How leadership paranoia sent Turnbull ‘spies’ into overdrive

A sense of panic began to sweep through the PM’s ­office last week. Spies were dispatched to report back on suspicious activity.

Turnbull’s private secretary Sally Cray with the PM at the G20 meeting, July 2017.

A sense of panic began to sweep through Malcolm Turnbull’s ­office last Wednesday.

Spies were dispatched throughout Parliament House to report back on suspicious activity.

The Prime Minister’s private secretary and protector, Sally Cray, made the short walk to the office of ­Finance Minister and Senate leader Mathias Cormann.

When Cray pushed open the door to the internal dining room, she found Cormann sitting around a table with conservative MPs Michael ­Sukkar of Victoria, ACT senator Zed Seselja and Tasmanian senator Jonathon ­Duniam.

With them was the Home Affairs Minister, leading Queensland conservative Peter Dutton.

Even though it was a regular dinner catch-up between the five, that night there was cause to be celebrating.

Cormann and Seselja had been pivotal in securing the upper house numbers that day to defeat a bill brought by Liberal Democrat senator David Leyonhjelm that would have effectively bound the commonwealth to the legalisation of euthanasia.

It was a significant victory for conservative forces.

It wasn’t the only thing on the menu. The only thing anybody was talking about around the ­Parliament House corridors was Turnbull’s leadership.

Cray is reported to have ducked her head in around the door with a look of surprise before apologising for interrupting.

“Sorry, I’ll go,” Cray is believed to have said.

Cormann then insisted she stay and have a drink. Cray parked herself at the table and remained seated until they all decided to call it a night. It was after 11pm.

There are disputed versions of events. Sources close to Cray insist that she was invited to the conservative knees-up; one of those present at the dinner says “absolutely not”. Some were stunned that she would stay until stumps.

As Turnbull’s leader in the Senate, Cormann has regular dealings with

Cray and they enjoy a good working relationship. In the end,

even though Cormann is close to Dutton, he voted for Turnbull in the

leadership contest.

If there had been a plot under way, Cray’s intervention almost certainly cruelled it — if only ­temporarily.

Conservative rumblings were evident from the day Turnbull became leader in September 2015, but the trigger point for open hostility arguably came in June last year with an indiscreet remark at the Liberal Party’s Black Hand function by key moderate and cabinet minister Christopher Pyne. Claiming bragging rights for the moderates being in charge, he told his factional allies that they were now in the “winner’s ­circle” and promised to deliver the same-sex marriage bill on their ­behalf.

It was that same month that Education Minister Simon Birmingham, another leading moderate, secured his Gonski 2.0 schools funding package, which ignited a 15-month war with the Catholic schools sector. This would come back to haunt Turnbull during last month’s Longman by-election.

Then came the citizenship ­fiasco, the bank scandals, the ­announcement of the NEG and the Barnaby Joyce-inspired ministerial “bonk ban”, among other disasters.

As far as Dutton and his allies were concerned, Turnbull had ­effectively been on notice for a year.

While the strong economic fundamentals should have been buttressing the Coalition, Turnbull was failing the test of political management.

The promise to lower electricity bills had returned to an ­argument over climate change and coal; the Catholics were threatening to campaign against the government; and Bill Shorten was eviscerating the government over its company tax cuts plan.

Combined, they were killing the government.

Then there was Tony Abbott. The assessment of the former prime minister from most of his colleagues now is that his strategy had long ceased to be one of leadership restoration; it had become an unconcealed mission to destroy Turnbull’s leadership.

Underwriting Turnbull’s security, however, was a gradual tick-up in the polls and the maintenance of a comfortable lead over Shorten as preferred prime minister.

Yet there was still a collective view that the Coalition was heading toward a disastrous defeat at the next general election.

The defeat in the Longman by-election four weeks ago sent shockwaves through the LNP.

The fact that Dutton’s outer-Brisbane seat of Dickson shared a boundary with Longman sharpened the concern.

Yet it was a Newspoll published in The Australian last Monday that prompted a decision that the leadership issue might need to be brought to a head.

Turnbull’s personal numbers had crashed.

“The one thing that he would argue is that he was so much more popular than Shorten that the ­Coalition could not possibly lose,” one senior MP said. “This fig leaf was suddenly torn away.”

The timing could not have been worse for the Prime Minister. Events snowballed.

With the ill-fated NEG taken to the partyroom the next morning with questions of leadership resurfacing, 10 MPs threatened to cross the floor and vote against it.

The crisis had begun. On Thursday morning when Dutton turned up for his regular radio interview with Sydney 2GB’s Ray Hadley, the starter’s gun was fired.

Asked whether he would resign from cabinet, Mr Dutton chose his words carefully.

“If my position changes, that is, it gets to a point where I can’t accept what the government is proposing, or I don’t agree, then the Westminster system is very clear: you resign your commission, you don’t serve in that cabinet and you make that very clear in a respectful way,” he said.

One minister, when told of the interview, remarked: “Holy crap, it’s on.”

Dutton had kept his soundings tight and nothing had leaked.

On Thursday night, Turnbull and Scott Morrison desperately attempted to rewrite the NEG as it became obvious the Prime Minister’s leadership could be on the line. The following day the Paris emissions target was dropped.

It quickly became clear that nothing was turning the rebel MPs and their numbers began to grow.

At the same time, Birmingham made desperate calls to Catholic schools officials to try to secure a deal to take to the party room yesterday. It was all designed to bring a resolution to all the problems that the Prime Minister was ­accused of failing to fix.

Dutton returned to Brisbane on Thursday night, spent Friday in his electorate and took his kids to sport on Saturday. Turnbull remained in Canberra and flew back to Sydney on Friday.

At the weekend, Dutton took calls from a growing number of MPs pledging support, leading him to believe he was close to getting the 43 votes needed for a ­majority of the Liberals partyroom, but his camp believed they were still short.

At that point, most MPs were convinced a challenge was inevitable.

It became a question of timing.

“Those who don’t like Turnbull want him gone and gone quickly; those who like Turnbull fear he will be gone and gone quickly,” one conservative MP told The Australian on Sunday.

That night, Turnbull held a dinner for cabinet ministers in his dining room at Parliament House.

It had been scheduled to be held at The Lodge but was shifted, with fears it would turn into a media ­circus.

Dutton was stuck at Brisbane airport trying to get to Canberra. All flights were delayed. Knowing the consequences if he didn’t make the dinner, Dutton and his cabinet colleague Steve Ciobo were forced to use the RAAF’s business jet to get there.

Several cabinet ministers, having drinks ahead of the dinner, were furious that neither a memo nor a policy paper was circulated at the dinner and subsequent meeting. They were being asked to ­approve a new energy plan without having time to digest it.

Protocol appeared to give way to desperation. The announcement of electricity price caps the following day, in a press conference held by Turnbull, his Treasurer and Energy Minister Josh Frydenberg did nothing to quiet the rebels.

Even so, Turnbull’s camp was confident, believing Dutton had only 25 MPs behind him at best.

Sources close to Turnbull say he went back to The Lodge on Monday and had an early night.

Dutton had also retired early and continued to take calls. As late as 10pm, he received offers of ­support.

The Prime Minister’s Office had already briefed journalists that they expected a spill the next day brought on by Dutton.

But neither Dutton nor Turnbull had plans to do so.

“It was all very tightly held,” said a source close to Dutton.

“The planning had not involved Abbott. Which made the whole thing more dangerous … it wasn’t the usual suspects …

“The thinking was that we would wait until the sitting weeks in September.”

The intervention of Queensland Liberal National Party president Gary Spence, calling on MPs to roll Turnbull and replace him with Dutton, was said to have done more harm than good.

“The parliamentary party arcs up when the organisational wing sticks its beak into their business,” a senior MP said.

Turnbull’s decision to call Dutton’s bluff surprised MPs when he walked into the partyroom at 9am and declared the Liberal leadership ­vacant.

It was a bold move designed to catch MPs off guard.

And it worked, to a point.

At least half a dozen MPs later confirmed they were caught by surprise and if they had been given notice, would have voted for ­Dutton.

Yet it almost backfired. Turnbull won the ballot 48-35 with 57 per cent of his partyroom behind him.

By comparison, in the first Paul Keating challenge in 1991, Bob Hawke emerged with 60 per cent.

It may be a pyrrhic victory, at best.

A string of junior ministers, beginning with Sukkar at 4pm yesterday, went to see Mr Turnbull to offer their resignations, admitting they had voted for Mr Dutton.

He was joined at 6pm by former Turnbull backer and assistant to the Prime Minister James ­McGrath. More followed.

As Turnbull’s outer ministry was collapsing, Dutton was out softening his image, telling Sky News in an interview that he liked beer and had a self-deprecating sense of humour.

The campaign to humanise the minister had begun, and a second wave of momentum was gathering pace with more ministerial resignations last night, including cabinet members Michael Keenan and Steve Ciobo.

Those close to Dutton are now claiming that a second challenge is assured. It could be days or weeks away.

“This is not the end of it,” said a senior Liberal strategist who believed Turnbull’s people would now dig in.

“This is the beginning of the ­beginning.”