10 July 2020
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It's not Malcolm, it's you!

Peter Switzer
17 June 2016

The bookies tell us that Malcolm Turnbull is set to win the July 2 poll, while the pollsters have Labor in front, but only just. This extraordinary fall from grace, given how popular the Prime Minister was when he saw Tony Abbott off the property (called The Lodge), underlines two big problems.

Last October, Newspoll had the Coalition at 52% to Labor’s 48%, but as preferred PM, Malcolm T was at 63% against Bill Shorten’s 17%. 

Malcolm’s rating as PM is now down to 55%, so he needs a good two weeks.

Back to the problems.

The first is that Malcolm Turnbull doesn’t know his customer base all that well and therefore he’s not a proficient seller of his message. The second is that there’s something wrong with his customer base!

Over the past three weeks, I have been doing a number of speeches to business people who economically are more connected at the hip pocket to MT (wouldn’t that be a cool nickname for Malcolm?). They seem perplexed that Bill Shorten’s Labor is looking like it could form Government, if you can trust the two-party preferred numbers.

By the way, expert political number-crunchers say you can’t believe in those figures because they rest on some potentially dodgy assumptions about preferences, but we can only work with what we’ve got.

Let’s look at the Turnbull post-Budget message.

First, he’s going to make super for a lot of his constituency a lot less attractive. Why is he happy to tell us that only 4% will be affected? When everyone’s concessional cap will be reduced, which reduces the potential super nest egg of all workers, it underlines how out of touch he and most politicians are about super. The lifetime cap of $500,000 (dated back to July 2007) is Malcolm madness personified. Fortunately, the Senate is bound to make him change that crazy Budget initiative.

Also, the transition to retirement pension change, which means those over 56 on this pension will see their super earnings taxed at 15% rather than the current 0%, is a real slug to a lot of Coalition-type voters and is just another piece of Malcolm madness.

As a so-called super expert, I have to say this has been his greatest gaff in trying to win over his constituency, but I’ll argue that he has shown courage to lose votes to improve the deficit and debt drama Australia potentially faces. It could have been done with more equity to small business owners who want to roll the proceeds of a business sale into their super, and to potential home sellers who want to trade back to dump a lot of dough into their low-balance super funds. That could cost him politically on July 2.

I know there’s a hate-session on baby boomers from generations X and Y, who think we’ve got too lucky with property, but they ignore that many over-50s have really low super balances because compulsory super only arrived in 1992. And it wasn’t always 9.5%. Gen Y’ers and X’ers will retire with over a million in super, given their compulsory commitment to super, so they will get even with us one day.

MT’s super play is interesting because he is a male in touch with his feminine side, but his super proposals will hurt a lot of widows who have been housewives and their only asset is the home that many financial planners would encourage them to sell and put into super so they could have a comfortable retirement. These super changes will make it hard for them to get money into super, so they will be taxed more heavily outside of super.

I believe Treasury public servants have sold this to Malcolm and he’s bought it for sound Budget-repair reasons, but because he doesn’t know his customer base as well as he should, he allowed the Canberra mandarins to lead him up the wrong garden path.

But that’s where my policy criticisms stop. His Budget offerings of extending the threshold from $2 million to $10 million for businesses to access the immediate $20,000 tax write-off for business ‘stuff’ bought is great economics. Similarly, giving this group access to a lower company tax rate is smart stuff, but I’d like to see some better selling of the policy. I have found the audiences I’ve been talking to are a little in the dark on how valuable this initiative could be.

Labor currently says they only support a company tax cut for small business, but when Wayne Swan was Treasurer he advocated a general company tax cut on the basis that it would “create growth and jobs”, which sounds very much like the Turnbull message.

On that subject, I think the Coalition really is failing to sell how good the economy is right now. Currently, I’m telling audiences about the current economic story, which I know my mates in the press choose to ignore or else they haven’t had the inclination to go looking for good news. 

Here’s what I’ve found:

  • Economic growth at 3.1% is the fastest in three and a half years
  • Unemployment at 5.7% is at a two and a half year low
  • The CBA’s look at economy-wide sales is at a six-year high
  • Manufacturing has expanded for 11 months straight, which is the longest expansion since September 2006
  • The value of all building soared by 18.3% – the biggest monthly rise in four year and, in trend terms, building is at record highs
  • Private sector is the strongest in seven years
  • The lift in planned investment’s was the second best lift for an equivalent period in eight years
  • New car sales annual growth is the strongest in 31 months and sales are at record highs
  • On export services, annual growth is at 15-year highs
  • Tourism is at record highs, with the growth rate not seen since the Sydney Olympics

I have to ask you: why I am trotting this out and not Malcolm and his team? I call it bad selling. If I had the job to sell the Coalition, I’d be running with this: “In case you missed it, we’re living in an economy where unemployment is falling, jobs are being created, interest rates are historically low, we have grown for 25 years in a row, which is just about a world record, our government debt to GDP is the lowest in the western world and our super funds have returned 8.1% pa over 23.5 years!"

Critics could say this is all well and good but what about the tripling of the Budget deficit from $10 billion under Labor, to the $37 billion under the Coalition?

Deloitte economist, Chris Richardson, pointed out that about $18 billion worth of the rise in the deficit was because the economy slowed and you can blame the end of the investment phase of the mining boom, the loss of confidence as Labor struggled with their leadership and the fact our dollar remained too high for too long. 

Some $8 billion of the rise in the deficit was to try and kickstart a slowing economy, which then-Treasurer Joe Hockey tried to fix with his second and final small business Budget.

And it helped, with the latest good economic growth numbers linked back to those policies and the fall in the Oz dollar. In contrast, the stumbling leadership performance from Tony Abbott didn’t help the economy and since Malcolm Turnbull has taken over, both consumer and business confidence have been better. How many times do you hear that from Coalition politicians?

That’s the failings of the Coalition when it comes to selling their message — they can’t talk up their good news story — but what about the problems with the audience receiving the message?

Are we programmed to want bad news? Is this why politicians don’t talk about positivity but spend their money on what’s wrong with their rivals?

On Thursday morning, I was watching a free-to-air TV news segment while pounding it out on a running machine in a five star hotel. I was staggered at the procession of shootings, acts of violence and even an alligator taking a child at Disneyland, of all places!

I pondered what’s the value of this info? My answer was “very little”, so why do news services serve it up?

The question triggered a memory of asking my then-Sky News colleague, Mike Willisee, the younger, why the news he was reading was all negative? He looked at me as if I was unbelievably naïve and answered: “You know the media Pete, if it bleeds it leads.”

We, the news consumer and we, the political message recipient, have some weird fascination with bad tidings. I see it all the time when the stock market loses $9 billion — that’s always a headline — but between February 10 and May our market ‘melted’ up nearly 15% or some $55 billion, but this never qualifies for a headline.

I’ve always wondered why we love to watch cop shows and heart-pumping thrillers and it’s because we’re weird.

When I interview exceptional high achievers like Gerry Harvey and Mark Bouris, their time is not used searching for stories of failure and disaster. 

Gerry reads autobiographies of successful people, while Mark reads science looking for hitherto unknown revelations.

The interests of the high achievers explain why they are different from most of us. When people ask me about being a success in business, wealth-building, or even life, I tell them to copy the best and be different to the rest.

Given that, it’s Malcolm Turnbull’s challenge to lead this country towards positivity, self-belief and success and away from negativity, aimless interests and failure.

Ironically, one of his first initiatives was to fund $1.1 billion to encourage science, innovation and research to stimulate entrepreneurs and new business opportunities. It was a great initiative open to all businesses, however, when American Express surveyed the CFOs of Australia's top companies on what they knew about the policy offering, this is what was revealed:

  • 59% were unaware of the National Innovation and Science Agenda!
  • 65% thought it was for small businesses only!
  • 38% don’t understand the policy!

There’s $1.1 billion on offer from the Government over four years for companies that want to innovate and some of the smartest money men and women in the country don’t know much about the policy!

Did I say Malcolm and his team have a selling problem?

If he wins the election, I hope that he learns to push the positive stories that exist in Australia in spades. Unfortunately, few of us are willing to tell us all about it.

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