Turnbull beats Abbott over NEG, now Frydenberg has to win Victoria


Michelle Grattan, University of Canberra

Malcolm Turnbull has secured a decisive party room victory over Tony Abbott, taking the government’s signature National Energy Guarantee policy another step towards implementation.

Tuesday’s Coalition party room, in a 155-minute debate, gave strong support to the plan. But sources variously said four or five MPs – Abbott, Andrew Hastie, senator Eric Abetz, Tony Pasin and George Christensen – had reserved their right to cross the floor when the federal legislation for the emissions target comes to parliament, and others expressed doubts and criticisms.

In a statement after the meeting, Abbott said at least a dozen had expressed “serious concerns about the NEG or about turning the non-binding Paris targets into law”.

During the debate, Abbott pointedly referred to “merchant bankers’ gobbledigook”.

Tuesday’s party room mood reflected that most Coalition MPs accept that to save marginal seats and give the government, embattled in the polls, its best chance of survival, they need to unite behind Turnbull and the government’s policies.

During the meeting, several MPs told the dissidents they should reconsider their position and show cohesion.

The fate of the NEG scheme now depends crucially on the Labor states – notably Victoria – giving consent to it, and on the parliamentary numbers for the federal emissions reduction legislation.

The government is likely to need Labor support to get the emission legislation through. The legislation will be introduced this parliamentary fortnight.

Labor’s position is that it does not want this legislation debated until the states have made their decision on the NEG. When it is debated, the opposition will seek to amend it for a higher target. It has not said what it would do if, as expected, its amendment failed.

The Victorian Energy Minister, Lily D’Ambrosio, said after the Coalition party meeting: “We’ll study the Commonwealth NEG legislation thoroughly to see what concessions Malcolm Turnbull has given the climate sceptics in his party room.”

“We have said all along – we won’t let Malcolm Turnbull put our renewable energy industry and Victorian jobs at risk. We’ll continue to work through the COAG energy council to address our concerns.”

Energy minister Josh Frydenberg has a phone hook up with state ministers late Tuesday. They are set to release draft state legislation for the NEG mechanism.

But the states are not due to consider their support for the scheme again for some weeks, after failing to sign up last Friday. It is a race against time for the federal government, because Victoria goes into caretaker mode in October for the November election.




Read more:
Labor states keep the National Energy Guarantee in play but withhold agreement


With Victoria the main obstacle, Frydenberg said: “It’s time Daniel Andrews stopped walking both sides of the street and put the interests of Victorians first and the businesses of Victorians first. And he would do that by signing up to the National Energy Guarantee before he goes into caretaker mode.”

The pro-coal MPs were reassured in the party room by the government’s acceptance of the Australian Competition and Consumer Commission recommendation for the federal government to underwrite new despatchable power projects.

After the meeting, Abbott released an angry statement in response to the “rampant hostile briefing of journalists while the meeting was underway.”

“Yes, as the Prime Minister said at its close, there was party room support for the minister’s position. Much of it though, was of the ‘yes … but’ variety: congratulating him for the work he’d done in difficult circumstances and saying that the NEG was the best way through a bad situation.

“But most then added that what really mattered was actually getting prices down – not just talking about modelling – and actually getting more despatchable power into the system via ACCC recommendation 4 [on underwriting].

“Unfortunately, most explanations of how the NEG (as it stands without price targets) might theoretically get prices down sound like merchant bankers’ gobbledigook.

“It was a real pity that the meeting broke up before the chairman of the backbench committee, Craig Kelly, was able to finish his contribution.

“Yes, there were lots of pleas for unity but as one MP said, we’ve got to be loyal to our electorates and to party members too, and not show the ‘unity of lemmings’”.

“Yes, there was lots of regard for the ‘experts’ and for ‘business leaders’ but as one MP said ‘I’m not here for the technocrats’.

“I heard at least four lower house MPs formally reserve their position on the legislation and at least a dozen express serious concerns about the NEG or about turning the non-binding Paris targets into law with massive penalties attached.

“This is the big question that the party room didn’t really grapple with: when the big emitters are not meeting Paris, why should we? Especially, as even the Chief Scientist said, the difference meeting our target would make is ‘virtually nothing’”, Abbott’s statement said.

The Business Council of Australia called on “state and territory leaders to now get on with the job of implementing the National Energy Guarantee by releasing the draft legislation.

“It’s up to Victoria and Queensland, along with the other states and territories, to stop playing political games with people’s power bills.

“COAG Energy Council must stop dithering and finally act to end the decade of dysfunction that has plagued our energy sector.”

UPDATE

The ConversationIn a phone hook-up on Tuesday night the COAG energy council agreed to release an exposure draft of the National Electricity Law amendments needed to establish the mechanism for the NEG.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

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Grattan on Friday: Dutton and Frydenberg struggle with the currents in shark-infested waters


Michelle Grattan, University of Canberra

Peter Dutton and Josh Frydenberg, both aged 47, are two of Malcolm Turnbull’s cabinet high flyers with dreams of eventually flying a lot higher.

Political life has been going very well for Dutton. He sits atop his mega home affairs portfolio. He’s open about his longer term leadership aspirations. But everything would crash if he lost his ultra-marginal Queensland seat of Dickson.

The 9-point drop in the LNP primary vote in adjacent Longman would have sent shivers up his spine. He already faces a massive “Ditch Dutton” GetUp campaign, in which 30,000 calls have been made so far to find out voters’ concerns, and 20 locals meet fortnightly to plan events.

Like Dutton, Frydenberg has plenty of ambition. Though he’s further down “future leader” lists, at present he has the government’s toughest policy job, trying to “land” the National Energy Guarantee (NEG).

As a key deadline looms next week, Frydenberg is surrounded by hostile forces stretching, bizarrely, across the political spectrum. Think Tony Abbott under the doona with the Victorian Andrews Labor government.

Dutton might be the tough man, the right wing ideologue, but he’s also pragmatic.

He opposed same-sex marriage, but pushed for the postal vote that delivered it. He just wanted the issue settled. So it’s unsurprising he appeared to signal this week that if the tax cuts for big business can’t be legislated in the next parliamentary sitting, they should be off the agenda.

The government needed to “negotiate in good faith” with the senators, he told the Seven Network. If that failed his advice was, “we shouldn’t give [Bill Shorten] the ammunition to try and strike back against us”.

A couple of days later, under an extraordinary barrage from 2GB’s shock jock Ray Hadley – “I hope one day you can come on the program and say what you really think” Hadley told the minister – Dutton was more constrained.

In government circles, the big business tax cuts have gone from being vital for Australian competitiveness to a serious political handicap that many in the Coalition are becoming desperate to be rid of.

As Treasurer Scott Morrison put it: “There are two issues here. It’s the right economic policy. The politics is a separate issue.” Indeed.

The trouble is, how does the government rationalise their ditching, after all ministers have said? How to recast the jobs and growth story? How to explain wilting under pressure, to the business community and to international investors, given Australia has a high corporate rate among OECD countries?

And will voters, already distrustful, be cynical? Will a backflip solve the problem with them?




Read more:
VIDEO: Michelle Grattan on the government’s uphill battle with company tax cuts and the NEG


The leading “true believer” on business tax policy is Finance Minister Mathias Cormann, who in the wake of the byelections continues to ring and text the crossbench. One crossbench staffer likens Cormann to the child begging for an ice cream – he’s constantly tugging at the senators’ sleeves.

The government may end up willing to compromise, by excluding the giant companies from the cut – that is the banks, which have become the bogeymen, although other companies would be caught. But if it did that, winning support from, for example, Victorian crossbencher Derryn Hinch, it could lose Liberal Democrat David Leyonhjelm.

Meanwhile, the media are like sleeve-tugging kids too, pursuing ministers with awkward questions about the policy’s future. Yet with parliament not meeting until the week after next, this hiatus will continue a while.

More immediately, the government is on edge over the NEG. The federal, state and territories’ Council of Australian Governments energy council meets on Friday of next week to agree to the details of the mechanism – or not. If it did, the federal legislation for emissions reductions would be put to the Coalition party room the following Tuesday. After that, if all went well, the COAG energy council would give the final tick off.

Last minute obstacles loom, although whether they will be serious, even disastrous, or just inconvenient remains to be seen.

This week Victorian energy minister Lily D’Ambrosio declared her state wouldn’t “rush into” signing up to the NEG, and questioned the federal Coalition party room’s support.




Read more:
Victorian minister plays hardball with Turnbull on the NEG


The government desperately needs the NEG and the associated narrative on power prices settled for next year’s election, but a more immediate election is intruding.

The Andrews government, facing the people in November, is under immense pressure from GetUp and the environment lobby not to sign up next week. GetUp has had ads running in Victoria and Queensland against Turnbull’s “dirty power plan”; Victorian ministers and backbenchers will receive a barrage of calls, with state cabinet meeting on Monday.

Now the Labor governments in Victoria, Queensland and the ACT are set to ratchet up demands to make the NEG plan “greener” – which would run right into the Abbott naysayers in the federal Coalition party room.

The Labor jurisdictions might agree to progress the NEG but make endorsing the needed state legislation contingent on their demands being met.

The hit Turnbull has taken to his authority from Super Saturday emboldens Abbott and his allies. As soon as modelling for the NEG was released on Wednesday Abbott slammed it. “Pigs might fly”, he said to the suggestion the scheme would bring down prices. “This is just wrong, it’s completely implausible, it’s utterly incredible”.

The NEG “still needs an enormous amount of work,” he declared.

From the government’s point of view, the fate of the NEG is more important than that of the company tax cuts. As Dutton said on Thursday, “energy is the most important issue at the moment”.

If the big business tax cuts have to be jettisoned, that will dent the government’s economic credibility; the policy’s supporters will say it would have consequences for investment (Labor would dispute this).

But if the NEG is stymied, the investment consequences would be major because there is no suggestion the government has a fallback plan.

If Turnbull were hit with a double whammy – having to abandon the company tax cuts and unable to get the NEG – that would be a serious policy flunk.

The ConversationThe next few weeks will test whether Frydenberg can gain that moniker Christopher Pyne claimed but couldn’t grasp – “the fixer”.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.