Looking forward: The world stage - Australia

A hot year politically and on the economic front too

Australia's Prime Minister Malcolm Turnbull (left), Attorney General George Brandis (centre) and Minister for Employment Michaelia Cash listen to a question during a press conference in Sydney on Dec 30, 2015.
Australia's Prime Minister Malcolm Turnbull (left), Attorney General George Brandis (centre) and Minister for Employment Michaelia Cash listen to a question during a press conference in Sydney on Dec 30, 2015.PHOTO: AFP

Australia enters 2016 in anticipation of a general election likely to be held in the second half of the year.

It is set to be a fascinating election, after the third successive polls in which an incumbent leader came to office after ousting  a sitting prime minister.

Prime Minister Malcolm Turnbull has been in office only since September, after ousting Mr Tony Abbott, and will be hoping to win a public mandate to govern.

Opinion polls show his ruling coalition is on track to easily defeat Labor and win a second successive term. 

But Australia faces lagging economic growth, with a growing government deficit that could yet pose big challenges for the coalition. 

  • The year ahead

  • • General election that Prime Minister Malcolm Turnbull's coalition is likely to win

    • Twin challenge of a lagging economy and a growing deficit

    • Delivery of a long-delayed defence blueprint that could show stance on security challenges

There are already strong calls for Mr Turnbull to consider tax reform and an increased consumption tax, which could prove politically risky. And previous newly installed prime ministers Kevin Rudd and Julia Gillard both struggled at elections shortly after they seized power in 2013 and 2010, respectively.

Mr Turnbull's election opponent is set to be Labor leader Bill Shorten, who supports stronger action on climate change but is yet to establish a clear political agenda. But Mr Shorten currently has terrible approval ratings and the party will almost certainly turn to a fresh leader if he cannot improve his standing.

While the nation's attention will increasingly turn to politics as the election nears, other big challenges loom in the new year.

In early 2016, the coalition is expected to deliver its long-delayed defence blueprint and reveal plans for Australia's future naval and submarine capability. 

 

The blueprint is expected to finally reveal the winner of an A$20 billion (S$20.6 billion) contract to build the next generation of Australian submarines. The leading contenders are France, Germany and Japan.

But the blueprint will also be closely read for signals about  Mr Turnbull's stance on significant security challenges, particularly the rise of China. Since becoming leader, he has described Beijing's recent territorial assertiveness in the South China Sea as concerning and "counter-productive".

The other big pre-election challenge for Mr Turnbull will be his first annual budget in May. He has repeatedly stated that he wants to deliver a budget before calling an election.

The difficulty for Mr Turnbull is that Australia's economy has been struggling due to its fading mining boom and a slump in commodity prices, as well as the general global sluggishness. Mr Turnbull will have to decide whether to go for a tough but unpopular budget, which could include steep spending cuts, or avoid such measures but instead risk his own economic credibility.

Outside politics, Australia could be in for a year of heavy weather as the El Nino pattern continues.

Rising temperatures have already led to heavy drought and early bushfires - and the forecasts are for another hot year.

A version of this article appeared in the print edition of The Sunday Times on January 03, 2016, with the headline 'A hot year politically and on the economic front too'. Print Edition | Subscribe