Abbott is the Coalition’s sacrificial lamb

Tony Abbott looks set to face a storm of discontent when consumer costs rise in the first term of his government. And what will Malcolm Turnbull do then?

Could a Rhodes Scholar, former cabinet minister and one of the most successful Opposition leaders in Australian history also be a complete mug? A number of pieces are falling into place to suggest Tony Abbott will make history as a conservative prime minister, but not in any way he would like.

For some time I have pondered a curious shift in political events – namely, the turning of the political bull that is Malcolm Turnbull.

Where once he cavorted through the Coalition ranks goring his own side’s policy positions – on carbon pricing, same-sex marriage, Coalition question-time tactics, and the odd smirk or ironic aside on Abbott's socialist paid-parental leave scheme – this year he has become a docile ox helping to pull Abbott’s wagon into the Lodge.

Many contacts and colleagues remarked that at the launch of Turnbull’s NBN policy the Opposition leader looked stiff and out of his depth, while Turnbull’s face, as Abbott spoke, betrayed a complete lack of interest.

When Abbott was done, Turnbull stepped forward to present a magnificently crafted answer to the wrong broadband question. If the question was “how can we differentiate our policy from Labor’s, but still spend enough money to make voters feel they’re getting real broadband reform?” the policy was the work of policy virtuosos.

Never mind that the real question was, and is, “How can we correct a decade of gross mis-management of broadband policy, including the messy and progress-impeding privatisation of an infrastructure monopoly?”

Stephen Conroy’s policy answers that question but is heavy-handed and expensive. Which is why the Coalition has committed to around half the capex of Labor’s plan to roll out something about a quarter as good (to be extremely generous to the limitations of copper).

But I digress. This is not about broadband ... or boats or carbon or the surplus for that matter. Economic events are unfolding that suggest very strongly that a Coalition government will not be a one-term affair, as some critics suggest, but a resounding victory for Abbott in 2013 and for somebody else in 2016.

That could be Prime Minister Hockey, but bookies would surely be backing Prime Minister Turnbull.

And what are those events?

The deterioration of the federal budget is the starting point. Abbott is fond of saying that surpluses are in the Coalition’s DNA, but even that gene will have to mutate if tax revenues continue to fall or at best flatline through 2014. Labor is expected to announce in the May budget that none of the four years covered by Treasury’s forward estimates will produce surpluses, and for Abbott the task of getting even one of those years into the black will be herculean.

That’s a problem, but the conventional political defence will apply – ‘The previous government cooked the books, and we didn’t realise until we took power how bad things really were’. (Yada, yada, yada – pollies on both sides can repeat this line in their sleep).

No, a string of deficits will be the least of Abbott’s woes. As explained previously some of the most potent vote-losers for Labor will haunt an Abbott government (The misery of good government to come, April 24). The boats can’t be stopped by the Coalition’s stated policy, power bills will keep rising, billions of budget dollars must be found to pay for direct-action carbon reductions, and broadband blackspots will take longer to address than planned (just like the current NBN rollout).

But the real killer, underlined in yesterday’s inflation data, will be the sudden turnaround in the cost of imported goods and overseas travel – central features of our current consumption habits.

Inflation is low overall (running at an annualised headline rate of 2.4 per cent, or 2 per cent in underlying terms), but is being dramatically skewed by the high dollar.

The tradable component of CPI, which accounts for 40 per cent of the index, is running at an annualised 0.2 per cent.

Compare that to the non-tradable component (the other 60 per cent of the index), which is 4.2 per cent, and it becomes clear why a fall in the dollar in 2014  – which will cause the tradable component to catch up virtually overnight – will become a political problem for whoever is prime minister.

And since all the polls say that will be Tony Abbott, he’s the man who will face a near-perfect storm of voter opprobrium. That’s not to say much of that will be his fault, but then neither was the GFC that smacked Kevin Rudd in the face in the first weeks of his government.

And what will loyal lieutenants do if Abbott’s popularity goes the way of Rudd’s? Love and serve their leader? Recent history suggests not.

The toppling of Rudd by his party in 2010 has since been followed by similar coups to replace Ted Baillieu with Denis Napthine in Victoria, the Country Liberal Party’s Terry Mills with Adam Giles in the Northern Territory, and in 2011, Mike Rann with Jay Weatherill as South Australia’s premier.

In the space of three years, the blood-sport of Australia politics has made it almost normal to bump off any leader struggling in the polls.

Little wonder the greatest thorn in Tony Abbott’s side has stopped hurting his leader. If anyone on the Coalition front bench understands the economic storm that will bedevil the first year of an Abbott government, it is Turnbull.

Major surprises and slip-ups aside, Abbott would seem to have little to prevent him winning the prime ministership. Keeping it beyond 2014 will be quite another matter.

The man caricatured by the left as a voracious conservative wolf who hates refugees and women, rips up workers’ rights, slashes spending on renewables, rewards carbon polluters and so on, starts to look less like a wolf and more like a lamb being led (by a bull?) to slaughter.