As NSW Liberals seek to differentiate themselves from their federal peers, Scott Morrison doubtless hopes for a Christmas miracle. By Karen Middleton.

Scott Morrison’s Christmas wish

The New South Wales Liberal Party has written off any chance of Scott Morrison’s government winning the 2019 federal election and has begun a concerted campaign to differentiate itself on policy and to pressure him to go to the polls in early March.

Senior NSW Liberal sources say the NSW government’s dramatic pre-Christmas attack on its federal counterpart over energy and climate change policy was just the start and would herald a series of deliberate public criticisms on a range of federal Coalition policies.

“This is the first one but there’s more to come,” one Liberal says.

The Saturday Paper has been told senior NSW Liberals are equating the party’s federal situation with that of 1983, when Labor under Bob Hawke swept the federal Coalition into Opposition for 13 years.

Just three months from their own state election – which NSW Liberals fear could replicate the recent Victorian result unless they differentiate from their federal peers – the message to colleagues is brutal: “This generation of politicians is as out of touch as they were in 1983.”

NSW Liberal sources say that, until now, they “haven’t seen anything like it” and that the Liberal Party needs to completely rediscover its values and rebuild. “There is a strong view that opposition can’t come fast enough,” a Liberal says. “The party needs opposition. It desperately needs opposition.”

The comments followed the NSW Liberal government’s extraordinary public attack over climate and energy policy – an issue that has been central to the dumping of leaders on both sides over the past decade.

NSW energy minister Don Harwin said the state government still supported the national energy guarantee (NEG), the policy the federal Coalition abandoned after removing Malcolm Turnbull as leader, and which Labor has now adopted.

“We are supporting the need to bring climate and energy policy together,” Harwin said after a volatile meeting of federal, state and territory ministers on December 19.

Harwin insisted he had the full support of the other states and territories and “the NSW team”.

“They want re-election and they want the silliness of Canberra to stop and for us to focus on getting a sensible national approach,” he said.

“Our position hasn’t changed. It’s the federal government’s position that’s changed and it’s not good enough.”

The federal energy minister, Angus Taylor, who had refused to let the meeting discuss the NEG, said the government was about getting “a fair deal” for businesses and other energy consumers.

“We got a good outcome,” Taylor said, after also refusing to set a formal emissions reduction target and accusing Labor of risking a recession.

“We didn’t get distracted and we won’t get distracted. We have a very clear focus. Get prices down. Keep the lights on.”

The NSW government is pressing Morrison to do what predecessor Turnbull had planned – go to an election in early March, before the NSW state election at the end of the month, rather than waiting until May.

One Liberal said it was the only way the party could continue to hold the state with “the biggest economy in Australia”.

Another told The Saturday Paper some key NSW figures were also acting out of personal, political and commercial self-interest.

A number of other agendas are running, too, not least fury among Liberals at the Morrison government’s moves to force energy companies to divest if they don’t bring down power prices.

Critics say it directly contravenes the first line of the party’s own platform: “We believe in the inalienable rights and freedoms of all peoples; and we work towards a lean government that minimises interference in our daily lives; and maximises individual and private sector initiative.”

“It’s flabbergasting,” one remarks. “… We’re relying on the Labor Party to be defending free enterprise?”

The Liberal brawling contrasted with scenes at the Labor Party’s national conference, which wound up in Adelaide with a highly orchestrated display of reconciliation between former prime minister Kevin Rudd and those he blames for dumping him eight years ago.

“You know, we had our occasional disagreements,” Rudd told the conference, a little facetiously. “Just here and there, at the margins, but you know something, we all have written our bit and I just have a simple suggestion: Let’s let history be the judge of these things.”

Labor bestowed life membership on Rudd and his wife, a visibly emotional Thérèse Rein.

“Reconciliation matters,” Rein said. “And being part of this great movement, the Labor Party, has been an enormous part of my life and it’s good to feel like I’m home.”

Former prime ministers Paul Keating and Julia Gillard were similarly honoured in absentia, Gillard posting a message of thanks on Twitter. Shorten paid tribute to them all. He and Rudd shook hands.

“There has been a lot of pain,” Shorten said. “But today I say to the conference, it is time for healing, to make peace with our past in the same way we are united about our future.”

Labor’s all-is-forgiven display was at least as much about Shorten as it was about Rudd, designed to demonstrate that if Rudd could endorse the man instrumental in his ousting then Australian voters should, too.

The shadow finance minister, Jim Chalmers, acknowledged it had not been easy for any involved, including newly elevated party president and former federal treasurer Wayne Swan.

Rudd’s bitterness towards Swan for backing Gillard’s challenge – and Swan’s towards Rudd for subsequently undermining her prime ministership – is well documented.

“I was really proud of Swanny,” Chalmers told Sky News later. “… I thought that was a real symbol that we understand that we’ve had our barneys in the past but they belong in the past and that we can’t mess around here. We are asking for something pretty simple but pretty serious. We’re asking the Australian people for the opportunity to govern in their interests.”

And for that, the Labor Party needed a grand gesture of unity – the greatest it could muster.

The usually robust factional debates at the three-yearly conference were replaced largely by prenegotiated compromises on immigration, the level of Newstart and other contentious issues.

The left faction failed to secure commitments to abolish offshore processing and boat turnbacks, and had to accept a general promise to review the level of unemployment benefits rather than a specified rise.

The unions won support, controversially, to reintroduce industry-wide bargaining, something the government said would jeopardise a stable economy.

In NSW, anti-corruption investigators raided the party’s headquarters in Sydney while senior officials were away at the conference, searching for material related to fundraising in the Chinese community. Labor said the donations had already been “fully investigated”.

The government had attempted to end the political year on a high, deliberately scheduling the release in Canberra of its midyear budget update to coincide with Labor’s conference.

The midyear economic and fiscal outlook, or MYEFO, revealed employment growth, strong tax receipts and cuts to welfare outlays had fuelled a forecast surplus next financial year double what was in the May budget.

It also showed the government has squirrelled away more than $9 billion in “decisions taken but not announced” – expected to be spent on tax cuts as a pre-election sweetener.

Another $1.4 billion was earmarked for unspecified spending this financial year.

Economist Saul Eslake points to some 2019 downside risks in both the MYEFO document and the also-released minutes of the Reserve Bank board’s December meeting, including the housing downturn and a deterioration in the global economy. MYEFO also showed growth last quarter had been slightly slower than expected.

Eslake told The Saturday Paper that whoever was in government next year would have fewer levers to pull if recession threatened than when the global financial crisis hit 10 years ago, with official interest rates already much lower than they were then.

He said if the economic outlook were to deteriorate markedly over the summer months, it might be smarter holding back the $9 billion for potential direct stimulus measures, not spending it on what fellow economist Stephen Koukoulas called an average-earner tax cut of “six bucks a week”.

Ahead of what would be mixed employment figures to end the year, Josh Frydenberg was emphasising the upside.

“These new MYEFO measures and initiatives are only possible because the Australian government’s books are the best in over a decade,” he said. “… The Australian economy is on the right track, giving us much to look forward to.”

But less than an hour after he and Finance Minister Mathias Cormann had finished their triumphant news conference on December 17, the Nationals stole the headlines with a sensational own goal in the form of a new sex scandal, this one involving assistant minister Andrew Broad.

The Victorian MP has announced he won’t contest the next election after New Idea magazine published details of a trip to Hong Kong to meet a woman he met on a “sugar daddy” website. He repaid almost $500 in taxpayer funds used as part of the jaunt.

Deputy Prime Minister Michael McCormack also came under pressure and was forced to correct the record to acknowledge he’d been told about the incident a full six weeks earlier, well before parliament rose for the year. That may yet return to haunt him.

The Greens weren’t spared a little dirty laundry to end the year either, with NSW MLC Jeremy Buckingham quitting the party to sit as an independent, denying allegations a female colleague made under parliamentary privilege of sexually inappropriate behaviour.

Scott Morrison ducked out on the worst of the Coalition clean-up, slipping away to visit troops in Iraq, thanking them for their service and presenting them with footballs for Christmas.

The prime minister now has the summer to contemplate what next year may bring, doubtless reminded – not least by his own colleagues – that it really is better to give than to receive.

This article was first published in the print edition of The Saturday Paper on December 22, 2018 as "Divide to conquer".

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