Morrison becomes Australia’s new PM after Turnbull ousted

Treasurer Scott Morrison will become Australia’s prime minister after ruling Liberal party lawmakers voted to oust Malcolm Turnbull, an effort to boost the government’s flagging poll numbers ahead of an election due by May.

Morrison won 45 votes to 40 over right-wing populist Peter Dutton in a closed-door meeting of lawmakers, party whip Nola Marino told reporters. Energy Minister Josh Frydenberg was elected deputy leader, replacing Foreign Minister Julie Bishop, who also stood for premiership but was eliminated in the first round of voting.

Morrison’s victory represents a defeat for the party’s right-wing, which advocated conservative policies similar to those that led to the rise of US President Donald Trump and the vote for Brexit. He has a narrow window to unite the party and make up ground against the main opposition Labor party, which has benefited from the government’s inability to enact coherent policies from taxation to energy.

“In choosing Morrison, the Liberals have gone for someone who might be more palatable to the electorate,” said Zareh Ghazarian, a Melbourne-based professor at Monash University’s School of Political and Social Inquiry. “For the Liberal Party this is as good an outcome as they could have hoped considering all the turmoil they’ve gone through.”

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.

Dollar gains

The local dollar climbed 0.5% to 72.85 US cents as of 12:51 p.m. in Sydney. The currency had dropped 1.4% on Thursday, the steepest slump since May 2017, as the political turmoil damaged sentiment toward the nation’s currency. The benchmark S&P/ASX 200 Index was up 0.3% to 6,262.00 as of 1.16pm in Sydney, erasing losses ahead of the partyroom meeting.

“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. But it lowers the Liberal party’s chances to win the next election given Morrison was behind failed policies, including government efforts to cut taxes for large businesses, she said.

The 50-year-old Morrison entered parliament in 2007, at the election that ended the Liberal’s 11-year rule under John Howard. After the party returned to power in 2013, Morrison was appointed immigration minister and charged with enacting ‘Operation Sovereign Borders’ aimed at stopping asylum seekers arriving in Australia by boat.

Party infighting

Morrison was promoted to Treasurer in 2015, one of the most high-profile and powerful roles in government. While he has overseen a hiring boom and managed to shrink the budget deficit, the government has received little credit as wages stagnate and housing prices soar beyond the reach of many Australians.

This week’s political upheaval has been driven by infighting between moderates and conservatives in the governing party over Turnbull’s policy direction. His authority was terminally weakened 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.

Turnbull’s hold over the party has always been in doubt, and he was viewed as too liberal by its conservative wing.

He took power in 2015 in a party coup before winning an election the next year with a razor-thin majority. The self-made millionaire had retreated from some of his most strongly held convictions – including tough action against climate change – in a bid to appease conservative forces in the party.

His government was plagued by poor poll ratings, failing to reap a political dividend from 27 years of recession-free growth amid stagnant wages, spiraling power bills and house prices that have risen beyond the reach of many Australians.

Labor, which is pledging to boost spending on hospitals and education, had a double-digit lead in the opinion poll published Monday.