Comment

Paul Bongiorno
Littleproud comes before a fall

Fresh from the papal inauguration in Rome, and after Leo XIV blessed the prime minister’s late mother’s rosary beads at his request, Anthony Albanese could be excused for thinking God is on his side.

Much has landed for Labor this week, from further evidence inflation has been tamed, to the Australian Electoral Commission confirming the electoral landscape has a historically distinctive red glow about it, to the Coalition imploding when the Liberals and Nationals split.

From a retail politics point of view, nothing is more significant than the Reserve Bank of Australia’s new Monetary Policy Board deciding to cut interest rates by a further 25 basis points to 3.85 per cent. The reason was spelt out in the first line of its statement: “Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance.”

Jim Chalmers was quick to claim this as very welcome relief for millions of Australians. The treasurer trumpeted that both headline inflation and underlying inflation are now within the RBA’s target band “for the first time in almost four years”.

In what was surely a proud boast, burying the doomsaying of the election campaign, Chalmers added that it was “the first time since records began that we’ve got the unemployment rate in the low fours at the same time as we’ve got both measures of inflation in the target band”.

Markets are now expecting further rate cuts to follow, which at face value is very good news, but RBA governor Michele Bullock also had her eye on the dark cloud behind this silver lining. At her post-announcement news conference, she amplified the board’s real concerns over the global uncertainty created by United States President Donald Trump’s unpredictable and erratic disruption of the international trading order.

In its quarterly economic outlook the bank used the term uncertain on 132 occasions. It canvassed various scenarios, but its best guess was that Trump and tariffs will lead to slower growth in Australia, a small rise in unemployment, and inflation edging to the middle point of the 2-3 per cent target band.

Bullock revealed the board had discussed a rate cut of 50 basis points but settled “confidently” on half of that for now. While some economists believe the bigger cut was overdue, it seems a more aggressive easing is being kept on hold.

The uncertainty is not restricted to the economy. Labor’s comprehensive rout of its opponents has left them reeling and in disarray. Tuesday’s news cycle was swamped with the Nationals’ announcement that they were abandoning the coalition arrangement for the first time in almost 40 years.

Nationals leader David Littleproud attempted to blame Liberal leader Sussan Ley for the rupture and piously claimed it would give her the time and space for the Liberals to work out their identity crisis.

https://www.youtube.com/watch?v=Ic9G6MvPtQM&ab_channel=TheSaturdayPaper

Ley and her colleagues were at first puzzled as to why the Nationals wouldn’t simply renew the coalition in the usual way, concerned with administrative matters such as ratios of frontbench positions. Instead, they presented Ley with an ultimatum to accept four policy positions before she and the Liberals had completed their own root-and-branch policy review.

Liberal deputy Senate leader Anne Ruston went on Insiders well aware that Littleproud was trying on this approach in his confidential negotiations with Ley. The Liberal leader later said her Nationals counterpart came in “good faith”, but there is evidence to the contrary. Littleproud came to blow up the show.

“It’s completely gaga,” was the reaction of one seasoned player, who said there were less damaging ways to put the political marriage on hold. Others said that everyone knows the two parties cannot possibly regain government going separately.

Ruston detailed how the relationship had worked for nearly 80 years. She said Liberal policy is developed in the Liberal party room, National policy is developed in the Nationals party room and “the Coalition policy is designed or is agreed to around the shadow cabinet table”.

Ley privately assured Littleproud the four policy demands could be relatively easily accommodated in time, with the Liberals almost certainly having no insurmountable objections to a regional future fund, divestiture powers for businesses abusing market power, a universal service obligation for communication companies and a lifting of the ban on nuclear energy.

The real crunch for Ley, however, was the Nationals also demanding that their shadow ministers would not be bound by cabinet solidarity. She rightly saw this as untenable. It would likely create the perception of the Coalition as an undisciplined shambles on major policy issues, especially regarding energy.

Ley deserves credit for seeing off the threat to the Liberals in the Littleproud play. She insists on the need to respond to “modern Australia” and for her party to “reflect modern Australia”. It’s pretty clear what she is telling the Nationals: after the past two federal election drubbings, the Liberals cannot afford to allow the sectional interests of the junior party to dictate the broader policy imperatives of a Coalition that needs to appeal to metropolitan voters.

On Thursday, the chaotic divorce was put on hold after Littleproud dumbfounded some of his colleagues by confirming he had indeed raised the issue of a Nationals waiver for shadow cabinet solidarity with the Liberal leader.

Littleproud was under enormous pressure after Ley, showing tactical daring, reached out to former Nationals leaders Barnaby Joyce and Michael McCormack, who were publicly urging a return to a coalition.

Littleproud then publicly reaffirmed a commitment to cabinet solidarity. This was the signal Ley needed to invite him to begin negotiations again, on the promise she would in the meantime delay naming a shadow cabinet and reconvene her party room to discuss the Nationals’ four policies ultimatum.

The prime minister gave the warring conservatives a two-month breathing space to get their act together when he announced the new parliament would not sit until July 22.

Ley says “it has always been the Liberal Party’s objective to form a coalition”, something that will demand compromise from the Nationals, who are still insisting that their suite of policies, which includes a commitment in some way to nuclear energy, is non-negotiable.

If this intransigence persists, the situation could become a much deeper fissure than the one engineered by then Queensland Nationals premier Joh Bjelke-Petersen in 1987. That separation lasted four months and ended only when the John Howard-led Liberals suffered a disastrous defeat at the winter election called by Bob Hawke to take full advantage of his opponents’ disarray.

Little wonder Howard is now condemning Littleproud’s desertion of the Coalition as a “stupid move”. He urged both sides to work hard “to put the Coalition back together, long before the next election”.

Howard said the problem of remaining too far apart for too long is that “attitudes harden and differences become deeper”.

It is hard to quibble with Jim Chalmers’ characterisation of where the rupture has left the opposition. He said it was a “nuclear meltdown” and the Coalition was now a smoking ruin. The treasurer said they are hopelessly divided on personalities and policy.

This is no doubt a reference to the antipathy many Nationals have towards Ley, who took the regional seat of Farrer from them after the retirement of former Nationals’ leader Tim Fischer.

Then there are the alpha male personalities of Barnaby Joyce and Matt Canavan, who are dedicated to scrapping the net zero emissions target. Canavan made it a plank of his tilt at the Nationals leadership two weeks ago and, according to Nationals sources, came much closer to defeating Littleproud than has been admitted.

In that showdown it was made clear that Littleproud needed to become more assertive in pushing the Nationals positions, based on a deluded view of the election result.

Geoff Chambers provided a reality check in The Australian. He pointed out that Littleproud has lost his deputy leader in the Senate, Perin Davey, as well as the Northern Territory’s Senator Jacinta Nampijinpa Price. The party experienced swings against it in most lower house seats and was unable to win Calare, Bendigo or Bullwinkel.

In his post-election address at the National Press Club, Labor Party national secretary Paul Erickson had some advice for his Liberal opponents.

He said elections are won when you learn the lessons from your defeats and escape the echo chambers on your own side. The Liberals, he said, should start “by abandoning a nuclear energy scheme that takes too long, will cost too much, will do nothing to meet our energy needs and was designed to kill off the transition to renewables”.

It’s a lesson the Nationals show every sign of refusing to learn. Unfortunately for Ley, about half of her party room are of the same mind.

Perhaps the Liberal leader could ask Albanese for a few tips on the power of prayer.

This article was first published in the print edition of The Saturday Paper on May 23, 2025 as "Littleproud as a peacock".

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