Turnbull's priority should be to get the Aussie economy moving again

MALCOLM Turnbull's successful coup against his party leader seems to have greatly cheered Australia's business community, if for no other reason than that it ends months of leadership instability in the ruling Liberal Party.

Going by media reports, the entrepreneurial classes hope that Mr Turnbull's capture of the prime ministership will boost business and consumer sentiment because of his popularity with the electorate, a marked difference to Tony Abbott, the man he deposed. On top of that, Mr Turnbull has promised to focus his government's attention on the country's faltering economy which had grown by just 0.2 per cent in the June quarter, the weakest pace in more than two years. As well, wages are stagnant, home prices are soaring and the currency has been steadily weakening since the Liberal-National Party coalition won the election in 2013.

Arguably, the first Abbott budget made things worse by slashing spending savagely on the grounds that the previous Labour government had been profligate. Unfortunately, the budget cuts came just when the Chinese, hitherto top consumers of Australia's mineral output, decided to slow down and reform their own economy. At the same time, the US Federal Reserve was cutting back on its quantitative easing programme. This confluence of factors resulted in a sharp drop in investment and, subsequently, dampened consumer sentiment. The only expenditure that Mr Abbott was enthusiastic about was military spending. He wanted to build warships and, perhaps, submarines. He spent big on the national security apparatus.