Liberals to make Nationals reform nightmare a reality after Coalition split

Labor’s contentious environmental reforms could pass with support from the Liberal Party after the Coalition split, as Opposition Leader Sussan Ley says she will work with the government on changes bitterly opposed by the Nationals during the previous term of parliament.

The former Coalition’s pledge to create powers that could break up supermarkets will also be reconsidered by the Liberals, several of whom want the party to form a fresh position despite the Nationals’ insistence that divestiture powers must be part of any future agreement.

Opposition Leader Sussan Ley says she will remake the Liberal Party to reflect modern Australia.Credit: AAP

Ley will appoint a new opposition frontbench by the end of the week, composed exclusively of Liberal MPs after the Nationals’ defection. Liberals expect Senator Jacinta Nampijinpa Price’s portfolio of government efficiency to be scrapped over comparisons to Elon Musk’s department in the Trump administration.

“We are un-DOGEing the Liberal Party,” one senior Liberal who asked to remain anonymous so they could discuss internal party matters said.

While Ley and Liberal MPs lamented the Nationals’ decision to leave the Coalition on Tuesday, they will now reset to review their policy suite without pressure from the junior party. Ley has committed to represent modern Australia, and re-elected Liberal MP Tim Wilson on Wednesday said the Coalition split gave the party a “really exciting opportunity” to define itself in its own right.

“We’ve got to find our Liberal mojo juice if we want to be able to get on and represent the capital cities where the overwhelming majority of Australians are, and of course, this is an opportunity to do that,” he said on Sky News.

Environmental reforms will be one of the first issues raised in the new parliament – both Environment Minister Murray Watt and Prime Minister Anthony Albanese have declared it an urgent priority after Labor’s “nature positive” bill to create a new watchdog fell over last term. The reforms would include new national environmental standards within the flagship Commonwealth protection laws as well as the creation of an independent body to monitor project development.

Ley, as environment minister in the former Morrison government, sought to reform nature laws with added protections for native wildlife. But she was ultimately blocked by the Coalition party room given strong opposition from the Nationals, who warned her reforms would cripple mining and agriculture under the burden of “green tape” regulations.

A spokesman for Ley on Wednesday said the Liberal Party would “work constructively with the government in the interests of all Australians”, when asked whether the party would work with Watt.

“The simple test for all Labor’s ministers, including Murray Watt, is to bring forward sensible policy that is in the national interest,” he said.

“When it comes to the environment portfolio, Tanya Plibersek clearly failed that test, which is why she has been moved on. We hope minister Watt has what it takes to clean up her mess and we await to see what he produces.”

The National Farmers’ Federation praised Ley’s “constructive tone” and urged the Liberal and Labor parties to work together and shut out the Greens.

“Murray Watt is pragmatic, and if he can find support for smart, pragmatic reform, it could be a win,” said federation president David Jochinke.

The national mining lobby told this masthead it backed environmental reform and also wanted Labor to work with Ley rather than the Greens.

“I would hope that both the Liberals and Nationals are pragmatic in their approach to something that is important for the economy, that we get good environmental outcomes, and we could get good outcomes for business,” Minerals Council chief executive Tania Constable said.

As the Liberals review all policies, several MPs said the split from the Coalition would allow them to revisit divestiture powers – a sticking point for the Nationals that half a dozen Liberals strongly opposed in party room discussions last year.

“The intent behind that policy is to make sure the market is functioning properly, that big players are not enjoying unfair pricing or bargaining power at the expense of consumers or suppliers,” said one Liberal.

“There are people who thought the aims of that policy could be better achieved by other means.”

Credit: Matt Golding

Another said: “Damaging private investment, damaging business, can result in higher prices for consumers. We’re not going to go to the next election saying Australians should pay more for stuff.”

Ley has said she wants policies that reflect modern Australia. When she names her frontbench this week, Liberals expect Price’s former “government efficiency” portfolio will be shelved.

Price could be given responsibility for deregulation, but she will be competing with several Liberals jostling for promotions to newly vacant spots on the frontbench.

Deputy Liberal leader Ted O’Brien is expected to be shadow treasurer, while conservatives Angus Taylor and Andrew Hastie will both be offered senior frontbench roles. Hastie has told colleagues he wants to move into an economic portfolio.

Wilson is likely to be elevated, as is centre-right leader Alex Hawke. James Paterson is expected to stay in home affairs or move to defence, while other conservative MPs who were close to Peter Dutton may be dumped to the shrinking cohort of MPs to become Liberal backbenchers.

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