Liberals and Nationals on poll and policy crash path

Sussan Ley and David Littleproud are on a collision course over divestiture and energy policy, three-cornered election contests that would benefit teal independents and Senate ballot fights that threaten the future of senior National Bridget McKenzie.

Nationals leader David Littleproud, left, Bridget McKenzie and Kevin Hogan. Picture: Martin Ollman/NewsWire

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Sussan Ley and David Littleproud are on a collision course over divestiture and energy ­policy, three-cornered election contests that would benefit ­Climate 200-backed teal independents and Senate ballot fights in Victoria and NSW that threaten the political future of senior Nationals MP Bridget McKenzie.

As Mr Littleproud and Senator McKenzie defended the decision to split from the Liberals on ­Tuesday, Nationals MP and ­former cabinet minister Darren Chester broke ranks to push for the party to re-join the Coalition before parliament returns in July.

In a major intervention that confirmed dissenting views inside Mr Littleproud’s party room, Mr Chester said the Coalition ­divorce handed Anthony Albanese a “free pass” and warned that an extended break between the parties would make it harder to “reconcile” differences.

As recriminations inside the Coalition grow, Ms Ley on Thursday will finalise an exclusively Liberal shadow cabinet and opposition frontbench that excludes Nationals MPs, who will determine their own portfolio responsibilities in the minor party.

The Australian can reveal that some in the Nationals are preparing to stoke fights with their ­former Coalition partners over economic and climate change policy, amid an internal push to widen divestiture powers outside of supermarkets.

It is understood that out of the Nationals’ four non-negotiable policy demands, the sticking point was divestiture powers that are opposed by a rump of Liberal MPs close to Ms Ley.

Senior Liberal sources said on Wednesday the party would have resolved concerns around divestiture powers to save the Coalition agreement, which was dumped by Mr Littleproud despite a handful of his Nationals MPs raising concerns about splitting the ­conservative parties for the first time since 1987.

If the Coalition cannot re-form before the 2028 election, The Australian has confirmed that Senator McKenzie, the ­Nationals Senate leader, and ­Nationals whip Ross Cadell would be blocked by the Liberals from running on joint tickets in their respective states.

Under pre-existing arrangements, Senator McKenzie and Senator Cadell would run from the safe second position on joint Victorian and NSW ballots. In the event the Nationals ran their own tickets, Senator McKenzie and Senator Cadell would likely be dumped from the Senate.

Queensland Nationals senator Matt Canavan would be ­insulated because he is on a ­Liberal National Party ticket.

Another flashpoint in the ­Coalition fallout is the threat of three-cornered contests across regional Australia.

“Three-cornered contests would be massively unpredictable in both Liberal and Nationals seats, especially those already ­targeted by the teals. If either of the parties challenged, it would slice around 5 per cent of the vote which could hand the seats to an independent,” a Liberal Party source said.

Liberal MPs said three-­cornered contests could help teal independents win Liberal and ­Nationals seats, including Wannon, Monash, Cowper and Lyne.

Following the retirement of former Nationals leader Tim Fischer in Farrer, Ms Ley won the regional NSW seat in a three-­cornered contest at the 2001 ­election. While some senior Nationals figures want to target ­regional provincial cities across the nation, others talked down the prospect of going after incumbent Liberal MPs. “We shouldn’t be engaging in self-harm of the conservative movement any more than we have already done,” a Nationals source said.

Another damaging complication could arise in the Senate, with industry leaders privately pushing the Coalition to help the Prime Minister pass Labor’s revamped Nature Positive environmental laws and avoid them being exposed to Greens amendments.

Mr Albanese could now ­potentially play the Liberals and Nationals off against each other on legislation.

Ramping up the fight against the Nationals, a prominent Liberal Party member said: “There is no way we are agreeing to a joint Senate ticket in NSW and Vic – we will go it alone.”

Another senior Liberal source said: “We want to reach an ­agreement in both the parliament and before the election … They are the ones who decided to leave. We are happy to talk with them about re-forming a Coalition. But if we can’t come back together, the ­Nationals Senate seats are in play.”

Senator Cadell said he understood that he would likely be ­without a job if the Nationals were forced to run a stand-alone Senate ticket. “There are personal prices to be paid for the decision,” he said.

“But as a group we decided this is not about parties but about representing the people in our electorates. There is an increasing gap between the haves and haves not. The wealthy, affluent areas are not being burdened by the same economic circumstances.

“If the principled position we took means that I cop a 9 per cent pay cut, others in the party room take a 25 per cent pay cut or I am unemployed after the next election, we can hold our heads up and say that the decision was made for the right reasons regardless of the personal consequences.

“We cannot become a faction of the Liberal Party.”

After Mr Littleproud refused to reveal any dissent about the decision in his party room, Nationals deputy leader Kevin Hogan revealed that support to scrap the Coalition agreement was not “unanimous … but it was quite ­conclusive”.

Mr Chester on Wednesday told the ABC he believed a ­Coalition was “the best possible outcome for us in terms of striving to win government … and from the Nationals’ perspective certainly when we deliver for regional Australia is when we are in government”.

Despite some Liberals welcoming the chance to lead policy ­without the Nationals, others raised concerns about Ms Ley not calling an earlier party room meeting to discuss the Nationals’ four policy demands.

The policies, which Ms Ley on Monday told Mr Littleproud she could not guarantee until the ­Liberals’ post-election review was complete, were: forced divestiture of supermarkets; maintaining support for nuclear power; the $20bn regional future fund; and enforced universal service obligations ­ensuring reliable mobile phone coverage in the regions.

Senior Liberal figures said Ms Ley should have sought wider input from her party room after last week promising to not make “captain’s calls”.

“Divestiture could have been worked out,” a Liberal source said. “It shouldn’t have been a deal-breaker.

Victorian Liberal senator James Paterson told radio station FIVEaa: “It’s my ambition that we can solve this issue and re-form the Coalition in this term of ­parliament and go to the next ­election as a joint Coalition again, because it’s not in the Liberal Party’s interest for us to be fighting the National Party.

“We already have to fight the Labor Party, the Greens, and the teals; we are not looking for any other political opponents.

“It’s not in the National Party’s interest to find any new political opponents.”