Morrison Vows Stability After Yet Another Australian Leader Falls

(Bloomberg) -- Australia’s new Prime Minister Scott Morrison pledged to bring stability to the nation after another bout of political upheaval saw Malcolm Turnbull ousted by his own party.

Capping a tumultuous week in the nation’s capital, Morrison sought to close the rift in the governing Liberal Party, and in his first press conference as leader pitched a family-values message to mainstream voters. It’s the sixth time since 2007 that Australia has changed prime ministers, leaving voters disenchanted with political infighting and policy paralysis.

“We’re on your side because we share beliefs and values in common,” the 50-year-old said in a press conference from Canberra. “It comes back to three things: keeping our economy strong, keeping Australians safe and keeping Australians together.”

Morrison was the surprise winner of the leadership ballot after former Home Affairs Minister Peter Dutton, 47, spent the week campaigning to oust Turnbull, 63, on a right-wing populist agenda, channeling concerns over economic inequality and immigration that underpinned Brexit and the rise of U.S. President Donald Trump.

In Morrison’s first major appointment, he said outgoing Energy Minister Josh Frydenberg, 47, who was elected deputy leader, will replace him as treasurer. He will pick the rest of the new ministry over the weekend, but signaled he won’t call an early election.

“It’s also important that we provide the stability of government,” Morrison said. The party voted for stability and “moving to a new generation,” he said.

Morrison Vows Stability After Yet Another Australian Leader Falls

Morrison now has a narrow window to unite a rattled government against the main opposition Labor party, which holds a growing lead in opinion polls even though leader Bill Shorten isn’t personally popular.

“They’ve gone for a compromise candidate in Morrison,” said Paul Williams, a political analyst at Brisbane’s Griffith University. “It does put the government back in the election race, albeit severely handicapped.”

The change in leadership extends 11 years of political turmoil in Australia, with no prime minister serving a full term since 2007. This week’s crisis has infected the nation’s financial markets and prompted a string of business leaders to demand the government provide policy certainty. In his final press conference before resigning, Turnbull denounced a “determined insurgency” to remove him as prime minister.

Investors appeared relieved that lawmakers picked Morrison, who holds one of the most high-profile and powerful roles in government. Since being promoted to Treasurer in 2015, he has overseen a hiring boom and managed to shrink the budget deficit, even though stagnating wages and soaring housing prices have brewed discontent against the government.

The local dollar climbed as much as 0.6 percent against the greenback after Morrison’s win, following a 1.4 percent decline on Thursday -- the steepest slump since May 2017. The benchmark S&P/ASX 200 Index closed little changed at 6,247, having erased earlier losses.

“It’s an initial relief for the market given he’s someone similar, business as usual being the treasurer,” said Jun Bei Liu, a portfolio manager at Sydney-based Tribeca Investment Partners that manages A$2.5 billion. Still, it lowers the Liberal party’s chances of winning the next election because Morrison was behind failed policies, including government efforts to cut taxes for large businesses, she said.

Morrison Vows Stability After Yet Another Australian Leader Falls

Morrison entered parliament in 2007 during an election that ended the Liberal party’s 11-year rule under John Howard. After the party returned to power in 2013, he was appointed immigration minister and charged with enacting “Operation Sovereign Borders” aimed at stopping asylum seekers arriving in Australia by boat.

Party Infighting

After the vote, the Liberal Party at least publicly moved to overcome the intense infighting between moderates and conservatives that precipitated Turnbull’s ouster. Dutton pledged “absolutely loyalty to Scott Morrison to make sure we win the election and we defeat Bill Shorten and make sure he’s never prime minister.”

For Turnbull, it was a minor victory that one of his allies took over after his position became untenable. He had struggled to unite the party ever since taking power in a 2015 party coup before winning an election the next year with a razor-thin majority.

His authority was terminally weakened earlier this week when he bowed to pressure from Dutton and others to water down his signature energy plan and not legislate Australia’s Paris Agreement emissions target. The government’s popularity has suffered amid high power bills and house prices despite maintaining a 27-year run of recession-free growth.

The Labor party has pledged to boost spending on hospitals and education, and also favors scrapping tax breaks for high-income earners and ambitious cuts to carbon emissions.

“It’s up to Morrison to try to push the reset button so it least has a fighting chance in the next election,” said Griffith University’s Williams. “Given that Shorten still isn’t a popular leader, you can’t rule that out.”

©2018 Bloomberg L.P.