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Frydenberg appointment gives Abbott muscle to sell economic message

10 January 2015 No Comment

THE fact is Joe Hockey’s future as federal Treasurer is intimately tied to Tony Abbott’s success as Prime Minister. This means these two seasoned political warhorses have a mutual interest in turning around the opinion polls and cementing their jobs.

Importantly, Abbott’s appointment of the up-and-coming, hardworking and intelligent MP for Kooyong, Josh Frydenberg, as the new Assistant Treasurer has afforded Hockey (and also Mathias Cormann) an opportunity to combine their complementary skills to sell the government’s economic message more effectively.

Frydenberg will also join the frontline in question time and more than likely land some body blows on the federal ALP.

Abbott has already signalled that he expects Frydenberg to be across the airwaves selling, promoting and explaining the government’s key economic and fiscal strategy and the PM’s key goals for the future.

If, as expected, the troika of Hockey, Cormann and Frydenberg can work co-operatively and effectively, in the crucial first half of this year, the Abbott government may well be able to gouge back some of the public confidence that seems to have evaporated in 2014.

Certainly Frydenberg brings a fresh set of eyes, a powerful energy and considerable private sector experience to the fundamental task of selling the government’s essential economic message.

Given his successful record to date, especially in the area of deregulation, Frydenberg could forcefully and forensically explain and elaborate on the government’s economic narrative.

To put it mildly, from the point of view of the future of the Coalition government, this is sorely needed.

Frydenberg has very strong links with the doyens of the Australian business community.

Significantly those who publicly applauded Frydenberg’s appointment as Assistant Treasurer included: Brian McNamee, the ­former chief executive of CSL; Tony Shepherd, the chairman of the Commonwealth Commission of Audit; Gail Kelly, chief executive of Westpac; Ian Narev, chief executive of the Commonwealth Bank; and Catherine Livingstone, chairwoman of the Business Council of Australia.

However, Frydenberg has no time to rest on his laurels. Among other matters, he urgently needs to rebut Labor’s claim the federal government has gone soft on the tax treatment of multinational companies.

Frydenberg must also explain how mutual efforts at last year’s G20 summit in Brisbane have assisted in the effective exchange of tax information so that multi­nationals can be properly taxed in the jurisdictions where they earn their revenue.

The undeniable reality is that this year the economy will be front and centre for the Abbott government and pivotal to the national political debate.

The fact Frydenberg is an excellent communicator means he can work effectively with Hockey, who brings a lot of ministerial experience to the table, including having been the minister for financial services.

Frydenberg can also work well with the highly industrious Cormann, who has proved a standout parliamentary performer and a fine negotiator in the Senate, especially in dealing with the abolition of the mining tax.

The troika of Hockey, Cormann and Frydenberg needs to work closely together on the big economic issues and opportunities. These especially include the government’s response to the tax white paper and also to David Murray’s review of the financial system, released late last year.

With regard to the former, under the previous Labor governments a great opportunity to initiate significant tax reform was left in the bottom drawer.

The Australian public needs to be reminded Ken Henry found that of 125 taxes in Australia just 10 of them produced 90 per cent of the commonwealth’s revenue.

On the other hand, 115 taxes produced only 10 per cent of our revenue.

Politically, everything is building towards Abbott and Hockey’s federal budget in May.

Crucial to this will be the work of the Expenditure Review Committee — otherwise known as the government’s “razor gang.

The six people charged with shaping the budget and orchestrating the government’s ­concerted response in what is likely to be a time of considerable fiscal and economic difficulty are Abbott, Hockey, Cormann, Warren Truss, Scott Morrison and ­Frydenberg.

Any perceived disunity among them would almost certainly spell political death for the Abbott ­government.

But don’t be surprised if the two new economic voices on the Expenditure Review Committee — Morrison and Frydenberg — are charged with playing a large and important role in helping Hockey and Cormann explain and then convince the general public of the benefits of this year’s federal budget and the federal government’s fiscal and economic plans.

Professor Ross Fitzgerald has written 36 books, including his memoir, ‘My Name is Ross: An Alcoholic’s Journey’.

The Weekend Australian, January 10-11, 2015, Inquirer p 24.

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