Pro-coal right comes after Turnbull
The frustration down the phone was palpable. “Does this prick know or care about how much damage he is doing to the government?” The Liberal marginal seat-holder was reacting to his colleague Craig Kelly becoming the mouthpiece for a new ginger group aimed squarely at blowing apart Malcolm Turnbull’s signature energy policy, the national energy guarantee. The group calls itself the Monash Forum, and comprises a number of government backbenchers who are pushing for new coal-fired power stations.
“It’s no accident,” came a similar despondent response from one of Turnbull’s closest advisers. “You had Peta Credlin on Sky [News] revealing the existence of the Monash Forum, then it was followed up next day with front-page treatment in The Australian and Kelly giving multiple interviews.” The purpose of the multi-pronged assault, in the adviser’s view, was to ensure the Newspoll due out on Monday would be the 30th in a row where the Coalition trailed Labor.
If these reactions are right, innocent bystanders are surely entitled to conclude that the government has within its bosom a squad of kamikaze pilots intent on doing more damage to it than its political opponents in the Labor Party can manage. The spectacle of a Coalition at war with itself does nothing to assure the nation it is led by a cohesive, stable government putting the national interest ahead of personal ideological fantasies.
The latest average of the published opinion polls has Labor’s lead shrinking slightly to five points. The latest Newspoll had a six-point gap. It is hard to see it moving dramatically enough in the past fortnight to reverse the trajectory of the past 18 months. An outlier is always possible, but given Turnbull’s luck it is highly unlikely. Clearly, his internal critics are doing their best to ensure his numbers stay where they are.
The Monash Forum, named after Australian war hero and engineer Sir John Monash, who opened up the Latrobe Valley’s brown coal reserves, has among its members former prime minister Tony Abbott and former deputy prime minister Barnaby Joyce, both now brooding backbenchers. They are joined by two other former senior ministers with a Turnbull grudge, Kevin Andrews and Eric Abetz. Andrews is credited with writing the forum’s manifesto and serial renegade George Christensen was charged with disseminating it. He claims up to 30 Liberal and National backbenchers support it, although only 20 have signed up to it.
This flies in the face of the cabinet and the government party room having endorsed the national energy guarantee last year, something Turnbull reminded us of during the week. His exasperation was provoked by the fact that he says the guarantee makes room for coal to be part of the energy mix because its “dispatchability” ensures security of supply. Sure, there are environmental criteria to be met and huge hurdles. The biggest is finding investors prepared to stump up billions for an asset with no guaranteed future. But the guarantee doesn’t forbid it.
The problem is the insurgents see the guarantee as Turnbull trying to con them with his talk of being “technology neutral”. They are unprepared to accept this compromise, even though it makes room for coal. The prime minister has already capitulated to these coal champions, torpedoing his preferred clean energy target last year. But these critics pay no heed to the price Turnbull has already paid by tarnishing his green credentials. They saw his demonising of renewables after the South Australian blackouts as a ruse when he then announced he was prepared to spend billions on Snowy Hydro 2.0. They are now demanding he come up with a similar commitment to build new coal-fired power stations and even buy back electricity-generating assets that were privatised in line with Liberal holy writ.
This trashing of the Liberal Party’s defining philosophy has some on the back bench shaking their heads. It is one thing for the Nationals, often dubbed agrarian socialists, to call for a renationalisation of energy supply. It’s quite another for the champions of market forces and free enterprise who are supposed to inhabit the Liberal Party room to do so.
Ironically, it puts the Craig Kelly gang in the same camp as the Greens. It makes a lie of this claim from Richard Di Natale at the National Press Club: “The Greens are the only party proudly arguing for a much stronger role for government.” Di Natale went on to call for “renationalising parts of Australia’s electricity system”. With some Victorian Liberals also calling for their state to take back the decommissioned Hazelwood power station in the Latrobe Valley, you couldn’t get a more dramatic rejection of the validity of their own party’s policy prescriptions.
As the debate raged, Turnbull emerged as a broker, encouraging a buyer for the AGL-owned Liddell power station, due to close in 2022. It is Alinta Energy, owned by Chinese company Chow Tai Fook Enterprises. The company thinks it could pick up the ageing and unreliable generator for a song. And it would have no trouble with the Foreign Investment Review Board, thanks to Turnbull’s backing, unlike two other Chinese corporations, blocked from ownership of New South Wales energy distribution assets.
The plan is to give Liddell seven more years of life “until Snowy 2.0 comes on line”. It’s a great outcome, according to the prime minister. Labor’s Bill Shorten says he has no problems with AGL and Alinta doing a deal if they think it stacks up in a commercial sense, but he says he’s not up for “Mr Turnbull using taxpayer money to spend on old coal-fired technology just to ensure his own political survival”.
Apart from the fact that “the right wing of the Liberal Party doesn’t like Turnbull”, as Shorten says, the motivation of the Monash Forum is based on an unrealistic nostalgia. It is as if Tony Abbott had not scrapped the carbon tax, and the promise of delivering cheaper electricity has not been shown to be strikingly false. After five-and-a-half years of Coalition government, electricity prices are at the highest level in our history. What would Abbott have done with that if the boot were on the other foot?
In many of his interviews, Kelly peddled the old lie of the need for coal as a “low-cost electricity for consumers and industry”. It no longer is, especially as old generators reach the end of their lives and are replaced by much more expensive “high-efficiency low-emission” power stations. This is something treasurer Scott Morrison pointed out midweek, as he rebuffed calls for government subsidy from Kelly, Abbott, Joyce and their friends.
What is conveniently ignored in all of this are Australia’s commitments, given at the 2015 Paris climate conference. With Abbott as prime minister, we signed up to a transition from heavy reliance on fossil fuels to renewables. We would play our part in achieving global net zero greenhouse gas emissions by 2050, so as to keep the planet’s temperature rise to below 2 degrees. A cynic could say none of today’s combatants will be around to wear the blame for any contribution to failure their intransigence may cause. Labor’s Mark Butler says the Opposition is still looking for a bipartisan solution that gives long-term certainty for investors and meets those goals.
Kelly doesn’t admit to government infighting or Turnbull’s capture by the right as the reason for the poor run in the opinion polls. He puts it down to having to take tough economic decisions to restore the budget. Turnbull is doing a very good job, he says, “and we will see those polls tighten up as we get closer to the next election”. But will Turnbull still be there? Kelly uses the same formula often heard before the boom comes down on a leader: “Prime Minister Malcolm Turnbull has my full support.”
The budget is due in four-and-a-half weeks and is Turnbull’s next big chance to impress his party room. There’s a lot of pressure on Treasurer Morrison to produce a winning pre-election fix. Already, income tax cuts have been flagged, setting the scene for an auction with Labor and horrifying former treasury secretary Ken Henry as “theatrically absurd” in the current state of the books.
There’s also speculation that baby boomers, the postwar generation who many believe have had it too good most of their lives, will come in for special mention to neuter Bill Shorten. A promise not to touch their superannuation arrangements again and certainly not to tighten up on concessions such as dividend imputation cash handouts is expected to feature.
Polling analyst Andrew Catsaras says hoping for a “budget bounce” is like the search for Lasseter’s Reef: “It’s just not there.” He says the wisdom that says budgets fix governments is a myth. A good example was Treasurer Peter Costello’s pre-election 2007 budget. Its overly generous tax cuts were immediately matched by Labor and a raft of other expensive lures left voters unmoved. Costello and Howard lost that election.
The parallels are hard to ignore. Costello’s efforts were to claw back Labor’s year-long lead in the polls. If Catsaras is right, the Liberals may resort to plan B: a new leader. Their problem, there is no standout alternative.
This article was first published in the print edition of The Saturday Paper on Apr 7, 2018 as "Forum or against?". Subscribe here.