Political Insights Series | The Year Ahead: Setting the Scene for the Nation

by Steve Lewis, Senior Adviser at Newgate Australia

When Scott Morrison addressed the National Press Club on Monday, four of his senior Ministers were conspicuous no-shows. Employment & Skills Minister Michaelia Cash, Defence Minister Linda Reynolds, Defence Industry Minister Melissa Price and Ben Morton – the PM’s close confidant and minister in charge of public service reform and slashing red tape − were all victims of the snap lockdown announced by the West Australian Government.

“The curse of COVID,” quipped one senior Minister. The irony of the four missing frontbenchers was not lost on the Prime Minister who focused much of his prepared speech on the vaccine rollout; a program that he – and his colleagues – hope will inoculate the nation and set the stage for a sweeping electoral victory.

“If we get the vaccine right; it’s hard to see us getting beaten,” says one senior Government adviser. Such optimism, while premature, is understandable. While Mr Morrison and Treasurer Josh Frydenberg appear relaxed and on top of their game, Opposition leader Anthony Albanese is struggling to cut through and there is ongoing speculation about whether his leadership can survive. “The drums are beating,” says one senior Labor figure of the talk around the Caucus around Mr Albanese’s future. Such is the topsy turvy world of politics.

A year ago, it was the PM who was struggling after his disastrous early handling of the bushfires.

Now, Mr Morrison has momentum and the opportunity to strengthen his popularity – provided the vaccine rollout proceeds smoothly, on time and without any major incidents. No wonder that his Number 1 priority for the year is “Suppress the virus and deliver the vaccine”.

While the coronavirus has devastated economies and killed more than two million people globally, Australia has fared much better than just about all other OECD nations. For instance, at 34 deaths-per-million, we are a long way in front of Britain – 1,540 – and the United States, at 1,318.

As the PM told his nationally television audience, “Australia stands out across the world in our response to the pandemic”.

Of course, there are big challenges ahead. The phasing out of the JobKeeper supplement after March will be a key test for the national economy and there are plenty of nervous Government MPs who fret about its impact on marginal seats.

The PM and the Treasurer have signalled they will make an announcement on this matter before too long and there are plenty of advisers working on ways to continue targeted assistance for sections of the economy. Senior Government advisers hint that tourism and hospitality are likely to receive some additional support, although no formal decision has yet been taken.

Earlier this week, a candid Finance Minister Simon Birmingham conceded that some businesses won’t survive the withdrawal of JobKeeper while insisting the Government will take an evidence-based approach to determining which sectors continue to receive support.

“There are going to be lasting changes as a result from Covid,” Senator Birmingham said, in a media interview. “Some businesses won’t find that their business models from before are as viable in the future as they might have to be so they’ll have to make structural changes.”

And there are other stumbling blocks to overcome in what will be a busy start to the year. The Prime Minister and Treasurer are trying to work through the standoff with tech giants Google and Facebook over the Government’s proposed mandatory code that aims to transfer revenues to mainstream media companies. Google’s threat to depart Australia has gone down like a lead balloon with senior Ministers – and both the PM and Mr Frydenberg have talked up the alternative option, of Microsoft’s Bing search engine, to replace Google.

Climate change and energy policy are another set of challenges that are taking up a lot of bandwidth in Canberra. The election of Joe Biden is putting pressure on Australia to take a more proactive stance on reducing carbon emissions – and the PM, ever a political pragmatist, appears to have got the message. Australia is putting a lot of faith in hydrogen to deliver a breakthrough in ‘clean’ energy policy with the PM telling the NPC that hydrogen will deliver the “significant technological change” that will help us get to zero net emissions by 2050, or earlier.

Energy and Emissions Reduction Minister Angus Taylor has even talked up the potential for Australia to attract $70 billion in investment in hydrogen over the next decade. It seems hydrogen is the buzz word in energy at the moment with the PM, during his National Press Club address, arguing that it would be a key contributor to his Government’s efforts. And it seems the Government’s main agencies for financing our clean energy future have got the message. The Clean Energy Finance Corporation has a $300 million fund for hydrogen projects − including those powered by fossil fuels, and the Australian Renewable Energy Agency has $70 million available for green hydrogen projects.

But what if hydrogen proves unreliable or too expensive? Well, then we have a problem, with the PM again ruling out the imposition of any form of environmental or carbon tax to bring about a cleaner atmosphere.

Clearly there are opportunities for private capital to contribute to Australia’s cleaner energy future and Minister Taylor’s priority will be working through innovative ways to fund and develop ‘green’ solutions – and stave off requests from some rebel Nationals’ MPs for another coal-fired power station.

Private capital is also considered an important part of Australia’s push to develop a sovereign advanced manufacturing sector that can reduce our reliance on global supply chains for key goods.

Industry Minister Karen Andrews is overseeing the transformative industry policy which will require plenty of private sector expertise to deliver on the Government’s rhetoric of building sovereign capability. The $1.5 billion Modern Manufacturing Strategy will focus on six priority areas: -

  • Resources technology and critical minerals processing
  • Food and beverage
  • Medical products
  • Recycling and clean energy
  • Defence
  • Space

The Government argues these six areas play to Australia’s competitive advantage and can position us as a global leader. But it’s also clear the Morrison Government does not want to be caught flatfooted as it was when the COVID-19 pandemic struck, and we found ourselves scrambling to source key supplies from overseas.

This is behind the push to ensure a vaccine for the coronavirus can be developed locally and why nearly half of all vaccines to be supplied to the Australian people – 50 million out of a total of 115 million doses – will be manufactured by CSL at its outer Melbourne plant.

Get ready for a mass advertising campaign promoting the Government mantra about vaccines: safe, effective, free. This will be repeated ad nauseum over the course of 2021 as the Government puts it faith in science to knock this pandemic on the head.

Then it will be off to the polls, sometime after that, perhaps very shortly after.