Australian Prime Minister Malcolm Turnbull in the House of Representatives at Parliament House, in Canberra. Picture:.AAP/Lukas Coch/via REUTERS
Australian Prime Minister Malcolm Turnbull in the House of Representatives at Parliament House, in Canberra. Picture:.AAP/Lukas Coch/via REUTERS

Canberra — Australian Prime Minister Malcolm Turnbull was battling for his job on Wednesday after narrowly surviving a leadership vote, as his chief rival prepared to mount another challenge.

While Turnbull called for unity after defeating home affairs minister Peter Dutton in the ballot of Liberal Party MPs on Tuesday, more fractures emerged within the government.

A raft of ministers who voted to oust the prime minister offered to resign, while Dutton took to the airwaves, saying he was the best hope for reversing the government’s slumping poll ratings and winning elections due by May.

The potential for another change of leadership adds more uncertainty for businesses in a nation that has endured repeated policy missteps and flip-flops over the past decade. Since 2007, Australia has switched prime ministers five times, and none has lasted a full term. Turnbull, who himself came to power in 2015 in a party coup before winning the 2016 election with a razor-thin majority, has struggled for both policy traction and political authority.

Dutton, a former policeman who has become a lightning rod for disaffection with Turnbull’s policy direction, mounted a media blitz on Wednesday styling himself as a future leader, promoting populist policies including cutting taxes on power bills and reducing immigration. After losing to Turnbull by 48 votes to 35 on Tuesday, he resigned from cabinet — and is clearly seeking to build support for another challenge that may come before parliament goes on a two-week break on Thursday.

Asked in a radio interview on Wednesday if he was "working the phones" to win more support from Liberal colleagues, Dutton said: "Of course I am. I’m speaking to colleagues. I’m not going to beat about the bush."

Turnbull, flanked by key backers treasurer Scott Morrison and finance minister Mathias Cormann, told reporters later on Wednesday that he was seeking to ensure the stability of the government and he remained leader by "the iron laws of arithmetic".

Dutton’s backers are a handful of votes away from securing the majority of Liberal legislators needed to bring on another challenge, The Daily Telegraph reported.

Even if Turnbull makes it through the week, the turmoil and dissent within government means he is unlikely to pass substantive policies before the next election. That is good news for Bill Shorten, whose Labor Party led the ruling Liberal-National coalition by 10 percentage points in a poll released on Monday.

"The ability of this government to produce meaningful policy positions has been greatly compromised because the authority of the prime minister has been severely weakened," said Martin Drum, a senior political lecturer at Notre Dame University in Perth. "Shorten is a winner from this."

Ministers resign

A raft of senior Liberal legislators, including trade minister Steven Ciobo and health minister Greg Hunt, offered their resignations on Tuesday evening after backing Dutton in the ballot. International development minister Concetta Fierravanti-Wells quit, saying the traditionally centre-right government has drifted too far to the Left under Turnbull.

"My conservative base has been very concerned about the direction of the government," she told reporters on Wednesday. "I think it’s very important for any government, particularly a coalition government, to have the appropriate balance of moderates and conservatives."

Turnbull’s supporters insisted that switching leaders would be electoral suicide. Foreign minister Julie Bishop, who is deputy Liberal leader, said on Wednesday the prime minister maintained majority support in the party. Nevertheless, speculation was rife on Wednesday that other ministers may throw their hats into the ring, with the Australian newspaper reporting Morrison was gauging support for his own potential challenge.

Dutton is seen as a leader of the party’s right-wing, and has risen to prominence as a staunch supporter of the government’s hardline policy of detaining asylum seekers in offshore camps. He is been accused by human rights advocates of creating racial division by urging a crackdown on "African gang violence" in Victoria state. He criticised Alan Joyce for using his position as CEO of Qantas Airways to advocate for legalising same-sex marriage.

Dutton has used a raft of television and radio interviews since his narrow loss to outline his populist policy manifesto, including removing a tax on electricity bills for families and pensioners, a wide-ranging investigation into energy companies, and cuts to immigration to ease city congestion.

Turnbull’s authority over the party, which is divided between moderates and conservatives, has always been in doubt. The self-made millionaire and former Rhodes scholar, who led an unsuccessful push for Australia to become a republic in 1999, is regarded as too liberal by the party’s right-wing rump.

Since seizing the leadership from Tony Abbott in a party ballot in 2015, he has retreated from some of his most strongly held convictions, including tough action against climate change, in a bid to appease conservative forces in the party.

With only a one-seat majority after the 2016 election, he has struggled to gain momentum. While he oversaw legislation allowing same-sex couples to marry, shrunk the budget deficit and enacted tax cuts for small businesses, other policies have been stymied in parliament or his party room. Proposed tax cuts for bigger businesses were blocked in the upper house Senate on Wednesday and Turnbull told reporters he would not take the policy to the next election, citing a lack of political consensus on the issue.

A planned A$49bn ($36bn) broadband network, designed to thrust Australia into the forefront of the digital revolution, was plagued by cost overruns and construction delays. Sniping between state and federal governments has stalled crucial infrastructure to ease crippling traffic congestion.

Earlier this week, Turnbull de-fanged his signature energy policy, which was drafted to give voters cleaner, cheaper power — a move that came after Dutton and others demanded the government provide more support for the coal industry and abandon its Paris Agreement emissions target.

All of the chaos is helping the Labor Party, which is pledging to ramp up spending on education and hospitals if it wins the next election. It also wants to reduce tax breaks for property investors to address generational disparity.

"Australia has a prime minister in name only — without power, without policies," Shorten said on Tuesday. "If nearly half of his own government do not want him to be the prime minister, why should the rest of Australia have to put up with him?"

Bloomberg

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