seriously think about dumping their leader to draft Peter Costello back into politics and the top job?
John Howard has told the ABC that nervous backbenchers should drop the idea. And former Victorian Premier, Jeff Kennett surprisingly agrees with his old foe, that changing PMs now is not a wise move.
Of course, both former leaders are at odds with the likes of media oracles like Alan Jones and Andrew Bolt, who have never been Turnbull fans. Conservative forces can’t find anything endearing about Malcolm and have pilloried him about everything from his stance on coal, to climate change, to cuts on tax, to even his Barnaby bonking ban!
Historically, political pundits point to Federal elections being bad for confidence and leadership dumpings have less history, though it has become a sign of the recent times.
Analysis done on robinsonsewell.com.au showed consumer confidence over 14 elections between 1974 and 2013 in the three months before rose nine times, fell in three periods and was unchanged twice.
Interestingly, in the post-election setting, only twice did consumer confidence rise! It fell six times and was unchanged six times.
I think we can say the after-effects of elections aren’t great for consumers’ positivity.
Let’s now look at business confidence over 1989-2013. “The data shows that in those periods, business confidence rose 3 times in the 3 month run up to an election, fell 3 times and was unchanged twice,” the analysis from the website shows. “The results were also mixed for the post election period. The theory that business investment is severely hampered is unproven at an overall level.”
This will surprise a lot of experts but anyone wanting to avoid anything that could destabilise the economy, such as a leadership challenge and PM dumping has to know that it’s highly likely to be unsettling for consumers and can be negative for business.
What’s interesting is that when you look at this chart:
Business confidence for a longer period rose after Coalition wins in most of those post-election periods but fell after Labor wins. Of course, there were other factors, such as the GFC, but after the 2010 election there was the leadership battle between PMs Rudd and Gillard, which was not great for business confidence.
This chart shows what business confidence has done of late:
The downtrend in business confidence links to the Labor’s squabbles and leadership changes. However, the Coalition has only had one leadership change and the trend has remained on the up.
Clearly, this is only a theory at this stage and we need more leadership changes to get a better understanding of what these battles do to confidence and the economy. I hope, however, that data never shows up.
Economies and confidence prefer stable government and we are in an uptrend for business and consumer confidence and anyone canvassing for a change of leader is doing it for political rather than economic reasons.
Yesterday morning, I showed how the media is starting to see our improving economy and in the afternoon we saw more positive data. In case you missed it:
• New vehicle sales hit a record high of 1,201,309 units in the year to March, up by 2.5% on a year ago.
• A trade surplus of $825 million was posted in February. The rolling annual surplus narrowed from $10.46 billion to $8.34 billion.
• The CBA Purchasing Managers Index (PMI) for the services sector rose from 54.2 points in February to 55.6 points in March. The Australian Industry Group (AiG) Performance of Services Index (PSI) rose from 54.0 points in February to 56.9 points in March. Readings over 50 signify services sector expansion.
Given his promise, I know Malcolm has been a leadership disappointment but with our economy really on the turn upwards, the smartest bet for the Coalition is to hope that an election, as late as possible, will give a big bang for the buck, thanks to an economy delivering higher wages and more jobs.
A Costello comeback could be a plus for Coalition and confidence but there would be a lot of political blood spilt and I don’t like thinking about the short-run, negative impact on the economy of such an upheaval.
The irony is that voters like Turnbull over Bill Shorten but they don’t like the Coalition over Labor. Tolerating Turnbull for the economy’s sake is something worth thinking about.
As Bill Clinton warned: “It’s about the economy, stupid.”