Prime Minister Tony Abbott has failed to restore business or consumer confidence. Photo / AP
Prime Minister Tony Abbott has failed to restore business or consumer confidence. Photo / AP
PM’s leadership characterised by bizarre ‘captain’s picks’ and lack of vision for how to kick-start economy.
When Tony Abbott faced the recent challenge to his leadership and a party room revolt a few days ago, Australia's business leaders politely said what was expected of them.
They decried the instability in government and called on the Liberal Party to get back on with the job of running the country. After all, business hates instability and uncertainty because it's usually accompanied by a loss of confidence and a freeze on investment.
Behind those public statements, however, is a deep dissatisfaction with Abbott's record as prime minister among business leaders.
None of them will come out and say it, but many would have been pleased to see him go.
His leadership has been characterised by an inability to formulate and articulate a vision for how to kick-start the economy now that the mining boom has ended and by a series of bizarre "captain's picks" - Abbott's name for decisions he made without consulting colleagues. Granting Prince Phillip a knighthood on Australia Day left many wondering if they'd woken up on April Fool's Day and triggered the leadership crisis.
In a sign of the policy shambles his government was to become, his first captain's pick was for a paid parental leave scheme that took colleagues by surprise and left business perplexed.
Why pay women up to A$75,000 ($78,000) to stay home for a year when Australia is suffering from a chronic skills shortage, business leaders wondered? Why not fund childcare instead so women can rejoin the workforce? To make it worse, Abbott was planning to make big businesses pay for the scheme, with a 1.5 per cent tax hit.
He finally dumped the scheme this month to try to shore up his position ahead of the leadership vote, but that hasn't made up for his record on non-achievement in the 16 months he's held power.
Abbott has failed to restore business or consumer confidence, he has failed to pass the Budget handed down nine months ago to bring the deficit under control and he has failed to introduce any of the productivity reforms business says Australia needs. His narrow win in the leadership contest means that he'll have to tread a very careful path, doing nothing to upset the many backbenchers who voted against him or the voters, who if recent polls are any indication, can't wait to get back to the ballot box to throw him out.
It's hardly an environment conducive to brave reform.
Perhaps business expected too much from the man known as "the Mad Monk".
Abbott is a former seminarian, boxer and journalist, and those close to him say he has no interest whatsoever in economics.
Business leaders of the calibre of Telstra chief executive David Thodey, HSBC chairman Graham Bradley and Commonwealth Bank chief executive Ian Narev are complaining the political process isn't working.
While they're not being directly critical of Abbott, they wouldn't be saying these things if they were happy with the way he is trying to run the country.
What's more frustrating for business is that waiting in the wings is a man who they suspect will be able to do a much better job.
Malcolm Turnbull, with a net worth estimated at A$186 million, has wide experience in the law, investment banking, the internet and journalism.
More importantly, though, he is a capable advocate, who would be able to bring the country with him when he tries to introduce hard but necessary reforms, in a way that the awkward Abbott will never be able to.
Abbott's narrow win and his propensity to make gaffes means there's almost certain to be another leadership vote in the coming weeks or months, opening the way for Turnbull to take over.
Business will, of course, say that the country needs a stable government, but secretly they'll be channelling St Augustine: Grant me stability in government ... but not yet.
Richard Branson. Photo / Doug Sherring
Branson knows how to profit from Oz airline
Qantas is, if you'll excuse a bad pun, flying high at the moment.
Like other airlines around the world, Australia's flagship carrier is reaping the benefits of the oil price plunge.
UBS expects it to report an underlying pretax profit of A$1 billion ($1.04 billion) this year - approaching its 2008 record for the first time in years.
That's good news for now, but in the long run aviation is a mug's game for the investor.
It will only take the next global health scare like Sars, another major terrorist attack or the global economy to suffer another downturn and airline profits will be smashed again. And oil prices won't stay low for ever.
Then airlines will be back to where they usually are - losing money.
The one person who seems to consistently make money out of an airline in Australia is Richard Branson. The British billionaire doesn't own Brisbane-based Virgin Australia, he licenses it to use the Virgin name.
And clever man that he is, Branson has charged about A$103 million in licensing fees to Virgin Australia in the 10 years to June 2013, according to figures compiled by Bloomberg.
That's more than the A$90 million in net profits the airline has made since it listed in 200
