What to Expect from Malcolm Turnbull

Following Malcolm Turnbull’s swearing in on Tuesday as Australia’s 29th prime minister, and his first parliamentary outings as the nation’s head of government, questions are naturally being asked about the direction of the party under his leadership, the timing of the next election, and the issues which will define the course of the Turnbull government. The Turnbull coup took many, including the deposed Prime Minister Tony Abbott, by surprise. While there had been a spill attempt earlier in the year, the prospect of emulating the former Labor government by unseating an elected leader was unpalatable, even unthinkable, to many in the Abbott government.

For months, Turnbull had been shaping up as a possible replacement for Abbott by dint of his broad public appeal. But his reputation for centrist, even left-leaning, views was never going to be an easy sell to the Liberal Party’s more conservative members and supporters. He was previously overthrown in 2009 as an unpopular Liberal Party leader while in opposition, and was later told by Australia’s most influential conservative commentator, Alan Jones, that he had “no hope” of ever being the party’s leader again. He was regarded within his party as impatient, intolerant, and arrogant, verging on narcissistic. His standing in the business community is strong though, and few doubt his intellectual capabilities: a Rhodes Scholar at Oxford, a lawyer, barrister, and later managing director of Goldman Sachs Australia, he entered Parliament at age 50, independently wealthy after a successful career in business. Most importantly, opinion polls this year had consistently indicated he would be a more popular leader of the Liberal Party than Abbott.

In Australia, it is unusual for governments to stand or fall on foreign policy, but the next election, which is due before the end of 2016, may be the rare exception.

The opposition Labor Party, under the leadership of former trade union official Bill Shorten, has been overtly critical of the China-Australia free trade agreement (ChAFTA), signed in June this year. It has ramped up concerns about the safety of Australian jobs, and the risk that Investor State Dispute Settlement (ISDS) provisions will allow Chinese companies to sue Australia for loss of profits flowing from changes in government policy. Turnbull, however, made it clear on accepting the prime ministership that he regards ChAFTA as crucial, “surely one of the most important foundations of our prosperity,” setting the stage for the agreement to become one of the defining election issues next year.

Aside from securing ChAFTA, maintaining a productive and relatively stable relationship with Australia’s largest trading partner is essential for any Australian government. Most Australians are well aware of China’s economic importance to the nation: 76 percent saw the Chinese economy as the most important to Australia in 2013 Lowy Institute polling. Leaving aside any potential negatives from ChAFTA, most see China as more of an economic partner to Australia than a military threat. But a surprising number are wary of the military threat China may pose, and this ambivalent embrace of China will need careful management both domestically and bilaterally.

If he gets this wrong, Turnbull risks unsettling some of Australia’s most important relationships and unnerving his domestic constituency. If he is too pro-China, this will antagonize the United States as Australia’s alliance partner, as well other important players in the region including Japan. Under Abbott, Australia has trodden a careful path between firmness and restraint in its response to China’s assertiveness in the South China Sea. A few years ago Turnbull acknowledged the “risks and threats” from the rise of China, but saw them as “greatly outweighed by the opportunities.” He has allowed that China’s maritime claims may not be “without any legal merit.” In January 2015, however, he called China’s activities on disputed islands and reefs “quite counterproductive,” acknowledging that “it will be harder to reassure Asian neighbors about China’s growing military in 2015 than it was in 2009.” China’s latest round of land-reclamation activity in the South China Sea may well stiffen Turnbull’s stance further on this issue.

Above all, Australians do not want to be put in the position where they have to choose between the U.S. as security guarantor and China as the crucial contributor to national prosperity. In 2013, 87 percent of the population polled said it was possible for Australia to have a good relationship with China and the United States at the same time.

Immigration is another policy area that has plagued Australian governments over the last few decades. With an increasingly multicultural population, Australia has grappled with anti-immigration sentiment; 27 percent of its population are foreign-born, and Australia is the third most multicultural nation in the Organization for Economic Cooperation and Development (OECD), the 34-member international organization of developed nations — far ahead of the United Kingdom (12 percent foreign born) and the United States (13 percent). Immigration became an increasingly toxic issue in the 1990s under the coalition government of John Howard. Under intense pressure to slow the tide of Asian immigrants in the late 90s, Howard implemented his radical “Pacific Solution” policy to deter boat arrivals by excising parts of Australian territory from the recognized “migration zone.”

After an unsuccessful experiment in dismantling this policy, the Rudd government reinstated it in 2010 and then hardened it in 2012. Tony Abbott’s pre-election strategy in 2013 was to trump Labor on the issue and “stop the boats” altogether, by forcibly turning back people smugglers’ boats to their source, principally to Indonesia. The policy is regarded as successful, if ruthless, and the opposition Labor Party has now largely adopted it.

With such furious bipartisan consensus, it is hard to envisage the new prime minister tinkering with the formula. Commonly regarded as a political liberal, he will need to resist the temptation to soften the scheme, or risk exposing the government to further destabilizing debate. The challenge will be to manage the policy in a way that is palatable to Australians, his party and himself at the same time. In a poll in February of this year, 1,200 Australians gave the Abbott government a less than favorable mark of 4.9/10 for “handling the arrival of asylum seekers by boat,” despite the success of the turn-back policy and notwithstanding the strong majority (71 percent) who approved the policy just a year earlier. It appears the public are less enamored of the policy in practice than they were when it was an abstract election promise. But there are enormous risks in tampering with a policy that has been so fraught historically and that has finally achieved a precarious bipartisanship. 

Climate change will be one of the first real international challenges for Turnbull, with December’s United Nations COP 21 climate meetings in Paris drawing close. Abbott was elected with a mandate to “axe the [carbon] tax,” which was accomplished with his first budget in 2014. Yet once again, Australians seem less than impressed with the policy in practice. Climate worries have risen among Australians for the last three consecutive years. According to a March 2015 poll, 50 percent of the population viewed “global warming [as] a serious and pressing problem. We should begin taking steps now even if this involves significant costs.” A further 38 percent said the problem should be addressed with “low cost” action. There is also strong support for renewables, with 43 percent expecting solar energy to be Australia’s primary source of electricity in 10 years’ time, though comprising only 2 percent of the current energy mix.

Abbott appeared to have an ideological aversion to renewables; he criticized wind turbines as “visually awful,” reduced the government’s renewable energy target by 20 percent, and severely curtailed the investment discretion of the government agency responsible for clean energy finance which he unsuccessfully sought to abolish. He lauded coal as “good for humanity.”

This is an area of excruciating sensitivity for Turnbull. In his latest incarnation, he has committed to retain his party’s current minimalist climate policies — the “direct action” scheme under which polluters and businesses bid to undertake emissions reduction projects. This is despite his well-known passion about climate science and belief in the necessity of strong policy action. As leader of the opposition from 2008 to 2009, it was this passion that derailed his leadership when he pushed colleagues to pass the Rudd government’s proposed emissions trading legislation, against their intense opposition. As an Abbott government minister, Turnbull maintained the party line on this issue. But now that he’s leader, he will be on notice not to re-open the party’s climate schism. With Paris so close, he may be tempted to increase Australia’s already-announced targets (26 to 28 percent below 2005 emissions by 2030), but this would merely confirm to many in the party that Turnbull is as untrustworthy as ever. The task of holding this tenuous line between placating the climate skeptics in his party and responding to public opinion (which to all intents accords with his own) will be a real test for his prime ministership.

Foreign affairs and security policy have been among the Abbott government’s few conspicuous successes. Through its foreign minister, Julie Bishop, its handling of the MH17 disaster and the United Nations’ response was widely lauded domestically and internationally. Australia’s military involvement in Iraq has enjoyed bipartisan support, and public opinion is firmly in favor of Australia’s military action against Islamic State (IS) in Iraq, even while most Australians (55 percent according to April Lowy Institute polling) believe it will increase the risk of terrorism to Australia. Ambitious new data retention laws, which allow the government to collect and retain communications metadata for two years, were passed easily by Parliament this year. They were also approved by a solid majority of Australians, whose fears of terrorism have run high since the rise of IS, which Tony Abbott habitually referred to as a “death cult.”

The Turnbull government may not employ such tough rhetoric. Speaking in July this year, Turnbull cautioned against overstating the threat posed by Islamic State, arguing that it “is not Hitler’s Germany, Tojo’s Japan, or Stalin’s Russia.” This modulated approach may permit a more peaceable engagement with Australian Muslims on radicalization and counter-terrorism, a community which has already welcomed the change of guard. However, Turnbull’s temperate perspective may shift once he’s privy to Prime Ministerial briefings from the Australian security and intelligence agencies on terrorism and security risks.

In announcing his bid to oust Abbott on Monday, Turnbull premised his pitch almost entirely on economic leadership and the Abbott government’s failure to provide the economic confidence the nation needs. While it is possible that economic issues alone will dominate the government’s agenda leading up to next year’s election, there are some important foreign policy challenges which loom large — ChAFTA, China, Iraq, Syria, climate, asylum seekers — and which it will not be able to ignore. It will take all of Turnbull’s acumen to avoid the now familiar descent into policy confusion that has plagued the last four Australian governments.

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