Coalition tensions fuel energy debate
The Liberals’ Ian Macdonald has been around the federal parliament a long time, as he proudly boasts. He is the father of the senate and the parliament – the double due to his 27 years in the place. At this week’s meeting of the government party room he drew on all of this political experience to warn the Turnbull government was doomed.
Prompting his pessimism – shared to a greater or a lesser degree across the Liberal and National parties – was the Coalition’s 19th Newspoll loss in a row. It was also the eighth survey in a row for which the margin was at least a landslide six points behind Labor. There was but a one-point improvement over the last poll, dismissed by everybody who understands statistics as “nothing happening here”.
Macdonald, who delivers the impression of a rude and grumpy old man at senate estimates, told Malcolm Turnbull that he was leading a good government, doing good things with good ministers. Apparently this was said without irony but he added to the room, “The way things are going 30 of you won’t be here after the next election.” Turnbull thanked him for his frank assessment and the meeting ended.
Macdonald didn’t leave his dire prognosis completely behind closed doors. He didn’t take much prompting to spell out his frustrations on Sky News. He said it distresses him that voters, especially where he comes from in Far North Queensland, don’t understand how good the government is. The Coalition’s political message is not cutting through. He elaborated: “Our politics is not quite right. Shorten is beating us at that. Hanson is beating us at that.” He nominated same-sex marriage and the politicians’ citizenship imbroglio as distractions leaving voters cold.
“The medium is the message,” advised the late guru of media Marshall McLuhan. The medium here is the government itself; its message is of a fractious show barely holding together, so much so that Turnbull increasingly is seen to be governing for his party rather than the nation. A fragile one-seat majority leaves him little option, or at the least exposes his inability to exercise strong, credible leadership. Testing his courage are the threats to this wafer-thin majority should Deputy Prime Minister Barnaby Joyce or fellow lower-house National David Gillespie be found to be in breach of different subsections of section 44 of the constitution.
Macdonald, like many of his colleagues, is deluding himself if he thinks the spectacle of Joyce refusing to step aside from cabinet while there is a question over his eligibility is playing well with the public. It must go a long way to explaining why Newspoll isn’t moving.
This week Labor refused to drop its call for Joyce to sideline himself, and it was joined by the entire crossbench in its demand. Turnbull was made to look foolish when he insisted in parliament that Joyce isn’t budging because the government has “very, very strong” advice that the deputy prime minister’s tenure is constitutionally sound. This prompted Labor’s Tony Burke to ask why Joyce and his colleagues Fiona Nash and Matt Canavan have been referred to the High Court. Turnbull answered it was “to give the High Court the opportunity to clarify the law on the matter”. A stunned opposition followed up by asking the prime minister to advise how many other times his government has referred a matter to the High Court to provide it with “an opportunity”. Turnbull couldn’t recall any. Still, he insisted there were no doubts over his government MPs.
The stakes are very high here but Turnbull’s weak political position has forced him to gamble on the High Court not only making a novel interpretation of section 44 but also of how another section might apply to any of Joyce’s or Nash’s decisions while they remain. New light was thrown on this last point when in a television interview Canavan admitted he stood aside from cabinet on the advice of the solicitor-general. That’s the same solicitor-general whose “very, very strong” advice has apparently wiped out any doubt about Joyce and Nash. Turnbull refused to release this advice despite Labor finding a precedent from 1999, when John Howard as prime minister made public advice to clarify the status of a Liberal MP.
Labor has made it crystal clear it will not drop its pursuit of Joyce, each and every sitting parliamentary day. Claims by Turnbull and his ministers that this is playing parliamentary games ring very hollow indeed when the legitimacy of the government is at stake. Many Liberal backbenchers are furious with the Nationals. One says Joyce’s unwillingness to forgo his ministerial salary is being put ahead of the government’s best interests. A minister says it has more to do with him not wanting to let a Liberal get their hands on the resources, water or agriculture portfolios.
These Coalition tensions and jealousies aren’t far below the surface at the best of times. Turnbull fears they are about to erupt spectacularly as he confronts the need to come up with a credible energy policy. The release of the Australian Energy Market Operator’s annual Electricity Statement of Opportunities was as damning a report card as might be feared on the failure to find such an enduring policy over the past decade. It was a sad history of the crudest partisan politics that has put the national interest last.
How else can you explain the operator’s findings that blackouts and price spikes will hit this summer unless action is taken? Its most immediate concern was for Victoria and South Australia. But as coal-fired power stations in New South Wales reach the end of their lives the shortfalls will hit the biggest state. The Australian Energy Market Operator (AEMO) recommended establishing a strategic reserve with a $50 million price tag, which would utilise mothballed gas and diesel generators to minimise the risk.
There is no doubt this shortfall has a lot to do with former prime minister Tony Abbott’s war on renewables, which saw projects cancelled and investments diverted overseas. Such projects would have by now been generating power. This, and the scrapping of the so-called carbon tax – always a misnomer, dishonestly applied by Abbott, as his chief of staff Peta Credlin has famously admitted – left the market confused and unwilling to seek funding for new power generation. Such funding from banks would have put no premium on new coal-fired projects in any case.
The AEMO also noted energy distribution could be better managed through what’s called the Reliability and Emergency Reserve Trader provisions. These reward businesses and other consumers who refrain from using power in peak-demand periods.
In a sure sign Turnbull is caught in a coal policy vice applied by the Nationals and the Abbott Liberals, he seized the report to claim that prolonging the life of the AGL-owned Liddell power station in the Hunter Valley was the best way to assure energy security at the cheapest price. The AEMO made no such recommendation and its report shows it is not necessary to keep Liddell going.
Turnbull was made to look foolish when his claims in parliament that he was having discussions with AGL to keep the power station going for another five years were quickly contradicted by the company. Its boss, Andy Vesey, tweeted: “We’re getting out of coal. We committed to the closure of the Liddell power station in 2022, the end of its operating life.” Panicked phone calls by Turnbull to Vesey enabled the PM to tweak his story two hours later at a doorstop. He said that while AGL wants to get out of coal it is “prepared to sell [the Liddell power station] to a responsible party, and that’s what we are talking about.”
Shadow energy minister Mark Butler accused Turnbull of “making it up on the run”. Butler has renewed his offer to have serious discussions with Turnbull and his relevant minister, Josh Frydenberg, to end the energy wars. Butler is prepared to embrace the Finkel report’s clean energy target as a way of giving the market bipartisan certainty. He would do so despite Labor’s druthers for an emissions intensity scheme that would save consumers an estimated $15 billion over a decade but with a more accelerated demise of coal power.
Maybe the government thought more of it but plans to trumpet in question time on Wednesday that a buyer had already been found for Liddell were shelved. That was maybe because the touted buyer, Delta Electricity, was demanding bipartisan assurances before it stumped up the cash for an aged plant that could cost half a billion dollars to refurbish for an extra life span of just five years. No one could see the economics of that without an enormous injection of taxpayers’ funds. Talk about market failure – and yet more evidence of neoliberal economics meeting its use-by date at the same time as Liddell.
Turnbull was just as unsuccessful in using the North Korean nuclear threat as a diversion from the woes buffeting his government. The opposition took every opportunity in parliament to be in lock-step with the government’s response.
Kim Jong-un is a threat to us all. The threats specific to Turnbull’s survival are clinging to their seats behind him on the government’s benches. The prime minister’s win in the High Court on the same-sex marriage survey may give them pause to think again.
This article was first published in the print edition of The Saturday Paper on Sep 9, 2017 as "Lost for power". Subscribe here.