Liberals and Nationals closer on Coalition fix, spotlight moves to Littleproud leadership

The Liberal and National parties are inching towards reforming the Coalition after Liberal MPs gave Sussan Ley in-principle agreement for most of David Littleproud’s policy demands, but speculation is growing about Littleproud’s future as leader of the regional party.

Ley convened a lively party room meeting on Friday afternoon at which her MPs gave their leader the authority to strike a deal with the Nationals to create a joint shadow cabinet by the time parliament resumes, days after Littleproud sparked chaos by splitting from the Liberals.

Nationals leader David Littleproud addresses the media at Parliament House on Thursday.Credit: AAP

Critically, the Nationals ditched the plan to build seven nuclear power sites, paving the way for a watered-down Coalition policy to merely lift the moratorium and allow for potential private investment into nuclear energy.

The in-principle agreement does not extend to the precise details of Littleproud’s demands, which are still due to be thrashed out in a shadow cabinet. Moderate Liberal MPs expressed concerns about Littleproud’s demand, first reported in this masthead, to extend forced supermarket break-up laws to big-box retailers such as Chemist Warehouse and Officeworks.

Liberals also have doubts about the administration and funding of the $20 billion regional building fund, highlighting the potential for a bumpy path back to reunification.

The turbulent week in right-wing politics has led to chatter inside the Nationals about whether Littleproud could survive the affair.

Liberal leader Sussan Ley during a press conference on Tuesday.Credit: AAP

His leadership is bolstered by the lack of widespread support for any other contender, but former leader Barnaby Joyce told at least one colleague on Friday that Littleproud’s position was precarious.

Joyce has been unwell and does not have the numbers to win. But according to party sources unable to speak publicly, Joyce told colleagues he would be open to supporting another former leader, Michael McCormack.

McCormack stressed on Friday morning that Littleproud was not under threat. But asked if he fully backed Littleproud, McCormack uttered the same words as Scott Morrison did in the days before toppling Malcolm Turnbull: “I’m ambitious for him”.

“It’s been messy, it’s been really messy and for people on the outside looking in they just wonder what the hell is going on,” McCormack said on ABC Canberra.

One Nationals MP, who asked not to be named so they could speak freely, said “the clock is now ticking” on Littleproud’s leadership, but his backers insist such talk is hypocritical because his decisions were made in conjunction with his MPs.

“Three people have significantly damaged themselves this week, David, Bridget [McKenzie] and Kevin [Hogan]. And this was all self-inflicted. I’m not sure if David is terminal but it has been a very bad week,” the second Nationals MP said.

Senior Nationals MP Darren Chester told Sky News that he backed Littleproud “without equivocation”.

“It was only a matter of 12 or 13 days ago, David was elected by our party room ... so people do need to remember that the decisions that were taken this week were taken with the majority support of the party room,” he said.

Nationals senator Matt Canavan, who challenged Littleproud for the leadership, said: “David has done a great job for the Nationals this week and he has delivered real results after the Liberals’ backdown”.

“I know the Liberals are unhappy, but if some of them fought the Labor Party as hard as they have been fighting the Nats this week, we may have done a lot better at the election,” Canavan said.

Before Friday’s virtual hook-up, the Liberal Party leadership released a document to MPs outlining in detail Littleproud’s wishes.

The policy document, obtained by this masthead, confirmed the Nationals were no longer wedded to using public funds to build nuclear reactors at seven sites around the country.

The demand, as expressed to Ley and outlined in the document, was: “Commit to removing the moratorium on nuclear energy at a minimum, with a review of the remaining elements of the nuclear policy.” Littleproud also suggested on Thursday that his nuclear energy demand extended only to lifting the moratorium.

The watered-down demand from the Nationals, which led the charge for nuclear power, indicates that the proposal to spend billions on nuclear sites is viewed as politically tricky even by the regional party, potentially consigning the plan to the dustbin of political history.

The Liberals’ document states such a move would not be a troublesome break from the current position, indicating the demand was likely to be accepted by the party despite some discomfort with the energy plan.

Liberal senator Maria Kovacic, a party moderate, called for nuclear energy to be scrapped two weeks ago after Labor made its high cost – which it misleadingly claimed would be $600 billion – a key focus to discredit Peter Dutton’s economic credentials during the election campaign.

On Littleproud’s other requests, the document showed he was seeking $1 billion per year for a regional building fund that was not agreed to pre-election. The document also states his request for “big-box” retailers to be added to the policy for divestment of anticompetitive supermarkets might be a small step further than the pre-election plan.

And on expanding the universal mobile service obligation in the regions, the document noted the policy “was not agreed through a formal process but announced during the campaign” by Littleproud.

Littleproud announced he would split from the Liberal Party on Tuesday before agreeing to resume talks on Thursday after Ley told him she would convene her MPs to assess his demands. Ley’s move was triggered by Littleproud saying for the first time on Thursday morning that he would honour shadow cabinet solidarity in a coalition.

Without telling his party room, Littleproud had earlier asked Ley if Nationals in a shadow cabinet could publicly dissent on agreed policies such as the net zero climate target; Ley flatly rejected the demand and Littleproud’s Nationals allies were frustrated he had not told them about his request.

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