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  Morrison turned Abbott down. He would vote for him but not help him.

  The vote came at 9.15 p.m. Abbott walked to the party room meeting with supporters including Abetz, Kevin Andrews, Cormann, Dutton, Fierravanti-Wells, Seselja and Sukkar, all of whom would vote with him again three years later. Others with Abbott included Josh Frydenberg, Craig Kelly, Greg Hunt, Tony Pasin, Christian Porter and Alan Tudge. Turnbull arrived with his inner circle: Brough, Fifield, Hendy, Roy, Ryan and Sinodinos. Their fortunes would vary enormously over the next three years.

  It was over within half an hour. The chief whip, Scott Buchholz, gathered the ballot papers and announced the result: 54 to Turnbull, 44 to Abbott. The losers displayed their bitterness within minutes when Hockey and others demanded a ballot on the deputy’s position, a sign they blamed Bishop for not defending their leader. Abbott’s long-time ally, Andrews, stood against Bishop and gained 30 votes. He was trounced by Bishop, but the result was a warning sign for the new regime and a measure of the size of a core group of conservatives who hated this upheaval.

  The losing side would not go quietly.

  2

  FALSE STARTS

  OCTOBER 2015 TO JUNE 2016

  TO OVERTHROW A PRIME Minister is to admit failure. The parliamentary Liberal Party had decided it could not continue with its leader and his ideals for the government and the nation. The old leader was cast aside and his administration repudiated in a convulsion that put the crisis within the government on public display, making it impossible for Liberals to advance their agenda without first conceding their mistakes. The flaws in the leader, the division in the cabinet, the instability in the party room and the problems with policy were all factors in the crumbling of Abbott and his government, even if it was tempting to blame every failure on the man himself. The search for explanations made it common to focus on Abbott’s personal style and the power of Peta Credlin, but every vindictive revelation about those cast out of power only added to the poison and deepened the desire for revenge. Like Labor, the Liberals would discover that a spill was never an end or beginning but only a stage in a cycle.

  None of this was apparent in the immediate aftermath of the ballot because of the uncontained relief among Liberals who felt they now had a fighting chance at the next election. Turnbull and Bishop were overjoyed in their first appearance after the party room meeting and promised a new direction and a better way of governing. ‘This will be a thoroughly Liberal government,’ said Turnbull, hinting at a departure from Abbott’s conservatism. In contrast with the grim focus Abbott often brought to national security, Turnbull exuded energy and optimism with a focus on the economy. ‘There has never been a more exciting time to be alive than today and there has never been a more exciting time to be an Australian,’ he said on the night he won power. He seemed to assume that Australians would agree.

  The ‘coup culture’ in Australian politics led to the country being described as the ‘coup capital’ of the democratic world, but few could claim to have been surprised by Abbott’s fall.1 This was not June 2010, when Labor factional bosses rose up against Kevin Rudd in a sudden and shocking spill kept secret from some cabinet ministers until it was too late. The attempted spill in February meant Abbott was always on notice. While Labor replaced a relatively popular leader, the Liberals removed a deeply unpopular one. The fact that it was brutal did not hide the fact that it was also rational.

  One reason for optimism was the fact that Abbott’s first pledge was to assist the transition.

  ‘Leadership changes are never easy for our country,’ he said on the morning after the spill. ‘My pledge today is to make this change as easy as I can. There will be no wrecking, no undermining, and no sniping. I’ve never leaked or backgrounded against anyone. And I certainly won’t start now.’ He said the government had remained focused ‘despite the white-anting’ and said Credlin had been ‘unfairly maligned’ by people who should have known better. This was the first hint of the conservative myth that would develop over time about the destruction of the Abbott government by malevolent forces outside his office rather than the foolish mistakes within. In searching for blame, the former leader also looked at the media.

  ‘The nature of politics has changed in the past decade,’ he said. ‘We have more polls and more commentary than ever before. Mostly sour, bitter, character assassination. Poll-driven panic has produced a revolving-door prime ministership which can’t be good for our country. And a febrile media culture has developed that rewards treachery. And if there’s one piece of advice I can give to the media, it’s this: refuse to print self-serving claims that the person making them won’t put his or her name to. Refuse to connive at dishonour by acting as the assassin’s knife.’

  The pledge was reassuring. No wrecking, no undermining, and no sniping. Forgotten, for the moment, was Abbott’s record on keeping promises.

  Turnbull met Bishop and Morrison soon after the ballot to formalise the new structure at the top of the government — Prime Minister, Foreign Minister and Treasurer. There was no surprise at this settlement, which was the understanding all along, but the new leader had to discuss the outcome with the old Treasurer in an uneasy conversation.

  Turnbull and Hockey had fallen out over the 2009 leadership challenge, when Turnbull had changed his mind at the last minute and contested the ballot after losing a spill motion that declared his leadership vacant. The motion against him was convincing, 48 to 34, and Turnbull was expected to bow out to clear the way for Hockey to face Abbott in the election of a new leader. To Hockey’s shock, and the dismay of many, Turnbull chose to stand. The decision split the vote on the moderate side of the party, in a tactical disaster that haunted some Liberals years later, and left Hockey with 23 votes, Turnbull with 26 and Abbott with 35. Hockey was eliminated in the first round and Turnbull lost against Abbott by a single vote in the second round. Could Hockey have defeated Abbott? A decade of conflict turned on that question. Hockey’s policy on climate change, to allow a conscience vote on an emissions trading scheme, offered a compromise that might have seen a scheme legislated within weeks. The 2009 leadership vote proved the party room was in no mood for compromise — then or later.

  Turnbull told Hockey of his agreement with Morrison and suggested he have the defence portfolio. Hockey considered it overnight with his wife, Melissa Babbage, and rejected it. To stay in Parliament and keep working in federal cabinet was to risk years of bitterness and anger in an environment he no longer enjoyed. He thought politics was changing for the worse, with less respect among colleagues.

  Hockey also offered a warning about the backstabbing Turnbull would suffer no matter how much he dreamt of a new beginning. He saw Morrison as an insatiable politician who had worked for more than a year towards one goal — becoming Treasurer at his expense — and would keep working until he was leader. Hockey, a teenager in the 1980s, thought of Morrison as the voracious blob that kept devouring players in a computer game. He’s like Pac-Man. Turnbull, who remembered Greek history better than arcade games, may not have registered what this meant, but he found a solution to the immediate problem by appointing Hockey to Australia’s most important diplomatic post. Abbott’s choice as the next Australian ambassador in Washington DC, Andrew Shearer, was sidelined. Hockey would go instead. He would be glad to see the exit signs of Parliament House.

  ‘It was a cave full of vipers,’ Hockey said later of the political world he left behind, where he felt the infighting among the Liberals was more dangerous than the attacks from Labor.2 ‘I just didn’t want to be around anymore. The bullets from behind were more effective and far more hurtful than the bullets from in front.’

  Turnbull brought a swift renewal to the government by rewarding allies in a way that also rebalanced a cabinet long criticised for having only one woman after the 2013 election and only two when Sussan Ley was named Health Minister at the end of 2014. They were joined by Michaelia Cash as Minister for Employment and Women, Kelly O’Dwyer as Assista
nt Treasurer and Marise Payne as Defence Minister. Turnbull promoted Mal Brough, Mitch Fifield, Craig Laundy, James McGrath, Scott Ryan and Arthur Sinodinos, but he also gave promotions to those who did not vote for him, including Josh Frydenberg, Dan Tehan and Christian Porter. The fresh look was only possible because old faces were so abruptly scratched. Six ministers departed cabinet and the ministry: Bruce Billson, Ian Macfarlane, Kevin Andrews, Eric Abetz, Abbott and Hockey.

  There was no place for Abbott in this new dispensation. Turnbull was resolutely against giving the former leader a place in cabinet, a stance endorsed by Bishop and Morrison. ‘We knew we couldn’t trust him, we knew he would leak,’ said one of Turnbull’s allies. Yet Abbott could not be tempted with any other job that would cause him to leave Parliament.

  ‘Turnbull certainly gave very broad hints that there would be a diplomatic posting available,’ Abbott recalled.3 ‘And he gave very broad hints that the government would like me to take a job of some sort and that he would help to try to get any job that I might want. But I’ve always seen public life as a calling rather than a career and I never really thought that I’d run out of puff. At all stages I’ve thought that I had more to contribute to the government, to the party and to the country, and plainly you can do that much more readily in the Parliament than outside of the Parliament. So I was never really attracted to any of Turnbull’s inveiglements, and in any event it was always pretty vague.’ Postings in London or Rome were aired but there were no definite offers.

  Unlike so many of his peers in Parliament, including the careerists who sought power now and pensions later, Abbott regarded himself as having a vocation for politics.

  ‘He’s a missionary,’ said one of his friends, describing Abbott as one of the most selfless people he had seen in politics. Abbott was a man who had lived an ascetic life as a minister by staying in a motel room in Canberra when Parliament was sitting, and then lived in a small room at the Australian Federal Police headquarters as Prime Minister when The Lodge was being renovated. Soft diplomatic posts held no appeal. He resumed his earlier life: waking at dawn to ride his bike, engaging in relentless political combat during the day and retiring at night after a steak and a beer. Yet he did so now in a changed world where his own side dismissed his agenda and rubbished him. It was hard to conceive a more humiliating environment.

  Two of the younger conservatives in cabinet, Mathias Cormann and Peter Dutton, kept their positions and began their steady ascent to greater influence. In a snub that became a source of complaint for months, Turnbull removed Dutton from the National Security Committee of Cabinet even though every Immigration Minister had enjoyed this higher status during the Rudd, Gillard and Abbott governments. Labor named this a consequence of the ‘vendettas and revenge’ in the reshuffle and Turnbull’s enemies saw an opportunity for mischief. Abbott and Andrews criticised the decision.4 This early mistake, rectified months later, gave the older conservatives a chance to back Dutton in public as a new champion of the right.

  Shorten watched his political fortunes wilt like flowers in the heat. The simple exchange of one man for another was enough to revive the Coalition and restore its lead in the polls for the first time since the budget cuts of May 2014. Asked to name their preferred Prime Minister, 55 per cent said Turnbull and 21 per cent said Shorten, a significant reversal on the poll taken one week before the spill, when Abbott trailed Shorten by 37 per cent to 41 per cent.5 The government was no longer the underdog for the next election. In two-party terms, the Coalition held a lead over Labor of 51 per cent to 49 per cent and no longer faced the crushing defeat suggested by the poll two weeks earlier, when it had been behind by 46 per cent to 54 per cent.

  ‘Not many people wanted my job, that’s for sure,’ Shorten recalled. ‘Only I and a telephone box full of supporters thought we could win. I thought my job had got harder. He had a huge public profile. And frankly, the race had been on as to who could beat Abbott — me or Turnbull. Turnbull got there first.’6 Shorten anticipated a policy contest because Turnbull had been an outspoken minister on economic and social ideas in his regular appearances on television programs such as the ABC’s Q&A panel discussion, so the Labor leader responded with a decision to hold more ‘town hall’ meetings with voters and to work on new policies to counter a resurgent government. Shorten also needed to drag Turnbull down with the weight of the Abbott government’s first budget and its savings on health, education and welfare, as well as the long wait for the construction of the national broadband network, the Labor project which had become Turnbull’s responsibility as Communications Minister.

  ‘Turnbull hadn’t said boo to a goose on the Abbott–Hockey budget of 2014,’ Shorten said. ‘He couldn’t dissociate himself from it. Turnbull was different from Abbott in terms of personality and ambition but not in terms of some of the substantial directions. And in many ways, when he came in, Turnbull was quite an indecisive chap.’

  The greatest danger to Shorten was an early election in which the government capitalised on Turnbull’s enormous popularity to secure a comfortable victory. The government’s fate turned on this decision, more so than its leader knew at the time, but there were divisions over whether to prepare for a swift election. Bishop thought Turnbull’s personal standing was so high that the campaign would work, but others believed the government needed to fix its policy problems before it went ahead. The previous election had only been two years earlier and voters may not have appreciated a rush to the polls, although there was a view that Turnbull’s rise could be used to justify seeking a mandate from the people. The Liberal Party organisation worried that it did not have enough money for the campaign. Ministers worried that they did not have the platform ready. Sinodinos, for instance, backed Turnbull in arguing against an early election.

  The legacy of the Abbott era shaped this decision. One of the biggest weaknesses for the Coalition was the breach of trust with voters after the election promises made in 2013. The objective under Turnbull was to restore trust and develop a policy platform, even if it took until the first half of the following year. The moment for a snap election passed.

  Turnbull opened doors on new policy ideas but found some options were locked as soon as he arrived in the Prime Minister’s suite. This was made clear on the first day of his leadership when he began talks with the Nationals leader and Deputy Prime Minister, Warren Truss, to formalise the Coalition agreement that underpinned the government and its majority in the House of Representatives. Truss was a gentleman of the Parliament, a farmer from Kingaroy with a manner so calm he rarely disturbed the noise of Question Time, although the same civility made him perfectly suited to keeping the rural politicians together. The problem for Turnbull was not in reaching an agreement with Truss but in dealing with the most combative member of the Nationals party room, Barnaby Joyce, who was now positioning to become the party’s next leader.

  Joyce pushed hard to extract concessions from Turnbull to prove he should be the next leader of the Nationals. Truss consulted his Nationals MPs for so long it delayed Question Time. The formal Coalition agreement was accompanied by a secret side-letter that set hard conditions on policy. There had to be a plebiscite on same sex marriage, as announced by Abbott the previous month. There could not be an emissions trading scheme with a price on carbon. The responsibility for water would be moved out of the environment portfolio and overseen by Joyce as Agriculture Minister, a defeat for South Australian Liberals who worried about the Murray River while the irrigators of New South Wales and Victoria watered their crops upstream. Tax benefits for stay-at-home mothers had to be protected. On all counts this was an agreement to keep the peace. Avoiding a fight with the Nationals on marriage and climate also helped ease the anxieties on the conservative side of the Liberal Party.

  Turnbull pursued alternative reforms to honour the unwritten compact with his party that he could deliver new economic leadership. The first step was a new innovation policy to fund research programs, offer tax incentives to i
nvestors in young companies and encourage the teaching of science and maths. It was a vision full of optimism for the future while reflecting Turnbull’s past as an investment banker and early investor in Australia’s first major internet service provider, OzEmail, but it worried backbenchers who thought talking about automation meant telling workers they would lose their jobs. Australian politics was not ready for a nuanced debate about economic change. By the fourth year of the policy, after most of the $1.1 billion was spent, the Coalition rarely spoke of it.

  The next step was to reset months of work on tax. Turnbull harnessed the government’s sudden strength in the opinion polls to advance ideas, or at least canvass possibilities, that would be too dangerous to air in other circumstances. Treasury officials had been working for months on a tax white paper that was meant to be released in an interim form at the end of the year before being finalised and taken to the election as government policy. While Abbott had taken options off the table through the course of the year, Turnbull and Morrison put them back on. Within weeks of the leadership change, Morrison was taking questions about the goods and services tax without ruling out the two most divisive tax ideas in the country: increasing the GST rate above 10 per cent or broadening the base from everyday consumer goods to services like education or utilities like water supply.

  The government could have stopped the GST debate in October but chose to delay a Treasury green paper on tax options in order to allow a public debate that might prepare voters for a ‘tax mix switch’ with enormous economic scale and political risk. The tax revenue from an expansion of the GST would pay for tax cuts for companies and lower income taxes for workers, with compensation for pensioners and others who would feel the pressure of higher prices on their small household budgets. The GST raised $57.4 billion in 2015, about one quarter of the amount raised in personal income taxes, and the admirers of the consumption tax believed it could match the 15 per cent rate applied in New Zealand or even approach the 20 per cent rate of the value-added tax in Britain. No other idea in Australian politics was so expensive: an increase in the GST to 15 per cent and a broadening of the base to include water would raise an additional $35 billion every year.7 Asked in September whether he would rule out a GST increase, Morrison replied: ‘I’m not going to get into those games.’ But it was not a game.