For the second year running, FinanceAsia has ranked the finance ministers of the Asia-Pacific region’s 12 largest economies.
FinanceAsia considers several factors when thinking about how to compare the performance of these men over the past 12 months. The role’s responsibilities and powers vary between countries but each minister contributes to fiscal policy and the budget, accesses capital markets, regulates financial institutions, and drives reform. Investor perceptions are one way to view how good a job they are doing, particularly when times are tough.
But the hardest criterion is independence. Most finance ministers serve at the pleasure of their prime ministers, presidents, or military dictators. Their ability to get things done requires political deftness, mastery of policy, sway over the bureaucracy, and the will to fight for the public interest.
Today's choice is the newest of the 12 ministers on our list. He's made a promising start in cleaning up problems left behind by the predecessor, but needs an electoral mandate to continue his work.
Ranked No8: Scott Morrison, Australia
Tony Abbott led his Liberals to victory in 2013 but he and his treasurer, Joe Hockey, demonstrated a tin ear when it came to governing.
They raised alarms over the deteriorating budget, as declining prices for coal and other exports were exacerbated by the falling value of the Australian dollar, and looked to slash Labor’s spending programmes. But their proposals were viewed as stingy and Hockey’s gaffes and arrogance ensured his budget was dead on arrival in the fractious Senate.
So in September 2015 Abbott was defenestrated by fellow Liberal and former Goldman Sachs banker, Malcolm Turnbull. Scott Morrison, Turnbull’s treasurer, was better known for taking a hard line against boat people and immigration. But he has taken a more conciliatory line toward budget and tax reform.
The budget is not disastrous but it needs fixing. The government’s fiscal mid-year report in December 2015 reported that a deficit of A$37.4 billion ($26.3 billion), or 2.3% of GDP, is expected in FY2016. Net debt is expected to peak at 18.5% of GDP in 2017-2018.
Turnbull has said tax reform to put the budget on a more sustainable path will be his priority. Morrison’s job will be to fashion a plan. But economists don’t expect Morrison’s budget, to be presented in May, will do anything but tread water.
Instead, Turnbull and his team are expected to lay the political groundwork for an election, which must be called sometime in 2016. The strategy is to prepare the electorate for tax reforms, such as shifting the burden from personal income taxes to consumption taxes and land-based taxes, while keeping a check on new spending.
If Morrison can draft a tax plan with electoral possibility, and Turnbull can communicate it to voters, the Liberals can return to power with the first proper mandate since 2007. Morrison so far is an improvement on Hockey, and he now must deliver the goods.
Tomorrow: a minister with growing clout