Greg Hunt’s Direct Action deal with Clive Palmer months in train

GREG Hunt thought he could get a deal with Clive Palmer to support his Direct Action policy back in April.

Winning Clive Palmer’s support for Direct Action was only one of several hurdles Greg Hunt had to negotiate. Picture: Gary Ramage

GREG Hunt thought he could get a deal with Clive Palmer to support his Direct Action policy back in April when he bumped into the Queenslander outside Aussies, the Parliament House coffee shop.

Mr Hunt remembers the day clearly: Prince William and Kate had been in Canberra and Mr Palmer had launched another attack on Hunt’s Direct Action climate change policy.

“He (Mr Palmer) said, ‘it’s nothing personal ... my staff tell me it’s the way to go, but I can’t help being friendly with you’.

“I knew we were making progress,’’ Mr Hunt said.

“We seem to get on well. Whenever he was critical of Direct Action, I was never fussed and said, ‘I think we’ll get (a deal)’.’’

In the six months since then, Mr Palmer has backed the government’s repeal of the carbon tax and supported Direct Action despite once declaring it a “token gesture’’ and a waste of money.

Winning Mr Palmer’s support for Direct Action was only one of several hurdles Mr Hunt had to negotiate.

The Queensland Nationals had threatened to revolt over concerns that the $2.55 billion Emissions Reduction Fund, the centrepiece of Direct Action, would create forests that would undermine farming activity in rural areas. In addition, South Australian independent Nick Xenophon had real concerns about elements of the policy.

“The strategy was to ensure we had something that was acceptable to the party and then the Prime Minister, acceptable to Nick Xenophon and (Victorian senator) John Madigan and acceptable to the Palmer United Party,’’ Mr Hunt said.

“It was like being in the middle of a triangle and pulling together those three parts.’’

The Nationals’ concerns were eased by the insertion of a clause requiring the minister take into account environmental, economic and social situations to prevent forestry “taking out rural activity’’.

Mr Hunt said his staff worked closely with Senator Xenophon on a series of amendments and Frontier Economics managing director Danny Price helped to design safeguards that would impose pollution baselines on major emitters in the next phase of the policy.

Mr Hunt said negotiations with Mr Palmer proceeded in two stages: first to get the carbon tax repealed and second to have him agree to Direct Action legislation.

He said his office had decided six months ago the gap between the abolition of the carbon tax and the introduction of Direct Action “will be our friend’’.

“We knew there would be immense pressure once the carbon tax had been repealed to protect the now-171 carbon farming projects,’’ he said. With the carbon tax abolished, the market for the abatement from what had been ­viable businesses was gone and they needed a new market.

It was decided to attach the ­Direct Action legislation to the legislation on the carbon farming initiative introduced by Labor. Mr Hunt said there was a strong constituency around Mr Palmer on carbon farming. But when Mr Palmer stood with climate warrior and former US vice-president Al Gore in June and backed an emissions trading scheme to take effect when key international competitors also adopted one, Mr Hunt knew his strategy would not be ­acceptable to Tony Abbott.

Instead, a review was suggested. The Australia Institute’s Richard Denniss became involved as an intermediary.

Last week Mr Hunt and government Senate leader Eric Abetz met Mr Palmer to discuss a draft agreement. A deal was clinched after a meeting on Tuesday. On Wednesday it was endorsed by Mr Abbott and announced that day.

Mr Hunt says his staff worked tirelessly with key staff in the Palmer and Xenophon offices. He says the secret is to be respectful and persistent and keep in mind the other person’s aim.

Mr Hunt’s colleagues say he is racking up an impressive series of wins. This year he has convinced Labor to support the government’s Green Army plan and he has done deals with state governments on one-stop-shop environmental approvals.

“He has played a blinder,’’ says Victorian colleague Josh Frydenberg.

However, the Renewable Energy Target is unfinished business. Industry Minister Ian Macfarlane and Mr Hunt are locked in negotiations with Labor on the future of the scheme.

“We’ll take it step by step,’’ Mr Hunt said. “Part of this is not getting ahead of yourself.’’