Prime Minister Malcolm Turnbull must be feeling more than a little frustrated at present, with his approval rating stuck in the doldrums while numerous economic indicators are looking positively buoyant.
Good jobs and retail figures in the past fortnight were followed up on Tuesday with consumer confidence hitting a four-year high.
And yet Mr Turnbull’s disapproval rating of 45 per cent, and approval rating of 38 per cent, are stuck at the same levels seen through 2017 according to the Essential Media poll.
That may change before election time, of course, because whatever else one thinks of the government’s performance, it now has a clutch of economic positives to point to – strong jobs growth, good retail figures, okay GDP growth, several billion in tax revenue windfalls and now a more upbeat consumer.
The latter is all important, because timid consumers won’t boost private sector investment and job creation, nor push the consumer price index up into the Reserve Bank’s ‘healthy’ band of 2 to 3 per cent.
So it’s most welcome, based on the ANZ-Roy Morgan consumer confidence index, to see consumers at their most upbeat for four years.
That’s significant for the government, because when Mr Turnbull challenged Tony Abbott for the Liberal Party leadership in 2015, it was on the basis that the Abbott leadership team was “not capable of the economic leadership” required to get things moving again.
Mr Abbott, remember, had ravaged consumer confidence.
Like the bankrupt character Mike in one of Ernest Hemingway’s novels, he arrived at the infamous achievement “two ways – gradually, then suddenly”.
The gradual erosion of confidence was a result of talking down the economy, even after winning the 2013 election, as if Labor was still in charge.
As I wrote in November 2013: “They need to talk up the ‘booming’ economy – something [Treasurer Joe] Hockey failed to do early in his tenure, when he appeared to think he was still in opposition…”
Then came the ‘sudden’ bit – the shock and confusion caused by the 2014 austerity budget. As the chart below shows, the only bigger dips into below-average territory for the confidence index were the early 1990s recession and the global financial crisis.
When Mr Turnbull kicked the Abbott leadership team out of office in September 2015, hopes were high that he could repair that damage quickly.
In the event, while the general trend was up, confidence took a battering in the early months of 2017 due to a flurry of headlines around the threat of underemployment and stagnating wage growth.
That was countered later in the year by a number of factors. Job creation accelerated, especially in all-important full-time jobs, and the ‘Trump rally’ surged ahead and boosted stock market and superannuation returns.
So while there are still big problems ahead – especially wages growth at a 25-year low – there are plenty of headlines to put a spring in the consumer’s step.
Waving, not drowning
Governments are not wholly, or even mainly, responsible for positive consumer sentiment.
The best they can do is set the stage for economic growth, and communicate their policy moves clearly to voters.
But even if that is achieved, they are always at the mercy of much larger forces in global markets.
On the other hand, governments are quite capable of smashing confidence with ill-conceived policies and agendas that exceed their mandates – the main point proved by the Abbott leadership team in 2014 and 2015.
There is no doubt that the current round of global positives – high commodity prices, strong growth in the EU and US, relatively stable markets – have played a part in getting confidence up under the Turnbull government.
But so too has the government’s willingness to avoid the worst mistakes of the mob it replaced.
To that extent, at least, Mr Turnbull’s comments before the 2015 leadership spill have been vindicated.