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  Turnbull was not the only one who lacked deep research on how his campaign was progressing. State divisions suffered also from blurred vision because they did not have enough data. The conditions were set for a blame game after the election.

  The Liberals were outspent, outnumbered and outsmarted. Andrew Nikolic, an army officer who served in Iraq and Afghanistan before entering Parliament for the Liberals in the Tasmanian seat of Bass, was worn down by a motivated team of GetUp and union volunteers who handed out leaflets warning about Coalition cuts to health and education. Nikolic, known for his conservative views and his support for Abbott, was a prime target. ‘It was a nasty, personal, vicious campaign,’ he said.10 The Liberals were at a technical disadvantage because they could not match the ‘geo targeting’ of Labor campaigners who knew how to fire a mobile phone text message at voters in a physical area — not just within a federal electorate, but in a town or region. Nikolic saw a barrage of messages to locals in Bass. On the New South Wales Central Coast, Karen McNamara, another Liberal who had been loyal to Abbott, was targeted in Labor text messages that claimed she was privatising Medicare.

  When Louise Markus, a Liberal MP in the semi-rural electorate of Macquarie, on the western edges of Sydney, sent a letter to constituents telling them she had gained funding for a mobile phone tower to help the residents of Yellow Rock, she found the political benefit evaporated in an afternoon. Within an hour of the letters being delivered, Labor bombarded the area with text messages telling voters its candidate, Susan Templeman, was also funding the tower. The Liberals could not match this new technique. They were medieval knights stumbling into science fiction, carrying flames against lasers.

  The Liberal campaign team was convinced it was being outspent by Labor and could not raise money fast enough to turn the tables. The Liberal Party’s federal director, Tony Nutt, had been principal private secretary to John Howard for a decade, had led the party’s Victorian division when Ted Baillieu won the 2010 state election and had run the New South Wales division when Mike Baird won the state’s 2015 election. The federal campaign’s chief pollster, Mark Textor, had helped Abbott win the 2013 election and, with business partner Lynton Crosby, had worked on four winning campaigns for Howard. Yet they did not have enough money to do all they wanted. Nutt had arrived in party headquarters in December to find less than $100,000 in cash available for campaigning, given a rule in the Constitution that required him to keep $1 million in cash to ensure liquidity at all times.

  Donors had turned away from the Liberals during the turmoil of Abbott’s final year in power. The party’s honorary treasurer, Phil Higginson, had quit one year earlier in a dispute over governance and frustration at Credlin’s influence. Nutt and others now found donors were reluctant to help because they thought Turnbull was rich enough to make all the donations himself. Big companies were wary of backing one side of politics or the other, while wealthy individuals were easily antagonised by the government’s changes to superannuation: one donor called to complain bitterly that his super fund, which had millions of dollars in assets, would incur a 15 per cent tax on its earnings. Nutt estimated the Liberals fell behind their rivals by about $10 million during the campaign when compared to the combined funding for Labor, the union movement and GetUp.

  Turnbull knew of the financial pressure and promised a significant donation. Nutt did not have to ask. In a conversation a few days before the campaign began, Turnbull told the federal director he would give more than $1 million to the party and would check during the campaign on whether this would be enough. The two spoke about funding almost daily and saw the pressing need for cash in the final weeks. Turnbull ended up giving $1.75 million.

  One week out from polling day, Turnbull wanted voters to think of the economic gains from his budget policies, such as the company tax cut, and ignore the ‘lie’ from Labor about Medicare. He cited the British vote to exit the European Union, an outcome only days old, as an example of the shockwaves facing Australia, and he set out a grand promise: stability in the face of volatility. ‘This is a time which demands stable majority government, experienced economic leadership and a national economic plan which will deliver stronger growth and more jobs,’ he said.

  In reality, the words described what Turnbull and the Liberals wanted from this campaign. Stable government. Whether they could deliver was yet to be seen.

  The campaign ended with the world turned upside down. Shorten emerged on election night to deliver a victory speech to an ecstatic crowd of Labor Party members. Turnbull waited until after midnight to address a dwindling audience of Liberals with a sour speech that carried the odour of defeat. The result was so close it could not be known on the night, an outcome so uncertain it was enough to puncture the great hope of Turnbull’s return to power. This was an electrifying result for Labor, the union movement, GetUp, the Greens and others. Shorten made no concessions when he appeared at 11.30 p.m. at the Moonee Valley Racing Club.

  ‘There is one thing for sure — the Labor Party is back,’ he said. ‘You should have great pride in what we have accomplished. In the past three years we have united as a party.’ This was true: the rivalries of the Kevin Rudd and Julia Gillard era had subsided. As he spoke, election analysts assumed the Coalition was ahead — yet Shorten made sure to label the outcome a government defeat. ‘Three years after the Liberals came to power in a landslide, they have lost their mandate.’

  Turnbull spent most of the night at his home in Point Piper, watching the results with his family and considering when to go to the Sofitel Wentworth in the centre of Sydney to speak to party members in the ballroom reserved for what was meant to be a celebration. John Howard arrived at about 10.30 p.m. but Turnbull remained absent, while Liberal supporters gave up waiting. The television screens displayed election tallies with only 74 seats for the government, down from 90. This was nothing like Turnbull’s expectations. In one conversation earlier that day, he had been told the Coalition might lose seven seats. ‘That many?’ he replied. The room was only one third full by the time he arrived and walked onto the stage, his exhaustion showing through his attempt to project confidence.

  ‘My friends, based on the advice I have from the party officials, we can have every confidence that we will form a Coalition majority government in the next Parliament,’ he said. It was a tentative claim, relying on the advice of others, and it was quickly overtaken by anger at the way his opponents had almost won. ‘The Labor Party ran some of the most systematic, well-funded lies ever peddled in Australian politics,’ Turnbull said, mentioning the text messages sent to thousands of voters that day. ‘An extraordinary act of dishonesty. No doubt the police will investigate. This is the scale of the challenge we faced, and regrettably, more than a few people were misled, there’s no doubt about that. But the circumstances of Australia cannot be changed by a lying campaign from the Labor Party.’

  Turnbull thanked Australian voters, his party colleagues, Barnaby Joyce, Julie Bishop, the Coalition candidates and the party volunteers, but none of this was remembered when Australians witnessed his rage at failing to achieve the clear victory he expected. Sensitive over his decision to call the double dissolution, Turnbull defended his effort to pass the industrial relations laws, but he could not finish before returning to the Mediscare campaign. Labor lied and deceived and boasted of it, he said. ‘A pretty shameful episode in Australian political history.’ The news from his speech was that he wanted to call the police on his opponent.

  Nine News political editor Laurie Oakes predicted ‘a pretty nasty few years’ as soon as he saw the speech. ‘Look, it is the first time that I have seen a bloke who has won the election give a speech saying that we were robbed,’ Oakes said on air. ‘I thought that was pretty pathetic. It was an angry speech from a guy who two days ago promised a different kind of politics because Australians were sick of this stuff.’11 It took several days for Turnbull to concede one point he did not make at first: that he took full responsibility for the camp
aign.12

  Turnbull’s friends saw his weariness that night. When he was exhausted, absolutely wrung out, the last emotion in his gut could be anger. That was the only thing left in the tank.

  By the time the counting was over, more than one week later, the government had lost fifteen seats and gained one, Chisholm, where Julia Banks became an unexpected winner. Labor had taken the government to the brink of defeat by gaining a popular vote of 49.64 per cent on a two-party basis nationwide, just below the government’s 50.36 per cent. The new Parliament would take shape with 76 Coalition seats, a majority of one. Labor would have 69, the Greens would have one and independents would make up the remaining four.

  The rebuff to Turnbull was indisputable. How he might win voters back was a question that tore the Coalition apart and fuelled wild claims about the result — not least the idea the Coalition had lost one million voters to the right. The final tally showed the Coalition parties gained 5.7 million primary votes in the lower house and 4.8 million in the Senate. Three years earlier they had gained 5.9 million primary votes in the lower house and 5.1 million in the Senate. In both elections the number of Australians who stayed loyal to the Liberals and Nationals in the lower house but backed someone else in the Senate remained relatively steady. It was about 825,000 voters, according to the Australian Electoral Commission’s tallyroom.

  Pauline Hanson’s One Nation mopped up the votes that had gone to mining magnate Clive Palmer and his Palmer United Party three years earlier, emerging with three seats in the Senate and becoming a constant source of anxiety to Liberals and Nationals who feared Turnbull could never win back supporters who had shifted their allegiance to a party with a stated policy to ban Muslim immigration.

  Yet the greater backlash was not the fury on the right but the discontent in the centre. The greatest pain for the Coalition came not from the ‘base’ in conservative seats but from middle-class voters in the outer areas of the big cities, such as Sydney’s west, where people had to spend hours commuting to work because they did not have enough jobs closer to home. The eagerness of the Coalition backbench to chatter about secondary issues, especially the ones that galvanised social conservatives, told voters the government was consumed by its own squabbles. Shorten exploited this with barely any effort.

  The government thought the double dissolution would make it a tower of strength; it looked instead like it could be knocked over with a nudge.

  4

  ABBOTT AGGRIEVED

  JULY 2016 TO JULY 2017

  TURNBULL CALLED THE LIBERALS and Nationals to Canberra to consider their fate at a special meeting of the joint party room where members were free to air their grievances. Anger at the election result was still raw when they gathered on Monday, 18 July, to allow time to prepare for the opening of a new and difficult Parliament six weeks later. ‘Welcome back to government,’ Turnbull said to them at the beginning of their joint meeting, with an emphasis on their ‘working majority’ in the House of Representatives and a brief reminder of the ‘unscrupulous’ tactics of their opponents. He promised a transparent review of the election campaign and invited Tony Nutt and Mark Textor to attend the meeting to explain the result, but there was no escaping the frustration with his own policies and election plan.

  Queensland Liberal Andrew Laming mocked one of the party leaflets about jobs by reading aloud its dot points about innovation and defence. ‘Do you really think anybody would have read past the first two points?’ he asked.1 This was just a taste of wider dissatisfaction with the campaign, as MPs shared stories of ignoring the instructions from party headquarters and running their own races. Textor emphasised the strength of the government’s economic message compared to Labor, while Nutt reminded the room that Turnbull’s personal standing was vital to the outcome. The pollster and party director had public and private data on their side: the greatest damage to the Coalition had come during the tax debate in the early months of the year, to such an extent it had begun the formal campaign in early May behind Labor. The way the government edged ahead on 2 July, like a desperate sprinter lunging at the line, was presented as a vindication for the campaign tactics.

  Yet the anxiety in the party room could not be assuaged. Liberals had been led to expect an overwhelming victory when they had installed their new leader ten months earlier. Now they governed with a majority of one.

  The first cabinet meeting after the election heard the same concerns after Turnbull invited opinions about the campaign. One minister, Christian Porter, newly confirmed as Minister for Social Services after suffering a 5.7 per cent swing in his Western Australian seat of Pearce, listed his concerns: the innovation plan was a weak message, a stronger negative campaign was needed against Shorten, and the party banners were decorated with the ‘presidential seal’ advertising the ‘Turnbull Coalition Team’ rather than using the Liberal Party brand. Porter was not the only minister with these concerns, but the verdict was contested. Turnbull enjoyed high personal popularity, justifying the personal brand, but the tactic rankled with Liberals who believed he was the servant of the party. This nagging doubt about fealty — his to the party, theirs to the leader — would only grow. For now, cabinet ministers could sense that questions about the campaign were too difficult to broach. Most never saw the election report led by Andrew Robb and Barry O’Farrell.

  Shorten was so reluctant to concede defeat he waited until a week after polling day to telephone Turnbull and congratulate him on being able to form government.2 The exaltation in the Labor ranks continued as Shorten visited branches and thanked volunteers, goading the Liberals with what they regarded as a ‘victory lap’ without a victory.

  Abbott saw through the empty words about the government’s authority and was not afraid to say so. He chose the week before Parliament resumed on 30 August to muscle his way in to the argument over how Turnbull should deal with the tight numbers. He summed up the dilemma with his usual talent for a phrase that delivered insight and injury at once: ‘When it comes to budget repair, the reality is that this government has been in office — not in power.’ He had nailed a problem that was much bigger than the budget.

  Abbott was more assertive now about his direction for the Liberal Party. He wanted a bigger attack on the unions to stop ‘rorts, rackets and rip-offs’ and stronger criticism of Labor for its backflip on budget savings that it had supported at the election. In a speech to the building industry in Melbourne, he sketched a plan for political recovery: no new government spending unless it added to economic growth; no return to ‘bailing out businesses’ with taxpayer money; no increase in the Renewable Energy Target; more support for the coal industry; a halt to ‘green sabotage’ that was getting in the way of the Adani coal mine in central Queensland; and more encouragement for a nuclear industry that could be a ‘subsidy-free money spinner’ in South Australia.3 This was the first whistle of a tune he would repeat for the next two years.

  Turnbull and those around him thought this was a nuisance, not a threat, because Abbott had been brought down one year earlier — discredited, they thought, along with his conservative agenda. Surely everyone knew that success lay in the middle ground of Australian politics? This certainty guided the government into the first sitting of the Parliament and the first threat from Labor, when Shorten moved a motion in the House of Representatives to set up a royal commission into the banks. The Coalition broadcast its complacency; Labor revealed its cunning.

  Shorten struck at the moment when government ministers and backbenchers were starting to leave Parliament on Thursday night, hoping to get home early for a ten-day break. The first blow came when Labor won a vote, 69 to 67, to prevent the House adjourning. The government whip, Nola Marino, scrambled to find absent ministers including Peter Dutton, Michael Keenan and Christian Porter, as well as a handful of backbenchers who had left early. The government lost three votes in the lower house, the first time in decades for such a humiliation, and it did so arguing against a royal commission into the banks when t
he idea was gaining support in the community. It took hours of delay for the government to win the final vote, 73 to 72, to adjourn the house at 7.22 p.m. The manager of opposition business, Tony Burke, mocked Turnbull’s claim to have a ‘very solid working majority’ in Parliament. ‘It took just two sitting days for this stable majority to collapse,’ he said. He then found a guaranteed way to wound Turnbull and his cabinet. He borrowed a phrase from Abbott. ‘This is proof that Malcolm Turnbull’s government is in office but not in power.’

  Abbott wanted to defend his record against every taunt. He admitted some of his mistakes, like reneging on his promise to repeal Section 18C of the Racial Discrimination Act, a provision that could trigger legal action if one person was offended or insulted by another, and which was therefore strongly opposed by free speech advocates, but he found ways to explain his failures. The ideals of the Abbott government would not die; the former Prime Minister would start a fight whenever his time in office was questioned.

  Senator David Leyonhjelm gave Abbott something to fight over by reminding the government of an old agreement on gun control. An abrasive member of an unpredictable crossbench, Leyonhjelm was resisting an agreement on the bill to restore the Australian Building and Construction Commission. He spoke to Turnbull to remind him of an agreement reached in August 2015, in the final weeks of Abbott’s time in power, to put a twelvemonth sunset clause on an import ban on Adler A110 shotguns with magazines of seven shots or more. Leyonhjelm blamed the government for keeping the ban and breaking its deal on the sunset clause. This time he wanted the Adler ban lifted in exchange for his vote on industrial relations. ‘Now it’s a matter of trust,’ he said.4

  Farmers wanted the seven-shot Adler to kill rabbits more quickly; gun control advocates feared a new market for rapid-fire shotguns. Leyonhjelm denied this would weaken safeguards; Shorten claimed a retreat on the Howard government’s tough laws from 1996. This was a Liberal Party legacy at stake. Shorten moved in Question Time to challenge Turnbull on whether he would continue the ban or let the shotguns into the country.