Barnaby Joyce has secured his colleagues’ backing to hang onto his leadership and Malcolm Turnbull has flagged he will be acting prime minister next week, despite the potential for this to cause further distraction for the government.
Although he is safe for now, Joyce is essentially on notice as leader.
In the short term, he is hostage to any new serious revelations in the media, and in the medium term, to his party’s assessment about whether he has become a political negative, as a result of his affair with his former staffer Vikki Campion, who is expecting his child.
Over the last few days Nationals MPs have been divided between a minority who wanted to force him to quit, his supporters who regard him as the party’s strongest asset, and those uncertain about what should be done.
Joyce is said to be very aware of the hurt in the party and the fact that he has to work to mend the political damage he has caused.
After a week of mounting crisis since the story broke, and intense internal discussions among Nationals MPs and by Joyce with his colleagues, senior Nationals went out in the media on Wednesday to strongly support the status quo.
Joyce’s recently elected deputy, Bridget McKenzie, who had been previously silent, told Sky she’d give “my absolute rolled gold guarantee … that come tomorrow, come Friday, Barnaby Joyce will be leading the National Party”.
Asked what she had to say to the women in the party, she said: “Look, there is an unease I think for all of us, looking at this as a woman.
“But I think we also have to recognise that we are realists. These things happen, in every family, in every town, in every workplace, across the country. It’s whether it impacts on his ability to deliver …
“So yes, there may be a bit of uncomfortableness around his personal life at the moment, but in terms of delivering, what does a woman want out of her parliamentarians and politicians? She wants us to come up here and work our backsides off delivering for them and for her family. That’s what he does.”
Nationals whip Michelle Landry said: “Barnaby will remain our leader. He has done a lot for us, particularly in regional Australia and I think we should give him a fair go with it.”
David Littleproud, promoted by Joyce to cabinet in December, said Joyce would continue to have the support of the Nationals’ partyroom.
In parliament, Bill Shorten asked Turnbull whether he still retained confidence in Joyce and “when the prime minister is overseas next week, will the deputy prime minister be the acting prime minister of Australia?”
Turnbull was as brief as he was previously, when he answered both questions with a yes. “You asked me earlier in the week, and the answer is the same as it was earlier in the week,” he said.
Some Liberals have been unhappy at the prospect of Joyce being acting prime minister when Turnbull visits the US, believing he will be pursued by the media, creating more bad publicity.
But not to have him acting prime minister would amount to a vote of no confidence in him.
The opposition pursued Joyce’s accommodation arrangements in his New England electorate where businessman Greg Maguire, his friend, provided him with six months’ free accommodation, worth some A$12,000, in an Armidale townhouse.
Labor plans to delve into the staffing arrangements made for Campion when Senate estimates are held the week after next.
After 24 hours in Canberra calming the troops, the Nationals’ federal president Larry Anthony said: “I think the vast majority of the parliamentary team are supportive of Barnaby.”
He said it was now important that the Nationals MPs “get back into their constituencies over the next week – people want to see them working and supporting their communities”.
China’s 19th Party Congress has elected a new leadership team that promises to bring continuity in the country’s gradual domestic reform and stronger focus on internationalism.
Proving many political observers wrong, the new leadership line-up is an A-team in terms of economic and international credentials.
New leadership team
President Xi’s “new era” of Chinese development and economic growth is defined by the reform agenda he laid out when he came to power in 2012. This vision was most clearly articulated in his personal comments on the 60-point policy document that laid out the President’s vision for the governance reform of China.
The newly elected leadership team comprises five new members, all of whom bring economic and international experience to the table that will shape the direction of Chinese policies over the next five years.
Wang Yang and Han Zheng have led China’s most successful and most internationalised province-level economies, Guangdong and Shanghai. Li Zhanshu and Zhao Leji have overseen growth and reform in China’s inland provinces before assuming central party posts. Wang Huning, the chief theoretician, speaks fluent French and has a PhD in philosophy from Johns Hopkins University.
All five newly elected members (they join the existing Premier Li Keqiang) have been groomed for the top positions by serving at least one term on the politburo. The composition of the seven-member standing committee of the politburo is evenly balanced between economic reformers and the political power base.
Premier Li Keqiang’s focus is on economic policy-making, while Wang Yang and Han Zheng have steered China’s most open economies. Together, they represent economic stability and continued globalisation. The other three new members will oversee continuity in domestic policies and the continued role of the party.
Li Zhanshu was in charge of party administration over the past five years and is seen in the role of the party “whip”. Zhao Leji, as a power broker, was running the party’s Organisation Department and served as the second in command for the Party’s discipline inspection system in charge of anti-corruption policies. Wang Huning, who formulates Xi Jinping’s political agenda, has served the previous two leadership groups in exactly the same role.
Together, these six closest associates of Xi Jinping demonstrate the continuity of policies from the first half of Xi Jinping’s five-year term into this second five-year term to a domestic as well as an international audience.
Renewed focus on internationalism
One of the key advantages of the new leadership team will be their solid international credentials.
Wang Yang, former Party secretary of Guangdong Province, has been closely involved in China’s strategic economic dialogue with the United States. At the same time, he was in charge of the internal steering committee for the Belt and Road Initiative. His appointment means that China will continue the balancing act between its own regionally focused strategy and the (western) rules-driven form of globalisation.
Han Zheng, the former Party Secretary and mayor of Shanghai, served during the 2010 Shanghai World Expo and oversaw the globalisation of Shanghai with its co-existence between commercially viable state-owned enterprise sector and a growing private sector.
Moving these internationally connected decision-makers to the front line signals pragmatism in China’s economic policies and globalisation. Their experience in dealing with foreign governments and businesses, and their awareness of the interdependence of global markets, suggests that current reforms in financial industries, advanced manufacturing and overseas investment will continue.
A new leadership direction
President Xi’s governance reform is a driver behind his anti-corruption campaign that has been in place for five years. In western terminology, Xi’s contribution to socialist theory is his attempt to institute a “separation of powers” by strengthening the role of the legislative in supervising the executive.
Currently, the party has direct control over the executive through appointments of all relevant government officials and direct interference in detailed government processes. Xi Jinping’s governance reform envisages a rules-based supervision of government through the system of people’s congresses and less direct interference by the party.
The governance reform includes practical aspects, such as reform of public finance as a precondition for banking reform; further tax reform, social security and medicare reform. These reforms will open new markets and are relevant for foreign economic cooperation.
Xi’s speech to the Party Congress cited unresolved issues, including social inequality, poverty, environmental pollution, health care and food safety. These are urgent matters than affect general public support for his policies and the government.
In view of the urgent need for progress in these areas, he foreshadowed a stronger role of the market and international cooperation in areas such as health care and social services.
Implications for Australia
For Australia, continuity in China’s leadership transition means stability in long-term economic relations, from forthcoming revisions to ChAFTA to Australian involvement in China’s “One Belt, One Road” Initiative.
The new leadership will continue to promote regional economic integration. Australia, with its location between Southeast Asia and the Pacific, is recognised by China as an important economic hub with mature institutions that will underpin regional economic cooperation.
If the Turnbull government’s present agonies become death throes and the election is lost, coping with opposition will test to its very core a Liberal Party that in power has been fractured and self-indulgent.
For a start, would the conservatives, who at the moment have an ideological mortgage over the party despite moderates holding some key cabinet posts, be able to foreclose and, if so, with what consequences?
It’s almost two years since a widely hailed moderate prime minister overthrew a conservative one. Yet in many areas Malcolm Turnbull has not been able to assert his authority over the party. Instead, he has been forced to, or chosen to, accommodate the right’s demands and embrace senior conservatives as his closest ministerial confidants.
The conservatives’ very effective strategy – from their own point of view if not electorally – is to reap what victories they can while Turnbull leads. But their real moment could be in prospect if he loses (assuming he takes the party into the election).
It would depend on who emerged as leader – which in turn would be affected by the size of the defeat and the composition of the post-election party. But conservatives, already shaping the internal debates, would seem well placed in the field of successors.
Peter Dutton, their hardman, has gone from the minister Turnbull didn’t want on cabinet’s national security committee to the prime minister’s adviser and protector, recently rewarded with the creation of the proposed home affairs portfolio.
Dutton can afford to be a mainstay of Turnbull’s praetorian guard. His best chance of leadership lies in Turnbull losing and his pitching as the tough Tony Abbott-style headkicker the Liberals might think they need in opposition.
Meanwhile, the immigration minister burnishes his right-wing credentials by relentlessly milking the border protection issue, assiduously feeding friendly Murdoch tabloids, and maintaining a warm dialogue with 2GB shockjocks.
If not Dutton – who could conceivably lose his marginal Queensland seat – the Liberals would be looking at Scott Morrison, Abbott, Christian Porter (also vulnerable in his Western Australian seat), Josh Frydenberg and Julie Bishop.
Morrison is an ideological chameleon, so it would be hard to predict where the Liberals would head off to under him. While his stocks have receded, in opposition he might be viewed as a compromise.
Abbott would surely be seen as yesterday’s dog.
Porter, a former WA treasurer and attorney-general, arrived with much promise but so far has lacked the popular touch.
Frydenberg probably wouldn’t be regarded as ready.
Bishop doesn’t appear up to – or up for – years of opposition slog, and would likely quit parliament.
Of this list, only Bishop is (sort of) a moderate; Frydenberg is (sort of) centrist.
The lack of moderates in the succession list is notable, given Christopher Pyne’s ill-judged boast to that faction that it was in the “winners’ circle”. It’s not, if we are talking about future leaders. Nor is it articulating, in the sense of a broad manifesto, what the party stands for, according to moderate lights.
This failure to proselytise – something they did diligently at times in the past – is one source of the moderates’ current weakness.
For the most part, Turnbull has failed to chart a philosophical path ahead for the Liberals. Buffeted by political circumstances, bad opinion polls and determined internal critics, he has lacked the opportunity or will to do so. Or perhaps, as a primarily transactional politician, he doesn’t have the intellectual bent for that sort of task.
Turnbull’s much-talked-about July speech in London, in which he said the Liberal Party belonged in the “sensible centre” – a phrase he’d taken from Abbott, though each would identify the centre’s content differently – generated intra-party controversy without inspiring the followers.
In contrast, Abbott has the time, inclination and intellectual heft to set out directions, with numerous articles, speeches and radio interviews.
While Abbott has only a small band of loyalists in personal terms – because he’s seen as electorally unpopular and as someone undermining the government’s chance of surviving – he espouses positions supported by many other conservatives within the party and their commentariat sympathisers.
The response to Pauline Hanson’s burqa stunt in the Senate highlighted the divisions among Liberals over some basic values. Attorney-General George Brandis tore strips off Hanson in a spontaneous and emotional speech, drawing a standing ovation from Labor and Greens. Education Minister Simon Birmingham – one consistently gutsy moderate voice – tweeted support. But positive reaction from the government benches in the Senate was more muted.
Brandis has subsequently come under attack from some conservatives for his speech. Peta Credlin, Abbott’s former chief-of-staff and a significant extra-parliamentary player in the “Liberal wars”, who advocates banning the burqa, wrote: “Rather than condemn Hanson to win the applause of Labor and the Greens, George Brandis should have shown leadership on an issue where women are denied their rightful place in our community.”
Brandis lost out in Dutton’s win on the planned home affairs department, but managed to retain responsibility for approving warrants for ASIO activities.
In the battle for the party’s soul Brandis may think he has little to lose by taking a stand. He’s under pressure to quit the parliament at the end of the year to open the way for Turnbull to reshuffle; it’s not clear whether Brandis would or could seek to stay a while beyond that.
Given the conservatives’ present power in the Liberal firmament, it is worth revisiting Brandis’ 2009 Alfred Deakin lecture, in which he argued that the party’s much-heralded “two traditions” – conservative and liberal – theory “was a specific contribution of John Howard’s”, rather than a historical feature.
“This awkward blending of two different systems of values was very much a reflection of John Howard’s own personal values, shared by no other significant Liberal leader. Alfred Deakin, Robert Menzies, Harold Holt, John Gorton, Malcolm Fraser were all happy to describe themselves simply as liberals. Howard was the first who did not see himself, and was uncomfortable to be seen, purely in the liberal tradition,” Brandis said.
In that lecture Brandis also pointed to the contest, when a party goes into opposition, between those who want to be brutally honest about past failings and those seeking to defend the legacy.
Unless a lot changes fairly quickly – and admittedly the election isn’t due until 2019 – extolling a rather scattered Turnbull legacy might be a challenge.
In government, the Liberals’ own goals have given Labor many breaks. In opposition, the challenges in getting their act together would be considerable.
The broad right is already splintered, with Cory Bernardi’s Australian Conservatives, Pauline Hanson’s One Nation and, toward the centre, the Nick Xenophon Team all competing with the Liberals and Nationals.
If worse came to worst, the right could fragment further in opposition. There was muffled talk previously of those from the Queensland Liberal National Party wanting to sit as a separate group, although this isn’t considered practical.
If their vote held up better than that of the Liberals, the Nationals would likely be angry with their partners after a rout. They are already blaming Liberal ineptitude for the Coalition’s woes – although the crisis over Nationals MPs’ citizenship saw the exasperation suddenly flow the other way. A blame game would make harder the adjustment to the loss of power.
While unrelenting negativity can be an effective path for an opposition, as Abbott showed spectacularly, there is no guarantee it is enough. Bill Shorten has picked up a good deal from the Abbott playbook, but Labor under him also has a quite strong, and in parts daring, policy agenda.
The Liberals could not simply rely on a Shorten government being a shambles. They would need to develop over time a positive program – and one that connected with ordinary people, rather than being in an indulgent la-la land of the hard right.
Much would depend on leadership in a party that turns on the axis of the person at the top. That takes us back to the apparent problems of succession.
Of course, there might be nothing for the Liberals to worry about. Turnbull – with his device of covering uncertainty with the definitive declaration – assures us the government “will win the next election”. Many of his colleagues just wish they believed him.
Few have heard of the Baltic Dry Index. It measures the demand for bulk shipping carriers, used for international trade. It usually attracts little attention. But nine years ago this index had the undivided attention of the 20 most powerful leaders in the world.
It was when the global financial system was on a precipice. Stock markets were crashing. Credit markets were freezing. Rolling failures across financial institutions were shattering confidence. Unable to wait for monthly trade data, the Baltic Dry Index showed in real-time what many leaders feared: global trade and commerce were grinding to a halt.
Leaders faced the real prospect of another Great Depression. But they were determined not to make the mistakes of the past. They resisted a return to protectionism. They slashed interest rates and buttressed the International Monetary Fund and development banks. Over the next three years, they implemented US$5 trillion of co-ordinated fiscal stimulus, the largest in history.
That leadership is needed again today. The risks leaders face at the latest G20 meeting in Hamburg, Germany, might not be as serious as those the leaders who met in Washington faced back in 2008. But the risks are present, and leaders are disengaging with the G20’s ever-expanding agenda. They are more likely to use the G20 for cheap political point scoring than for advancing co-operation on critical global challenges.
Australia can play a role in helping the G20 to deliver this leadership.
Protectionist measures are on the rise. Protectionist rhetoric is rising faster. The World Trade Organisation shows that the stock of trade-restrictive measures is growing, up 8.5% in the 12 months to May 2017 alone.
The G20’s growth agenda from 2014 is in tatters. The G20 committed to make G20 GDP 2.1% bigger by 2018. Instead, the International Monetary Fund forecasts it to fall short by almost 6%.
A strong, effective G20 is manifestly in the interests of the global community, but particularly of Australia. Three-quarters of our merchandise trade is with G20 countries. Our banks rely on them for wholesale funding. Our tourism sector relies on them for two-thirds of our tourists. Our universities rely on them for the vast majority of their students.
Critically, the G20 is an opportunity for Australia to have a say in how global governance will be shaped in the years ahead and to be a regional champion for Asia.
Through in-depth interviews with over 40 central bank governors, ministers and officials from G20 countries, my research suggests there are practical things the G20 could do to increase its relevance. Importantly, participants see Australia as a developed economy, closely integrated in Asia and which promotes the values of the open, rules-based international order. This makes Australia well placed to push for pragmatic changes to improve the G20 process, particularly having hosted the 2014 meeting.
My interviewees warned that the G20’s agenda is too heavily dictated by the host country. In 2011, when France hosted the meeting, President Nicolas Sarkozy asked UK Prime Minister David Cameron to produce a report on reforming global governance. This instantly elevated the issue and saw substantial involvement from other leaders. Australia should push for allowing more leaders to champion the issues important to them, rather than leaving it all to the host country.
Participants similarly suggested that the G20’s peer-review process is too weak. This is the process through which countries review and give advice on each other’s policies. It’s critical to the G20’s ability to generate peer pressure, which is how a non-binding forum influences policies.
But participants saw this process as being a “tick and flick” exercise, isolated to junior officials in G20 working groups. Australia should advocate to change this, elevating the peer-review process to the level of ministers, governors and leaders. This will allow the people who have political capital to raise substantive points with one another.
For the G20 to demonstrate global leadership, participants suggest that it needs a genuine agenda for growth, with a stronger focus on making growth more inclusive. The OECD has some suggestions for this, such as investment in infrastructure, education and microeconomic reforms that lift workforce participation and create new opportunities for quality investment. The IMF shows that GDP gains can be 25% larger if structural reforms like this are co-ordinated between countries.
Participants also wanted progress on trade but warned that reaching agreement has been difficult. Recent research suggests the G20 should seek to promote consistency between the plethora of global, regional and bilateral trade agreements and develop a framework for how they can be scaled up into a global, WTO-led agreement.
The research shows that countries benefit most when trade liberalisation happens globally, but the “noodle bowl” of existing trade agreements is a nightmare for exporters to navigate. Australia, as a strong advocate for free trade, is well placed to show leadership on this issue.
Outcomes on trade are also vital for inclusive growth. Research shows that the poor can afford 63% more goods and services because of free trade, more than twice the benefit that flows to the rich.
Do politicians read history any more? Liberal MPs who have not read Robert Menzies’ Afternoon Light: some memories of men and events (1967) should get it from the Parliamentary Library and read Menzies’ chapter on “my humiliation of 1941”. He writes:
There was a strong view that, having regard to our precarious parliamentary position, my unpopularity with the leading newspapers was a threat to the survival of the government. It followed that, although they had a warm appreciation of what I had done as prime minister, a change in the leadership was called for.
Menzies resigned, and Country Party leader Artie Fadden succeeded him as prime minister. Five weeks later the government fell: two previously supportive independent MPs switched their allegiance after Menzies was pushed from office. Labor was in power for the next eight years.
Key participants in the current Liberal leadership drama know a similar dynamic is at play. “If Malcolm isn’t PM, Shorten will be,” one says. “If Abbott took over, several people would retire and the government would fall.”
This echoes the Rudd-Gillard-Rudd turnstile, redolent with the same animus. But with fringe right parties feasting on the margins of conservative political discontent in Australia, deeper questions are being asked about whether the Liberal Party itself is at risk.
Menzies famously welded several conservative political entities into a new one, the Liberal Party, in 1945. He then led it to victory at its second general election outing in 1949. Its lineage, Old Testament-style, is this. The Free Trade Party and the Protectionist Party of the early Federation era fused into the Commonwealth Liberal Party, which begat the Nationalist Party of Australia, which begat the United Australia Party which, with Menzies as midwife, begat the Liberal Party of Australia.
Thus party reconfigurations on the conservative side of politics in Australia, while only occurring around the edges post-second world war, were common before it and could be so again. Despite the sulphur and brimstone being whipped up by some commentators, however, this does not seem to be one such moment.
Fringe party flare-ups are common in Australian politics. Since the second world war the Democratic Labour Party (DLP), Liberal Movement, Australian Democrats, the Greens, and Pauline Hanson’s One Nation Party have all influenced the major parties’ room for policy and political manoeuvre. In this context, the latest, Cory Bernardi’s Australian Conservatives, is not unusual.
Nor is having to rely on minor parties or independents to form government unusual. Every federal Liberal government has been a coalition government, in league with the National Party (before the mid-1970s called the Country Party). This is despite Menzies’ private hatred of his coalition partner.
On the rare occasions the Liberal Party has had enough MPs to govern in its own right, it remained in coalition, mindful that forming government in more normal political times is impossible without it.
English academic David Runciman recently observed in the London Review of Books that Britain is now a “40:40:20 nation (where) deal-making is the essence of politics” – the “20” being MPs returned to Westminster from the Scottish National Party, the Liberal Democrats, and the Democratic Unionist Party, among others.
Since governments rarely have a majority in both houses of parliament in Australia, coalition-building and deal-making have always been everyday life in our polity. Minor parties come and go in such equations.
It is ironic that Tony Abbott, singularly incapable of acquiring and practising those skills as prime minister, should so successfully destabilise his successor Malcolm Turnbull who, with the Gonski 2.0 school funding legislation, seems finally to have worked out how to govern.
There is irony, too, in the fact that, as Liberals soul-search about whether to move further to the right, Labor strategists see the Coalition’s vulnerability as not moving quickly enough to the new centre on issues like marriage equality and, especially, the environment.
Affluent, educated, urban Liberal voters’ children are, in increasing numbers, not reproducing their parents’ voting behaviour but rather going Green. Abbott’s drive to double down the Liberals’ alignment with climate denialism could only compound this.
Christopher Pyne is as much a Liberal MP as Tony Abbott, and attempts to portray him as a pinko outlier are a travesty of conservative political history in Australia. Menzies called it the Liberal Party, not the Conservative Party, for a reason: he intended it to be a “broad church” of conservatives and liberals, not least because he understood how difficult it is to win office without bringing the centre along with you.
While mouthing “broad church” rhetoric, John Howard drove liberals out of the Liberal Party, and persecuted those, like Pyne, who survived the scouring. This shrank the liberal ballast protecting the party from an even sharper lurch rightwards.
Turnbull isn’t very good. “We limp towards defeat,” one Liberal wanly puts it. But that could be so much better electorally than the alternative. If Abbott again becomes the public face of the Liberals, prepare for it to become a very small party indeed.