Sussan Ley buys time as Liberals stake revival on net zero retreat
The Liberal Party has gambled on voters changing their minds on climate change by the next election … and the stakes could not be higher.
What has been decided for Sussan Ley by a majority of her colleagues cannot be underestimated. The stakes could not be higher. The image of the party’s conservatives, banded together, marching into Wednesday’s partyroom meeting, was an unmistakeable display of unity and strength. The symbolism was clear: we’re here to take back control of this party.
It marks a complete dismantling of Labor’s net zero architecture but, more fundamentally, key pillars of the Coalition’s own creation in government, including the safeguard mechanism that has endured through two elections.
This approach takes the party back beyond Scott Morrison and Malcolm Turnbull to a model fashioned by Tony Abbott against Julia Gillard’s carbon tax. And it’s a roll of the dice that rests almost solely on a future collapse in community confidence in Labor’s renewable energy future.
This is an Australian version of a reimagined UK Brexit moment, with energy costs the proxy for a battle between net zero leavers and the net zero remainers.
Ley’s grasp on the party’s leadership had been rapidly falling away. Whether she can now survive, and for how long, comes down to one fundamental question: can she lead?
Ley cut a lonely figure on Wednesday when she left the four and half-hour partyroom meeting without allies and without authority. Having failed to declare a position, she allowed the political vacuum to be filled by others, who dictated the course of events as she cut herself adrift from colleagues who, in the end, made the decision for her.
But within 24 hours, it was a different Ley who fronted the media, having finally announced a policy position she could fight for. Ley’s colleagues – even those opposed to her as leader – agree she must now be given time to do this.
Ley delivered a strong defence of the party’s position on Thursday after the shadow ministry landed on a broad-brushed policy erasing net zero and establishing the principles upon which a final policy would be developed.
At times her performance was clunky, but as a first outing even her staunchest critics concede that was to be expected.
“She did OK,” one conservative Liberal MP said. “What is clear from it is that we now have something to work with. And we are going to have to make it work.”
The cost and abundance of energy now becomes the primary objective of the Coalition’s energy and climate change plan. Emissions reduction is retained as a goal but, according to Ley, now becomes subordinate to the price and supply of electricity and gas.
On Thursday, Ley even signed off with a Howard-esque declaration that in government it would be the nation that decided Australia’s contribution to emissions – claiming she would deal with bureaucrats from Paris or the UN if they didn’t like it.
While all this was occurring in Canberra, indigenous protesters demanding an end to deforestation in what was once regarded as the world’s largest carbon sink, the Amazon, overran the global climate change conference in Brazil being attended by Energy Minister Chris Bowen. The juxtaposition of two conflicting approaches could not be more starkly illustrated.
In the end, Ley was faced with a Hobson’s choice, largely of her own making. Whichever way she was forced to go, divisions were destined to remain. The question Ley needed to ask herself was whether she wanted to lead a divided Liberal Party or a divided Coalition. She may have bought herself time in the leadership, but in having allowed the partyroom to dictate policy to the shadow ministry, she has delivered a significant political victory to her key internal rival.
Climate change has been a surrogate for leadership within the Coalition since it first snatched Brendan Nelson’s leadership in 2008. If the numbers are accurate, around 60 per cent of the partyroom voted against a policy that retained a commitment to net-zero emissions by 2050. This means several so-called moderates, such as James McGrath and Kerryenne Liddle, broke with Ley’s supporters. The NSW Alex Hawke group – part of Ley’s base – also all voted against it.
This exposes two realities. The most obvious challenges the myth that moderate views on policy have ascendancy in the parliamentary Liberal Party. This is not the case.
The second is that Ley’s internal support base can easily and quickly fall away.
It is an open secret that Angus Taylor has been speaking regularly to the group of MPs he would need to win the leadership; namely those who didn’t vote for him in the post-election ballot. He has been careful not to raise the issue of leadership or canvass support.
The net-zero debate provided legitimate cover for soundings over recent weeks. But Taylor doesn’t need to do hard counting. If the split on net zero can be reflected in leadership terms, Taylor would easily win.
“There is no spreadsheet on numbers,” says one senior Liberal source. “He (Taylor) doesn’t need one.”
What’s clear is that if MPs were told they could have only one vote on leadership between now and the election, Ley would likely lose. But there is no appetite for a rush to a challenge, with enough MPs telling Taylor directly that now is not the time.
The strategy now appears to be a three-step approach. Having secured a policy outcome on energy, the conservative group will seek to accelerate a position on immigration. This is the next dispute on the horizon and Ley cannot afford to take the same approach to it as she did with net zero.
Yet, after this week she has set a precedent for a reversal of the internal command structure, in which the partyroom now dictates policy to the shadow cabinet and leader rather than policy being taken to the partyroom for endorsement.
This is a significant change to the dynamic of the present Liberal Party leadership which has been now fundamentally and irrevocably altered. It is not a sustainable political model.
But having got what conservative MPs were demanding, the challenge will be whether the party is prepared for the battle ahead and the consequences of its decision. The institutional condemnation will be almost universal, and division within the party will remain. These voices will be dominant and loud. Opposition energy spokesman Dan Tehan tells Inquirer he was under no illusion about that prospect. The party incurred institutional condemnation over the voice referendum and survived.
There will be a view among conservatives that outrage from the elites could be leveraged in a similar way. Again, this rests on a belief that Labor’s renewable energy plan will ultimately fail.
“Our focus is reaching into the households of Australia to say we know energy affordability is the issue … and we want to do something about it,” Tehan says.
“It’s a long-term play where we will show clearly that we are focused on costs and a stronger economy while doing our fair share on emissions.
“That’s the best way to go about it rather than Labor’s approach, which is punitive.
“We want a fight on economy, they want a fight on the environment – and we know the economy wins every time.”
While the decision reflects a belief from a majority in the partyroom that while the polls show community support for the maintenance of net zero, this support is vulnerable to the cost equation. But no one should be surprised that this is where the Liberal Party has returned to.
There is a false assumption this issue had reached a final settlement following Scott Morrison’s decision to sign the Coalition government up to net zero in 2021 in the days before the Glasgow COP climate change summit. This is a misreading of events.
There was no appetite to go down this road until several other realities sunk in beyond the growing electoral consideration of the teal movement, which exploded onto the scene in the wake of the March 4 Justice movement.
Taylor, who was Morrison’s energy minister at the time, was deeply against it. Yet the Morrison government was coming under intense pressure from the then UK prime minister Boris Johnson to sign up to a target that he was determined to deliver globally at the summit he was hosting.
Such was the fervour at the time, there was a well-held fear that private capital into Australia would be stopped dead if the government maintained an isolationist position. This pressure had already become apparent during negotiations over the free trade agreement that Australia was trying to negotiate, with Tehan – then trade minister – being badgered by UK officials to include net zero in the FTA. On this Australia prevailed.
The pressure was intense. Johnson’s energy secretary, Alok Sharma, was on the phone to Taylor – then energy minister – every other day, prefacing his calls with words to the effect: “It’s a hot day here in London, Angus, I hope you aren’t going to make it worse.”
There were also national security issues at stake. Morrison was trying to secretly land a deal with Johnson and then US president Joe Biden on the AUKUS nuclear submarine program.
The relationship wasn’t so transactional that it presented an explicit risk to the accord. But, as orrison tells Inquirer: “If we had not been making good-faith moves all that year in the lead-up to COP26, then there was a real risk that those pushing the climate track from our allies in these relationships could have been successful in impacting the security and trade track that was very important to us.
“There is always give and take in these relationships. A non-legislative commitment to net zero by 2050, which did not require any change to our regulatory or tax settings or short-term emissions reductions targets, was a reasonable position to take, given the international political landscape at the time and the strategic importance of our other priorities.
“Relations with Pacific counties was also an important issue. It’s important to remember Australia at the time was a policy island on net zero and the global policy environment had been completely changed by the US under president Biden.
“Japan had moved several months before, leaving us completely isolated.”
Morrison might have committed the Liberal Party to net zero four years ago but it was far from a Damascene conversion of ideology on behalf of conservatives within the Liberal Party.
“You do what you have to do in the circumstances in which you find yourself to protect the national interest,” Morrison says.
Glasgow was the crucial accelerant, forced upon everyone. Indeed, Peter Dutton had no intention of dropping it considering the success of the teals and their contribution to the Coalition’s election loss.
Central to the 2021 net zero commitment, however, was an approach led by “technology not taxes”. This is now the only element of the former Coalition’s position that has survived.
Considering the conditions upon which net zero was adopted in the first place, there was perhaps an inevitability that in opposition, the Liberal Party would revisit it. More recently, both Johnson and Morrison have conceded that things have changed since 2021 and have backed away from it.
That Taylor is once again in the thick of it is also no surprise.
Having fought against the country’s earliest wind farm on his family’s property at Nimmitabel in the NSW Monaro plains almost 30 years ago, it has been an article of faith ever since.
Now as the member for Hume, Taylor’s family is once again fighting to stop the nation’s largest solar farm being built 2km from his new property east of Goulburn.
“I’ve never had a problem with the idea of seeking to reduce emissions as far and fast as possible and technology will allow,” Taylor tells Inquirer following Thursday’s meeting.
“The problem with net zero is that the brand is associated with anti-Liberal values. It is synonymous with heavy handed, big government mechanisms to reduce emissions, including taxes, intrusive regulations, government handouts and mandates.
“Technology will do the work, and the world is in the process of working that out.”
A confluence of factors since the election has crystallised opinion. Not only is there a belief in an international movement away from net zero, conservatives have been spooked by the bleeding of support to One Nation and the momentum building against net zero in the party membership, which has been playing out for those who have shaky preselections.
“This has been almost without precedent in terms of the pressure on some MPs,” said a senior Liberal source.
“Where some MPs have electorates who are pro-net zero, the branch membership was strongly against it, which has implications for ppreselectionsand then there are added complications where teals or independents may be running against them.”
The moderates have been given a fig leaf of cover in seats which will be most affected by the independent movement, with a commitment to stay in the 2015 Paris agreement.
While some see this as contradictory, it relies on an interpretation of article 4.1 to 4.3 in the accord that goes to sovereignty in establishing nationally determined contributions.
That interpretation is that 4.1 argues net zero is a global goal, with nations determining their own contributions to achieving that. There is no explicit obligation signatories would have net zero targets of their own. But very few believe that will suffice as an argument in teal seats.
What this means for Ley will play out over the coming months.
“This issue has always been a proxy for leadership, we can’t escape that fact. It always has been, always will be,” a senior Liberal source said.
“But if there is limited damage on the other side of this decision, given one or two might leave the frontbench, then so be it. But if we can go to Christmas and then hit the nenew yearith a strong agenda then …
“She will need to be given the clear air to do it, though, and whether they allow that, I couldn’t say.”
More Coverage
The Liberal Party has now embarked on the path of no return – gambling its revival on the proposition that, by the next election, it will be on the right side of the emissions and energy debate.