Venom Page 10

  This was the government in the early months of 2017: ready to proclaim its unity but always prone to argue over its direction. The smallest policy could provoke a disagreement among MPs and deepen their anxieties about the narrowness of the election victory and the subsequent cascade in the opinion polls. This was the mood of the Coalition party room when Michael Keenan phoned Julie Bishop over the last weekend in March to alert her to an obscure problem that could set off a clash with China. It was the worst possible timing, just days after a visit to Canberra by the Chinese Premier, Li Keqiang, who had stood smiling with Turnbull at a signing ceremony in Parliament House to increase farm exports. The next step in the relationship was meant to be an extradition treaty to help Beijing bring back officials it decided were corrupt. Keenan, the Justice Minister, was responsible for shepherding the extradition agreement through Parliament. He called Bishop to tell her that Liberal backbenchers were unhappy at this new closeness to the Chinese justice system.

  Bishop and Keenan tried to soothe the concerns at a meeting of Liberal and Nationals MPs on Monday, 27 March, but found a dozen colleagues were ready to cross the floor to block the ratification bill in Parliament. Those objecting to the bill included Abetz, Andrews and Hastie, but this was not a simple factional complaint. Others in the group included Victorian MP Tim Wilson, Western Australian Senator Dean Smith and New South Wales MP Trent Zimmerman, none of them natural allies of Abbott. The central complaint was the risk to human rights from a treaty that would allow China to gain Australian cooperation to return people to face a Chinese judicial system that was opaque and subject to state control. The Law Council said the treaty lacked a vital safeguard: the ability to refuse a request where extradition would be ‘unjust or oppressive’. This had been a concern for Labor MPs for months, led by prominent China critic Michael Danby, and for some Liberals as well, but this had not prevented the treaty being cleared the previous December by a parliamentary committee chaired by Liberal MP Stuart Robert and controlled by a Coalition majority.

  The early warning system had broken down. The government and its backbench might have identified the problem and stalled the treaty in December but had instead kept it on track. The pressure to ratify was significant: Chinese leaders raised the treaty in every meeting with Bishop, impatient that Australia was taking so long to act on the Howard government’s decision to sign the treaty in 2007. The official advice from the Department of Foreign Affairs said the treaty was important and should go ahead. Turnbull had argued publicly for the treaty to be ratified, yet the flaws in the Chinese legal system were real. A public retreat, forced by his own backbench, was an embarrassment after his meeting with Li the previous week. In a different party room, after a different election, a Liberal Prime Minister might have stared down the complaints. Not now. Turnbull had to be realistic about the numbers in Parliament and his power to persuade opponents like Abetz and Andrews.

  Abbott made this a leadership test for Turnbull. He put his concerns about the treaty to his friend, journalist Greg Sheridan, to ensure a front-page story on Tuesday. ‘I’d be very, very cautious about ratifying this treaty at this time,’ he said. ‘I want the best possible friendship with China, but not at the expense of our values and long-term national interest.’21 What began as a question of foreign policy was now a question of leadership. Who had the better judgement? Who was standing up for the national interest? Abbott positioned himself as the strong man and Turnbull as the weak leader who wanted to appease Beijing.

  Turnbull pulled the treaty from Parliament that morning, minutes after Shorten called to tell him that Labor’s shadow cabinet had decided the previous night to vote against ratification in the Senate. The conflict with Abbott was one problem, but to proceed with the bill after Shorten’s decision would have exposed Turnbull to humiliation if a single Liberal crossed the floor or abstained.

  The destructive contest within the Liberal Party meant the decision on the treaty was merely one stage in a cycle of recrimination. Abbott had infuriated the government. Now he was provoked by a leak that claimed he had not objected to the extradition treaty as Prime Minister in 2014 during two meetings with President Xi.22 The leak illustrated the loathing of Abbott, but the facts showed he had not taken any step to ratify the treaty. The report by the treaties committee had come more than one year after he had been removed.

  Abbott responded to the provocation by disclosing documents that showed official advice from the Department of Prime Minister and Cabinet in 2014 that he should not ratify the extradition treaty at that stage. He blamed ‘liars’ for leaking against him.23 As soon as Abbott put his side of the story, Bolt came to his aid. ‘I’m calling out Foreign Minister Julie Bishop for spreading wild untruths about Tony Abbott,’ he wrote.24 The paper trail showed the consistent pressure from President Xi to get the treaty ratified, the concerns within the Abbott government about doing so and, finally, a cautious decision by Keenan in favour of ratification. Keenan made his recommendation one month before Abbott lost power, with no record that Abbott knew or agreed. Bishop recommended the ratification in October 2015, to a new Prime Minister.

  Australia saw the cost of leadership change in this week of division on foreign policy. Stable government. The election claim looked more spurious than ever. Turnbull and Bishop had just abandoned a major treaty with China within days of a visit to Canberra by the Chinese Premier. Rather than postpone the treaty when the concerns over human rights had emerged, the government had gone ahead with a misjudgement of its chances in Parliament. Keenan had been caught by surprise by the backbench. The Liberal backbench, in turn, had been slow to act when the problems with extradition were being openly canvassed by their Labor counterparts. The damage could be traced back to the leadership spill that had disrupted the government eighteen months earlier.

  There was no reward for Turnbull from some of his victories in Parliament when any advance could be overshadowed by Abbott. The government secured part of its ten-year program to cut company tax rates, in a persistent negotiation by Cormann, but it made no headway in the polls. Turnbull had enjoyed a boost in the polls after he unveiled the Snowy Hydro expansion in early March. The next poll, taken after the week of dispute over the extradition treaty, showed the government was trailing Labor by 47 to 53 per cent in two-party terms. Turnbull fought with one hand tied behind his back. He might have applied pressure on Shorten in different circumstances, campaigning on tax and the economy without distractions, but he had no room to move when Abbott was always ready to attack.

  No dispute had the capacity to cause division without resolution as much as the Coalition party room debate on climate change and energy. Turnbull had inherited a policy in need of an overhaul after Abbott, in a cabinet decision in the final weeks of his government, agreed to a commitment to reduce greenhouse gas emissions and contribute to United Nations climate change goals. Australia was to cut its emissions by 26 to 28 per cent by 2030 compared to the levels of 2005. The Abbott government decision in principle was left to the Turnbull government to execute in practice. There was no easy path and no way to avoid taking a first step, especially after storms brought down the South Australian electricity grid in September 2016 and the Hazelwood coal-fired power station was suddenly closed in March 2017, making the reliability of the electricity grid a priority alongside the official target to reduce emissions.

  Turnbull and his Energy Minister, Josh Frydenberg, stepped carefully towards a new regime for the national electricity grid, stretching from South Australia to Queensland and including Tasmania, which could meet the two objectives as well as a third — to reduce prices. In typical fashion, Turnbull allowed the buzzwords of the policy sessions to infect his public remarks, and so was born the ‘trilemma’ of achieving reliability, affordability and sustainability all at once. The high theory sounded reassuring but the ‘trilemma’ burdened the government with a colossal task that was far beyond the patience and capacity of its own backbench and, in the end, its own ministry. />
  Beneath the policy debate was a grudge match between Turnbull and Abbott that was personal, poisonous and deadly to the government. History set the terms of this new contest. The recent past had seen the Liberal Party’s conservative hero, John Howard, draft a policy in government in 2007 to put a price on carbon in an emissions trading scheme, only for that same concept to cause a lasting split in the Coalition party room in opposition two years later. In July 2009, when Turnbull was Opposition Leader and contemplating a deal in Parliament on the Labor government’s emissions trading scheme (ETS), Abbott had made a dramatic shift from opposing to supporting a negotiation. He had set out his new position on the front page of The Australian. ‘Abbott tells Libs: pass ETS or lose poll,’ said the newspaper posters. ‘Opposing the legislation in the Senate could ultimately make poor policy even worse because the government could negotiate a deal with the Greens,’ Abbott wrote. Within six months he repudiated his own pledge and vowed instead to block the ETS.

  Abbott’s backflip enabled him to galvanise conservatives, challenge Turnbull, defeat him in a narrow ballot and become Opposition Leader. One truth emerged: the history showed that Abbott’s policy on climate change could be a matter of convenience when the real prize was the leadership. Turnbull, exiled to the backbench at the end of 2009 and considering a departure from Parliament, wrote a lasting verdict on Abbott’s switch from blocking a price on carbon to legislating one, amending one and then blocking one again.

  ‘His only redeeming virtue in this remarkable lack of conviction is that every time he announced a new position to me he would preface it with “Mate, mate, I know I am a bit of a weather vane on this, but . . .”,’ Turnbull wrote on his personal blog.25 The label stuck. Abbott swung against action on climate change, watched Labor crumble on leadership and an emissions trading scheme in 2010 and then campaigned against Julia Gillard’s government for putting a price on carbon when she had promised no carbon tax. Only later, once in government, did he acknowledge the need to go further to reduce greenhouse gases and agree as Prime Minister to the 26 to 28 per cent target, but the brutal politics of the past broke the policy levers the government could use to achieve that goal.

  Abbott’s chief of staff throughout his leadership, Peta Credlin, admitted in February 2017 that the Coalition had turned Gillard’s emissions trading scheme into something it was not. ‘It wasn’t a carbon tax, as you know. It was many other things in nomenclature terms but we made it a carbon tax. We made it a fight about the hip pocket,’ Credlin said.26 The attack lines were easy in opposition, but the Coalition struggled with this legacy once it had the responsibility of government. Its stated policy was to reduce emissions. Its past rhetoric meant there could be no price on carbon.

  The first clash came in June 2017 when Frydenberg released the final report on reform of the energy grid from the nation’s chief scientist, Alan Finkel, an engineer, Silicon Valley company founder and former Monash University chancellor who was asked to solve an impossible political challenge. Finkel outlined a Clean Energy Target and mapped a transition in the electricity grid to zero emissions in the second half of the century. His mechanism came with benchmarks that would rate energy sources according to the tonnes of carbon they produced for every megawatt hour of electricity — a concept that supported a transition in the grid but rang alarm bells among those who feared the closure of more coal-fired power stations.

  For the conservatives within the party room, the Clean Energy Target was too close for comfort to an Emissions Intensity Scheme in the way it applied a benchmark or value on carbon emissions. Frydenberg had briefly raised the idea of an Emissions Intensity Scheme in December 2016, only to rule it out within a day after a cabinet meeting and a public warning from Abbott. ‘We’re against a carbon tax. We’re against an ETS. We’re against anything that’s a carbon tax or an ETS by stealth,’ said Abbott at the time.27 The same suspicions dogged the Clean Energy Target.

  Anything that failed to encourage new coal-fired power was instantly suspect in a party room occupied by Nationals MPs and conservative Liberals who believed coal would be the most reliable energy source for decades to come. Resources Minister Matt Canavan wanted a high-energy, low-emissions coal-fired power plant for his home state of Queensland. The government was engaged in a tussle with AGL and its American chief executive, Andy Vesey, to force the company to postpone its plan to shut its Liddell coal-fired power station in the Hunter Valley. The effort failed but did not deter Liberals including Abbott from calling for government action to protect coal-fired power. Their calls loosened their party from its free-market foundations and pushed it towards market intervention, to the point where they sought to dictate terms to independent companies and canvass subsidies to pick industry winners.

  Frydenberg unveiled the Clean Energy Target on 9 June and saw it buried on 13 June during a special meeting of the Coalition party room that ran into the night. At least ten MPs rejected the policy while another ten expressed strong reservations. Abbott interjected so often that Craig Laundy, loyal as ever to Turnbull, berated the former Prime Minister and asked that he show respect to those who wanted to speak. One of the most respected backbenchers in the room, Russell Broadbent, warned so strongly about the risk of higher electricity prices that he sparred with Paul Fletcher, another frontbencher who stood by the Prime Minister. The chair of the Coalition’s backbench committee on energy, Craig Kelly, told the meeting the emission reductions should be slowed in the near term so the biggest cuts would come in later years. Queensland MP George Christensen said he regretted agreeing to the emissions targets altogether.28

  The meeting was a rout for the government’s first option on energy reform and sent a message to cabinet ministers to begin their work all over again on a second plan with a less ambitious mechanism to reduce emissions. Even so, Turnbull and Frydenberg had been careful to use the meeting to listen to concerns rather than advance a policy. Because the cabinet did not endorse the Clean Energy Target, MPs turned their sights on the Finkel recommendation rather than on Turnbull and Frydenberg themselves.

  Abbott sharpened his argument by retreating on his pledge as Prime Minister to meet a global agreement to reduce emissions. ‘We have an aspiration — I stress an aspiration — to reduce our emissions by 26 to 28 per cent by 2030,’ he told 2GB. ‘But frankly, we shouldn’t be doing that if it’s going to clobber power prices, hurt households and cost jobs. We shouldn’t be doing that.’29 This was a simple message to promise lower prices without the complication of an emissions target, but it provoked memories of old backflips. A bit of a weather vane. Abbott was swinging again. He had called the 26 per cent target a ‘definite commitment’ when announcing it in August 2015, making it Australia’s formal position at the United Nations agreement on climate change in Paris later that year, but he was shifting his position in a way that mirrored a powerful new force overseas.30 The US President, Donald Trump, had denounced the Paris agreement in May 2016 while campaigning as the Republican candidate and then gone to the presidential election telling Americans he would cancel US participation. He made that pledge official as President on 1 June 2017. On the other side of the Pacific, Abbott made his retreat on the Paris target two weeks later.

  Conservative commentators in the media acclaimed Abbott for his new stance, but some conservatives within the government called him out. ‘The Paris targets were an iron-clad agreement,’ said Concetta Fierravanti-Wells, the Minister for International Development and someone who had to negotiate with Pacific Island nations on climate change.31 Abbott was in ‘direct contradiction’ to his decision as Prime Minister, she said. ‘Now if Tony didn’t think the commitment to the Paris agreement was such a good thing, then 2015 was the time to have that discussion, 2015 was the time to say that rather than to give the iron-clad commitments that he gave on behalf of Australia in an international environment.’

  The message to voters was to keep waiting for an energy policy to arrive. In public, Liberal and National MPs a
ssured Australians they had a plan to keep energy bills down. In private, they could never agree on what that plan should be. Their endless argument left their policy in limbo.

  Months of conflict provoked Turnbull into sending a message to Abbott and his small band of agitators. Turnbull and his team set up an interview to mark the first anniversary of the 2016 election, an event still raw in the memory of Liberal Party politicians and members who blamed Turnbull for the lacklustre campaign and the government’s brush with defeat. No wrecking, no undermining, no sniping. That was Abbott’s pledge when he had lost power. Turnbull found a way to remind everyone that the former leader, who had been accused so often of breaking his promises, was breaking yet another one.

  ‘This is a time for builders, not wreckers,’ Turnbull wrote in a Herald Sun column published one year to the day after Australians had cast their ballots.32 ‘For leaders who get things done and don’t just talk. For negotiators and deal-makers who trade in results, not in platitudes.’ Turnbull created a contrast between himself as a dynamo and Abbott as a destroyer, but he was beset by public doubts about what he stood for and why he could not impose his authority on Abbott and the dissenters in the party room.