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PoliticsNow: Labor hammers Malcolm Turnbull in Question Time after Peter Dutton challenge

PoliticsNow: Senator James Paterson, who voted for Dutton, brushes questions about whether the PM has his full support.

Greg Brown, Rachel Baxendale and Rosie Lewis
29 min read
5:30PMAugust 21, 2018.
Updated 10:35PMAugust 21, 2018
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Leadership Spill: Turnbull survives challenge from Dutton

Hello and welcome to PoliticsNow, The Australian’s live blog on the happenings at Parliament House in Canberra.

Malcolm Turnbull has won a leadership ballot against Peter Dutton in the Liberal partyroom by 48 votes to 35 and Peter Dutton has resigned to the back bench.

• Top story: PM survives no-confidence motion after leadership challenge

8.28pm: Gichuhi says it all

Rachel Baxendale 8.05pm: Paterson brushes Turnbull questions

Victorian senator James Paterson, who voted for Dutton, brushed away questions about whether Malcolm Turnbull has his full support on his way into the Dame Enid Lyons event.

He said he was attending to commemorate an important moment in Liberal history.

Rosie Lewis 7.08pm: Hanson talking company tax cuts

As if this day couldn’t get any crazier, One Nation leader Pauline Hanson is up in the Senate talking company tax cuts and has unleashed on the government.

She says she had not seen an amendment to carve out the big four banks until 12.09pm today despite the government saying it was put to her one-and-a-half-weeks ago.

“Today has been a complete shambles. An embarrassment to every Australian,” she tells the chamber.

“You’ve got the Liberals knifing each other, and (Labor senator) Doug Cameron was caught dancing down the corridors with his air-tambourine, singing ‘Oh happy days’. The people are over it.”

For the record, Senator Hanson does not support the remaining company tax cuts for businesses with an annual turnover of more than $50 million, nor the big banks amendment.

Paul Kelly 5.25pm: A good day for Peter Dutton

Greg Brown 5.15pm: Dutton charm offensive begins

After a failed tilt at the PM’s job, Peter Dutton describes himself as a man with a “self-deprecating sense of humour” who “likes a drink”. Read more here

Simon Benson 5pm: Pro-Dutton minister offers to quit

The Assistant Treasurer has offered his resignation to Malcolm Turnbull after admitting that he voted for Peter Dutton in this morning’s leadership ballot. Read more here

4.35pm: What they said

Before the spill

• “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.” - Leadership challenger Peter Dutton last Thursday.

• “In relation to media stories today, just to make very clear, the prime minister has my support. I support the policies of the government. My position hasn’t changed from my comments last Thursday.” - Dutton on Saturday.

• “(Dutton) is a member of our team. He has given me his absolute support.” - Prime Minister Malcolm Turnbull on Monday.

• “I think the public would react very negatively to another change of leadership without them having a vote.” - Cabinet minister Christopher Pyne on Tuesday morning.

• “But all I know is that from Peter Dutton and every cabinet minister I’ve spoken (to), all of them support Malcolm Turnbull remaining as leader. They all support stability.” - Pyne.

• “If we are fighting amongst ourselves, guess what, when the voters go to the election, they’ll mark us down, as they should.” - Liberal frontbencher Craig Laundy on Tuesday.

Christopher Pyne at Parliament House today. Picture: Kym Smith
Christopher Pyne at Parliament House today. Picture: Kym Smith

The aftermath

• “Australians expect us to be focused on them ... what they don’t like is being focused on ourselves or talking about each other.” - Turnbull.

• “It is not over until the member for Dickson (Mr Dutton) has the scalp of the prime minister hanging from his belt.” - Labor leader Bill Shorten.

• “The Australian people expect the circus to end now.” - Veterans Affairs Minister and Nationals MP Darren Chester.

• “Unity has to be created and loyalty has to be earned. They can’t just be demanded.” - former prime minister Tony Abbott.

• “I disagree with my good friend Peter Dutton.” Finance Minister Mathias Cormann on why he voted for Turnbull.

• “The strong sense this morning is we have made the decision. We need to put it behind us. Australians don’t like navel gazing. We need to be focusing on everyone outside this building.” - Liberal MP Trent Zimmerman.

• “I hope not ... it is now time for stability.” - Liberal MP Craig Kelly on prospects of another spill.

• “I think there is a hankering in the community at large, and perhaps in the party, for the prime minister ... to act in a clear-cut manner and allow this issue, the boil, if you like, to be lanced.” - Liberal Party president Nick Greiner.

• “It has the face of the member for Wentworth (Mr Turnbull), the policies of the member for Warringah (Tony Abbott), and it has the cold, shrivelled soul of the member for Dickson (Mr Dutton).” - Labor deputy leader Tanya Plibersek describes a “Frankenstein’s monster” of a government.

• “The mandate our government has came from the 2016 election. Remember that? We won and you lost.” - Turnbull to Shorten.

— AAP

3.55pm: How the partyroom voted

Sky News Australia has crunched the numbers on today’s leadership spill:

3.45pm: Dutton hashtag emerges

Greg Brown 3.28pm: PM survives vote

Bill Shorten’s motion of no confidence in Malcolm Turnbull has been voted down in the House of Representatives by 76 votes to 67.

Crossbench MPs Rebekha Sharkie and Cathy McGowan voted with the government against the motion, while Adam Bandt and Andrew Wilkie voted with Labor in support of it.

With that, QT ends.

Greg Brown 3.22pm: House votes on no-confidence motion

Speaking is finished on the no-confidence motion and a division is called for a vote.

Greg Brown 3.20pm: Pyne talks up Turnbull

Cabinet minister Christopher Pyne becomes the first government speaker to defend Malcolm Turnbull rather than just talk up the Coalition’s policies.

“This government has confidence in the Prime Minister,” he says.

Mr Pyne then goes on to savage Bill Shorten.

“The Leader of the Opposition has left a trail of destruction of behind him throughout his political career. This is a man, his colleagues do not trust,” he says.

“If you decide to have an election around character, we will put our Prime Minister against your Leader of the Opposition every single day.”

Greg Brown 3.15pm: ‘Two words missing’

Anthony Albanese starts his speech by noting none of the government MPs who spoke against a no-confidence motion actually defended Malcolm Turnbull as Prime Minister.

“Not one of the speakers has defended Malcolm Turnbull’s prime ministership,” Mr Albanese says.

Greg Brown: 3.10pm: Morrison joins the fray

Now Scott Morrison defends Malcolm Turnbull -- but it turns into more of an attack on Bill Shorten.

“It was the Leader of the Opposition who said ‘just leave the keys to the lodge there in the door’. That is what he said.

“And as they would have heard those words from the Leader of the Opposition, I think a chill would have gone through Australians.

“Australians do not trust a potential Bill Shorten government to run a stronger economy or to keep Australian safe.”

Dennis Shanahan 3.10pm: Jokes, smiles and a political CV

Peter Dutton has launched his bid for the next challenge against Malcolm Turnbull’s leadership. Read more here

Greg Brown 3.05pm: ‘Let the people decide’

Opposition treasury spokesman Chris Bowen speaks in favour of the no-confidence motion against Malcolm Turnbull, accusing him of giving up on his values.

“But there is a better reason to carry this motion: the carrying of a motion of no-confidence will oblige this Prime Minister to hop in the car, go to the Governor General, and advise on election,” Mr Bowen says.

“And let the Australian people cast at judgment on this man and the government.”

Former prime minister Tony Abbott in the House of Representatives. Picture: AAP
Former prime minister Tony Abbott in the House of Representatives. Picture: AAP

Greg Brown 3pm: Bishop backs Turnbull

Foreign Minister Julie Bishop defends Malcolm Turnbull against the no-confidence motion, selling the achievements of the government but failing to talk up the attributes of the Prime Minister.

“We are fighting for the people of Australia because we have an economic plan to grow our economy and ensure there are more jobs and more job opportunities,” Ms Bishop says.

She fires up Labor MPs by saying the Coalition stands for workers.

Greg Brown 2.55pm: ‘We’ve seen this movie before’

The Manager of Opposition Business Tony Burke speaks in favour of the no-confidence motion against Malcolm Turnbull, saying his leadership was “doomed”.

“This man now believes that his party will continue to stand beside him,” Mr Burke says.

“It’s not going to happen and no one believes it’s going to happen. We’ve all seen this movie before.”

Greg Brown 2.50pm: Deputy stands up for his leader

Deputy Prime Minister Michael McCormack stands to speak to in support of Malcolm Turnbull and to reject the no-confidence motion against the Prime Minister.

The Nationals leader, not known for his searing rhetoric, turns the speech into a polemic against Bill Shorten’s policies.

“We know he stands for higher taxes. We know his party stands for higher energy prices,” Mr McCormack says.

Peter Dutton during Question Time. Picture: AAP
Peter Dutton during Question Time. Picture: AAP

David Rogers 2.45pm: Market sinks amid uncertainty

Australia’s S&P/ASX 200 share index has fallen 1pc to a 4-day low of 6282.6, heading for its worst fall in 5-months.

It comes amid broad-based falls as political uncertainty knocks the index from a decade high after a failed spill attempt on Malcolm Turnbull.

Political uncertainty may be having a disproportionately large impact on the sharemarket due to its valuation and idiosyncratic effects on banks and utilities.

Three of the four major banks are down fall 1.6-1.9pc, while energy utilities like AGL and Origin are down more than 2 per cent.

BHP falls 1.7pc on cost pressures in its results. Woolworths and Wesfarmers down 2pc on Woolworths downgrades.

2.40pm: Why Dutton challenged Turnbull

• Peter Dutton says he believed he was the best person to lead the Liberal Party to success at the next election.

• He thinks a Liberal win at the ballot box depends on it getting its policies and messaging right on bringing down electricity prices.

• The former home affairs minister also wants the party to “do more” on infrastructure and the pressures being put on cities from immigration.

• Spending more on water to help farmers struggling with the drought is also on Mr Dutton’s agenda.

• Health, education and aged care are other areas he thinks deserve “record investment”.

— AAP

Greg Brown 2.43pm: Plibersek hits out

Deputy Labor leader Tanya Plibersek speaks in support of the no-confidence motion against Malcolm Turnbull.

She urges Coalition MPs who backed Peter Dutton to support the motion. “We also know that half the people on the other side have no confidence in this Prime Minister,” Ms Plibersek says.

“And if they weren’t such lions in the partyroom and lambs, or sheep, in here, they would join us in voting on this motion that this parliament has no confidence in this Prime Minister.”

Scott Morrison and Malcolm Turnbull arrive for Question Time. Picture: Kym Smith
Scott Morrison and Malcolm Turnbull arrive for Question Time. Picture: Kym Smith

Greg Brown 2.35pm: PM attacks Shorten’s union past

Malcolm Turnbull gets up in response of Bill Shorten’s no-confidence motion, attacking the Opposition Leader’s history as a union leader.

“He was prepared to exchange penalty rates for cleaners in return for a deal, secret deal with the employer, with money going back to the union,” the Prime Minister says.

He then goes onto talk up the achievements of the government.

“What we are doing is delivering stronger economic growth, more jobs, lower unemployment,” Mr Turnbull says.

“And what that will deliver, as the Reserve Bank were saying today, is higher wages, and we are starting to see that movement. It all comes from a stronger economy.”

Chris Kenny 2.30pm: ‘All a bit tedious’

Leadership challenges have become like a fire drill. It’s as dysfunctional as it is predictable. And it will happen again in a few weeks. Read more here

2.25pm: Peter Dutton has issued a statement

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Greg Brown 2.15pm: Labor moves no-confidence motion

Bill Shorten is attempting to move a no-confidence motion against Malcolm Turnbull in the House of Representatives.

Leave was initially not granted by the government, but Leader of the House Christopher Pyne changes his mind

“On reflection, the government will take the debate with relish,” Mr Pyne says.

Mr Shorten says the parliament should not put up with a Prime Minister who does not have the support of nearly half his party and even cabinet members.

“This house should vote for no confidence because the Prime Minister has no authority, no power, and no policies,” Mr Shorten says.

“And the reason for that sits behind him. If nearly half of his own government do not want him to be the Prime Minister, why should the rest of Australia have to put up with them?”

Earlier, Mr Shorten asked Mr Turnbull to confirm he yesterday admitted one Coalition MP could veto legislation entering the House and that half the Liberal partyroom voted against him.

“Does he recognise now that a clear majority of the members of parliament behind him and in front of him no longer want him to be Prime Minister of Australia?”

Mr Turnbull hit back by raising Mr Shorten’s “people’s choice” former leadership challenger Anthony Albanese.

Greg Brown 2.05pm: ‘A vote of no confidence’

Bill Shorten starts Question Time on Malcolm Turnbull’s leadership woes.

He asks how the Prime Minister can claim any mandate to run the country when nearly half of his party has given him “a vote of no confidence”.

Mr Turnbull hits back: “The mandate of our government has come from the 2016 election, remember that? We won and you lost”.

Greg Brown 2.02pm: ‘Who is the Prime Minister?’

Malcolm Turnbull walks into the House before QT with Labor’s Jenny Macklin yelling: “Who is the Prime Minister?”

She asks whether the government is being led by Tony Abbott, Mr Turnbull or Peter Dutton.

“What a shambles,” she yells.

Speaker Tony Smith interrupts: “I want to remind you, your microphone is on”.

Mr Morrison walks in with Mr Turnbull as a sign of solidarity.

The Prime Minister takes the stand to tell the House that Mr Dutton has resigned from cabinet.

Mr Dutton sits next to Liberal MP Julian Leeser, a long way from his old spot on the frontbench.

Sarah-Jane Tasker 1.30pm: ‘Everyone wants stability’

Private hospital operator Healthscope chief Gordon Ballantyne has said what most in corporate Australia are thinking today: “given the option between instability and stability, everyone will choose stability”.

Ballantyne was commenting on the negative market reaction today to the leadership spill, that saw Malcolm Turnbull win a challenge by Peter Dutton, 48 to 35.

“No one would question we need stability for the country and good reform to deliver the right policies that support business, particularly in healthcare where we see such a huge demand in the longer term with a growing and ageing population.” Ballantyne told The Australian.

“Part of this is to ensure we have a thriving private and public sector, working in harmony to continue to deliver and support high quality healthcare to all Australians.”

The Healthscope chief said he would work with any government on their reform agenda to ensure that outcome is delivered.

“We are very active in providing input into current policies and reforms proposed. Hopefully these will result in greater transparency to consumers and re-energise the perception of value in private health insurance, plus ensure we are better providing access to a range of services.”

Greg Brown 1.20pm: Dutton silent on recontesting leadership

Peter Dutton says he took Malcolm Turnbull on for the Liberal leadership because he thought it would give the government a better chance of beating Bill Shorten at the next election.

Mr Dutton, who resigned from cabinet to the backbench today after losing a challenge to the Prime Minister, did not rule out a future tilt at the Liberal leadership but maintained he would do all he could to help the government beat Labor at the next election.

He also doesn’t rule out returning Tony Abbott to the frontbench if he is elevated to the top job.

“The problem is that Bill Shorten would be a disastrous Prime Minister of this country and I believe I had the best prospect of leading the Liberal Party to success at the next election,” Mr Dutton said.

“That was not to be today and I understand and I respect the outcome and I fully support the Prime Minister and the cabinet.

“My position from here will be to do what I can as a backbencher to make sure that I support the government, to make sure we are elected and can keep Bill Shorten from the Lodge.”

Mr Dutton gave a list of policies the government needed to get right if it was to win the next election, including lowering electricity prices and immigration levels.

“I believe strongly that we can win the election if we get the policies and the message right about lowering electricity prices, about making sure that we can do more on infrastructure and in particular around the migration program, until the infrastructure can catch up in our capital cities,” he said.

“We need to invest more in water to get farmers out of drought so they do not go through what they go through at the moment.

“We need to invest records amounts into health and education, aged care and other areas as well.”

Rosie Lewis 1.05pm: Hinch ‘thrilled’over big four

Victorian crossbench senator Derryn Hinch says he’s “thrilled” the government has “finally realised” the big four banks deserve to be carved out of the company tax cuts legislation. He’s urging the government to introduce a cap of $500m. which it won’t do. Senator Hinch points out there’s already a two-tiered system because as it stands only companies with an annual turnover up to $50m get the lower tax rates.

Senator Cormann reveals carving out the major banks would increase revenue by $7.9 billion over the medium term to 2027-28.

Over the forward estimates there is no impact because banks of this size do not receive a lower tax rate in that period.

Greg Brown 12.50pm: ‘Unity is critical’

Malcolm Turnbull has shot down suggestions his leadership is terminal as he urged government MPs to be united in their efforts to defeat Bill Shorten at the next election.

The Prime Minister revealed Scott Morrison would temporarily replace Peter Dutton as Home Affairs Minister, after Mr Dutton rejected Mr Turnbull’s plea to stay in the portfolio.

“We need to be united,” Mr Turnbull said.

“We know that disunity undermines the ability of any government to get anything done. Unity is critical. We cannot allow, as I said in the partyroom today, our internal issues to undermine our work, to create a risk, a real risk, that Bill Shorten will be the prime minister.”

Mr Turnbull said Mr Dutton knocked back his invitation to stay in cabinet.

“He said to me that he doesn’t feel he can remain in the cabinet having challenged me to the leadership of the party, and so he is resigning,” he said.

Mr Turnbull said there was no need for other cabinet ministers to resign as it was a “secret ballot”.

Deputy Liberal leader Julie Bishop, who was reelected uncontested, claimed the 48-35 victory in the ballot was “resounding”.

“The result today was an overwhelming vote of support for the Prime Minister,” he said.

“I have seen leadership contests before, this was an overwhelming vote of support for the Prime Minister.”

Rosie Lewis 12.45pm: For and against tax cuts

Crossbenchers Fraser Anning, Cory Bernardi, Brian Burston, Stirling Griff, Rex Patrick, David Leyonhjelm and Derryn Hinch voted for the second reading vote.

One Nation leader Pauline Hanson abstained, her colleague Peter Georgiou voted against, as did independent Tim Storer, Labor and the Greens.

12.37pm: Morrison to replace Dutton

Malcolm Turnbull says he didn’t bear a grudge against Peter Dutton for challenging him and he invited him to continue in cabinet but Mr Dutton said he didn’t feel he could remain. Scott Morrison will take the role of acting Home Affairs minister.

Malcolm Turnbull and Julie Bishop holding their press conference at Parliament House. Picture: Kym Smith.
Malcolm Turnbull and Julie Bishop holding their press conference at Parliament House. Picture: Kym Smith.

Rosie Lewis 12.35pm: Second reading of tax cuts passes Senate

A second reading vote on the company tax cuts has passed the Senate 35 to 34, giving the government the opportunity to move an amendment to carve out the big four banks. Senator Cormann says he’s moving the amendment “in the interest of a compromise”.

Senator Cormann warns if senators vote against the amendment to exclude the big four banks from the company tax cuts package they will be exposed for their “absolute hypocrisy”.

12.30pm: PM, Dutton met after ballot

Ashleigh Gillon of Sky News is tweeting that Malcolm Turnbull and Peter Dutton had a meeting in the PM’s office after the partyroom ballot.

Rosie Lewis 12.25pm: Tax offer ‘very clear’

Senator Cormann dismisses Senator Georgiou’s claim he never saw an amendment to carve out the big four banks.

“Let me tell you the offer was very, very clear,” Senator Cormann says.

He says he made the proposal to other crossbenchers too but at no point was the government prepared to put in a $500 million cap, so that only businesses turning over up to $500m were eligible for the lower tax rate.

Senator Cormann goes hard on One Nation, declaring they were prepared to back company tax cuts when the banks were included.

“I mean really, really,” he says. “If the Senate votes against a lower, globally more competitive tax rate we will be letting down working families around Australia today and into the future.”

Greg Brown 12.14pm: ‘Consider your future’

Veterans Affairs Minister Darren Chester has warned a Peter Dutton may not be able to control the House of Representatives if he becomes prime minister as he urges colleagues to “consider your future” if they cannot get behind Malcolm Turnbull.

“Prime Minister Malcolm Turnbull just won a ballot in the Liberal partyroom to continue as Prime Minister and that is the end of the matter,” the Nationals MP said today.

“For those who think there is some second-strike theory working here consider this: we have a one seat majority in the House of Representatives, there is no reason to assume anyone else could command that majority in the House of Representatives.”

When asked if MPs such as Tony Abbott should leave parliament, Mr Chester said people who do not get behind the leadership team should consider their future.

“Individuals need to assess their own position at a time like this,” he said.

“If you are prepared to be part of the team, if you are prepared to back the Prime Minister of the day and help him deliver his agenda, then stay part of the team, if you don’t want to be part of the team then consider your future.”

Rosie Lewis 12.10pm: Tax cuts ‘important for all’

Finance Minister Mathias Cormann is making his final pitch to the Senate crossbench ahead of a vote on the Turnbull government’s remaining company tax cuts. He says if they are voted down today the moment will come when federal parliament will have to revisit the proposal. He says a lower tax rate of 25 per cent for all businesses is not only important for Australians today but for future generations.

Before Senator Cormann spoke One Nation senator Peter Georgiou confirmed The Australian’s story - there has been no deal with the government and his party will not support the remaining tax cuts.

11.55am: Coalition moving to ‘lose-lose’ situation

Watch Paul Kelly on the leadership ballot.

Coalition moving towards a ‘lose-lose’ situation

Greg Brown 11.50am: Sportsbet goes for October poll

Sportsbet is expecting an October election, after today’s leadership spill.

The online betting agency is paying $2.50 for the likelihood of an October poll, down from $10 before the spill.

The betting agency is paying $1.55 on the prospect of another leadership spill, compared to $2.25 of one not occurring.

But Malcolm Turnbull is expected to lead the government to the next election, at odds of $1.55 compared to $2.55 for Peter Dutton.

“The betting suggests we’ll be voting on our next government a lot sooner than expected with October the most likely date but another challenge looks on the cards before then,” said Sportsbet’s Will Byrne.

Peter Van Onselen 11.45am: Early election? Why not?

Quite obviously Peter Dutton will have a second crack at the leadership. The only question is will he get the chance. Malcolm Turnbull may decide to visit the Governor-general and call an early election. Why not?

While some would say that would be a selfish action, it may be the path of least resistance for the Coalition. Winning by 48-35 votes is far from convincing, but for now at least Turnbull can claim majority support.

Read the article in full here.

Scott Morrison and Josh Frydenberg leave after the partyroom meeting. Picture: AAP.
Scott Morrison and Josh Frydenberg leave after the partyroom meeting. Picture: AAP.

Rachel Baxendale 11.35am: ‘Loyalty has to be earned’

Tony Abbott has issued a statement following the partyroom meeting, declaring that “unity has to be created and loyalty has to be earned.”

“In today’s partyroom a number of colleagues denounced leaking, as they should. But even while the partyroom was continuing, reporters were being briefed that Warren Entsch ‘is getting stuck into Tony Abbott right now in the partyroom, met with some claps’,” Mr Abbott said.

“Unlike too many of my colleagues, my practice is to take responsibility for what I think and say.

“To put the Entsch intervention into context, I had just said to the partyroom that exhortations from the leadership group about loyalty and unity were all very well but ‘unity has to be created and loyalty has to be earned. They can’t just be demanded’.”

11.30am: PM ‘weighs early election’

Sky News is reporting that Malcolm Turnbull is now considering calling an early election rather than risk another challenge. However the PM’s office told Sky there would be no early election and Mr Turnbull has not considered it.

Rosie Lewis 11.28am: Bid for Hanson support

Cabinet will consider fast-tracking existing company tax cuts for small and medium businesses after the government offered to carve out the big four banks in a failed last-ditch bid to win Pauline ­Hanson’s support for cuts for business turning over more than $50 million.

Read the article in full here.

Pauline Hanson. Picture: AAP.
Pauline Hanson. Picture: AAP.

Rosie Lewis 11.25am: PM should ‘stare down’ Abbott

Mr Entsch told The Australian yesterday the Prime Minister needed to “stare down” Mr Abbott, who he wanted to remind had pledged “no wrecking, no undermining and no sniping” after he lost the top job in September 2015.

“These are good reasons why the former prime minister needs to pull his head in,” Mr Entsch said.

“I also need to remind him even with an 11 per cent margin he may not be safe.”

Greg Brown 11.18am: Entsch slams Abbott

Liberal MP Warren Entsch attacked Tony Abbott in the joint Coalition partyroom, accusing him of going against his vow not to snipe at the Turnbull government, The Australian has been told.

It came after Malcolm Turnbull gave the Coalition partyroom a rallying cry for unity, arguing it was essential for winning the election.

Mr Abbott complained about the Longman campaign and said the government needed to do more to create policy differentiation with Labor.

11.15am: Wave for the cameras

David Rogers 11.08am: Market reaction

Australia’s S&P/ASX 200 has fallen 0.9pc to 6291.3 in early trading, tentatively breaking support at 6300, amid broad-based falls. With the index now heading for its worst 1-day fall in 4-weeks, there’s no doubt that political uncertainty is having some impact. That follows the attempted spill of the Prime Minister Malcolm Turnbull in the party room vote this morning.

Perhaps the market is more vulnerable to profit taking after hitting fresh decade highs in recent days. Live: For full markets coverage, plus analysis and opinion follow our Trading Day blog here

Primrose Riordan 11.05am: Meanwhile, Labor reshuffles team

Labor’s small reshuffle has been confirmed today with Linda Burney, Ed Husic, Terri Butler, Jenny McAllister and Louise Pratt gaining portfolios. In July, veteran Labor frontbencher Jenny Macklin announced her retirement after 22 years in federal politics, sparking the changes. Ms Burney will permanently take on social services, while Mr Husic will take on human services. Ms Butler will gain employment services and youth affairs, while Senator McAllister and Senator Pratt will both become Assistant Shadow Ministers.

Joe Kelly 11.00am: Shorten on Turnbull

Bill Shorten has told Labor MPs at today’s caucus meeting that Malcolm Turnbull “looked into the abyss and the abyss looked straight back at him”.

The Opposition Leader said he did not understand how the Prime Minister could “pretend he’s running the country when every backbencher has as much power as he does”.

Mr Shorten also attacked the government’s now hobbled national energy guarantee, saying it was the “fourth best option” available. “Everytime we have moved towards agreement, the government has moved to the next option,” Mr Shorten said. “The electors of Australia are asking what on earth is going on”.

Mr Shorten warned the Australian people were doing it tough while the government conducted internal battles, telling Labor MPs “everything is going up except for wages”. He said that Labor was “ready to serve”.

Greg Brown 10.55am: History of the numbers

While Malcolm Turnbull kept his job today, history suggests he is vulnerable to another challenge. The Prime Minister defeated Peter Dutton, by 48 votes to 35, which is 58 per cent of the partyroom. This is tighter than when Julia Gillard and Bob Hawke won their first challenges, before later losing.

Ms Gillard defeated Mr Rudd by nearly 70 per cent of the vote in 2012, before losing to the challenger a year later. Mr Hawke defeated Paul Keating by 66-44 (60 per cent) in June 1991, with Mr Keating launching a successful challenge six months later.

10.50am: Dutton supporters ‘plan new challenge’

Sky News is reporting that Peter Dutton’s supporters are already discussing a second challenge for the Liberal leadership.

Greg Brown 10.45am: Leadership focus ‘concerning’

Independent lower house MP Cathy McGowan – who has guaranteed the Turnbull government supply – said yesterday the focus on leadership change was “concerning”.

“I have been contacted by constituents wanting to know what is happening in Canberra,” Ms McGowan said in a statement yesterday.

“I am reassuring them by saying the work is progressing and I am getting on with the job to complete our parliamentary program for Indi.

“I am encouraging my government colleagues to do the same.”

The Australian has asked her office this morning if she would reconsider her supply guarantee if Peter Dutton was prime minister.

10.43am: What next?

* Malcolm Turnbull must reshuffle his ministry, with a number of frontbenchers expected to go to the backbench.

* The prime minister must rebuild bridges with the 35 Liberal MPs who voted against him.

* With the corporate tax cuts laws likely to fail in the Senate and the National Energy Guarantee shelved, Turnbull needs a fresh economic agenda.

* Peter Dutton’s forces could consolidate and have another crack, as has occurred in past leadership spills.

* Parliament wraps up for the week on Thursday and does not return until September 10.

* The federal election is due by May 2019, but Mr Turnbull may be tempted to call it within weeks in a bid to sharply focus the minds of Liberal MPs, unify the party and ensure no further bloodletting.

* The PM heads to South-East Asia next week for trade and security talks.

* Labor has led 38 Newspolls in a row, but Mr Turnbull has maintained a strong lead as preferred prime minister.

AAP

Greg Brown 10.35am: Marginal MP shows hand

Marginal Victorian Liberal MP Chris Crewther has shown his hand from this morning’s leadership ballot, congratulating Malcolm Turnbull for defeating Peter Dutton.

“Congratulations to Malcolm Turnbull on retaining the Prime Ministership,” Mr Crewther tweeted.

Jared Owen 10.24am: ‘No clear direction on NEG’

Malcolm Turnbull’s government has no “clear direction” for national energy policy following today’s leadership contest, Queensland Energy Minister Anthony Lynham has said.

Signalling the battered Prime Minister may struggle to win the Labor state’s support on future energy reforms, Dr Lynham said the federal Coalition was “without focus” on the key issues of affordability, reliability and sustainability.

“The focus is on Mr Turnbull’s numbers, not the numbers on power bills,” Dr Lynham told state parliament in Brisbane.

“Nationally, we are without clear direction on energy and climate change, without integrated policy to take us forward.”

Michael McKenna 10.10am: Dutton speaks to battlers

Peter Dutton might be the galvanising target of hatred for social ­progressives over his uncompromising, unapologetic rhetoric — whether it be on health, crime or immigration — but, according to LNP insiders, it is the language many Queenslanders understand.

One senior LNP insider told The Australian the father of three may be the “only hope of holding onto power’’.

Read the article in full here.

Rosie Lewis 9.57am: Expect another ballot

Mr Dutton’s resignation as Home Affairs Minister means Malcolm Turnbull will have to reshuffle his cabinet. By no means is this over. Commentators are predicting a second leadership ballot in the weeks or months ahead.

Dennis Shanahan 9.55am: PM’s survival not guaranteed

Malcolm Turnbull’s victory in the leadership ballot has solved little for the Liberal Party.

It has also shortened the odds of an election before Christmas and confirmed the rebellion against the Prime Minister is far wider than just a few malcontents.

Peter Dutton has won substantial support in the sudden vote which means 35 members of the Parliamentary Liberal Party do not want Turnbull to continue as leader and Dutton can now campaign from the backbench without Cabinet solidarity restraints.

Read the article in full here

Rosie Lewis 9.43am: Dutton resigns

Peter Dutton has resigned from the frontbench following today’s events.

Peter Dutton walking to the partyroom meeting. Picture: Kym Smith.
Peter Dutton walking to the partyroom meeting. Picture: Kym Smith.

Greg Brown 9.35am: Substantial vote against PM

Malcolm Turnbull has remained Prime Minister but suffered a substantial vote against him in a ballot at the partyroom meeting this morning.

Chief Whip Nola Marino confirmed Mr Turnbull won a ballot against Peter Dutton 48 votes to 35.

Julie Bishop was not contested for the deputy leadership.

Melissa Yeo 9.30am: Dollar slips

Aussie dollar has slipped slightly on the news of the challenge, last down from US73.45c to US73.34c.

Greg Brown 9.25am: Turnbull wins ballot

Malcolm Turnbull has won the Liberal partyroom ballot by 48 votes to 35.

Malcolm Turnbull walking to the party room meetingthis morning. Picture: Kym Smith
Malcolm Turnbull walking to the party room meetingthis morning. Picture: Kym Smith

Greg Brown 9.23am: Deputy leader seat vacant

The position for Liberal Party deputy leader has also been declared vacant.

Greg Brown 9.15am: Dutton to challenge

Peter Dutton and Malcolm Turnbull have both nominated for the leadership of the Liberal Party, with MPs set to vote in a ballot.

Peter Dutton will challenge Malcolm Turnbull this morning. Picture: AP.
Peter Dutton will challenge Malcolm Turnbull this morning. Picture: AP.

Greg Brown 9.10am: Leadership declared vacant

Malcolm Turnbull has declared the leadership of the Liberal Party vacant in this morning’s partyroom meeting, challenging his dissenters to come forward with a challenge, The Australian has confirmed.

Joe Kelly 9.05am: Dutton, Turnbull into partyroom

Peter Dutton has walked into the Liberal Party room meeting alongside NSW Liberal Senator Concetta Fierravanti-Wells and trailing a few paces behind Victorian MP Alan Tudge and Queensland MP Andrew Laming.

Malcolm Turnbull entered a few minutes later flanked by his Deputy Julie Bishop and the Prime Minister’s staunch ally, Sydney based MP Craig Laundy.

Greg Brown 8.45am: ‘He’s finished’

Ahead of a partyroom meeting at 9am, Liberal MPs this morning told The Australian that Malcolm Turnbull’s leadership was terminal even if there was no move against him this morning.

“It is just a matter of time, Malcolm Turnbull’s Prime Ministership is finished,” one MP said.

Another MP said Peter Dutton had the numbers but doubted a challenge would happen today.

“But I think it should come to a head by the end of the week, we can’t keep dealing with these headlines,” the MP said.

Chris Kenny 8.00am: Dutton has handicaps to address

If Peter Dutton were to become prime minister anytime soon he would face some significant handicaps. He would be a stranger to most voters and an almost one-dimensional figure to those who are familiar with him. The Home Affairs Minister is well known by the feral left which views him as a hate figure for his tough border protection approach. Mainstream voters outside of Queensland would probably view him mainly as a competent and dour minister.

Read the story in full here.

Greg Brown 7.55am: Abbott keeps powder dry

Tony Abbott has arrived at Parliament House ahead of a 9am meeting of the Liberal partyroom but was keeping his powder dry.

“There will be a meeting of the partyroom today, so nothing to say here,” Mr Abbott told reporters this morning.

Former deputy prime minister Barnaby Joyce said as he arrived at parliament he had no idea what would happen in the Liberal partyroom this morning.

“Most of the time I am struggling to work out my own partyroom and working out the Liberal partyroom is even more difficult,” the former Nationals leader said.

Greg Brown 7.50am Pyne: Dutton supports PM

Cabinet minister Christopher Pyne says he would be “very surprised” if there was a challenge to Malcolm Turnbull’s leadership this morning, saying Peter Dutton wanted the Prime Minister to lead the government to the next election.

“I have spoken to Peter Dutton daily for the last few days, probably last week as well given that parliament was sitting, he has given me no indication of anything other than being loyal and supportive of Malcolm Turnbull, wanting Malcolm Turnbull to lead us to the next election and believing that we can win the next election against Bill Shorten,” Mr Pyne told Sky News this morning.

Mr Pyne, a moderate Liberal and key ally of Mr Turnbull, said MPs backgrounding journalists were “cowards”.

“I’ve spoken to (Mr Dutton) directly and he has told me he supports Malcolm Turnbull, he has only told me he has no intention of challenging Malcolm Turnbull,” he said.

Greg Brown 7.35am: ‘More energy changes to come’

Liberal frontbencher Alex Hawke believes there will be more changes to Malcolm Turnbull’s energy policy.

The Assistant Home Affairs Minister withheld his support for yesterday’s changes until he had “further discussions”.

“I think there is going to be more change, there has been some change and some listening and that has been good,” Mr Hawke told the ABC.

Greg Brown 7.20am: NEG ‘dead in the water’

Kevin Andrews. Picture: AAP.
Kevin Andrews. Picture: AAP.

Conservative Liberal MP Kevin Andrews has described Malcolm Turnbull’s signature energy policy, the national energy guarantee, as “dead in the water”.

“Whether we want to argue about it being legislation or regulation, the reality is that the NEG, for at least this term of this parliament, is dead in the water,” Mr Andrews, a close ally of Tony Abbott, told Sky News last night.

“There is more chance of seeing a Tyrannosaurus in the local suburban street than seeing this legislation come into the parliament.”

Greg Brown 7.00am Abbott questions PM’s commitment

Tony Abbott has questioned whether Malcolm Turnbull believes in his new energy policy, arguing it was hard to tell what the Prime Minister’s convictions were.

“Where are this Prime Minister’s convictions?” the former prime minister told the ABC last night.

“We always thought he was convicted on climate change issues, I think he probably still is, and it was a conversion of convenience.”

But Nationals MP Damian Drum delivered his own rebuke of Mr Abbott, calling him a “wrecker” and demanding he leave parliament.

“He vowed he wouldn’t be a wrecker and that’s exactly what he’s been: a wrecker,” he told the ABC.

“He needs to get out of the joint.”

What’s making news:

Malcolm Turnbull has lost the confidence of half of his Liberal Party cabinet colleagues as the Prime Minister’s backers admit they are bracing for a leadership challenge from Home Affairs Minister and leading Queensland conservative Peter Dutton.

The Coalition’s most marginal seat holders have publicly backed Malcolm Turnbull as his authority is undermined, while some are privately jostling for Home Affairs Minister Peter Dutton to take over to improve the party’s chances in Queensland.

Two leading constitutional experts say there are “genuine questions” regarding Home Affairs Minister Peter Dutton’s eligibility to sit in parliament, but his situation is unlikely to be tested as the government would have to refer the case to the High Court.

Cabinet will consider fast-tracking existing company tax cuts for small and medium businesses after the government offered to carve out the big four banks in a failed last-ditch bid to win Pauline Hanson’s support for cuts for businessturning over more than $50 million.

Deputy Prime Minister Michael McCormack has claimed credit for the Nationals for new powers to break up big energy companies if they misuse their market power, saying the party has long fought for the “big stick” measure.

The head of the government’s landmark 2015 competition review, Ian Harper, has criticised the Turnbull government’s hasty introduction of a new divestment power targeting the energy sector, arguing that the aim of market intervention should be to “block anti-competitive conduct, not to restructure the industry”.

International student numbers are expected to decrease and fewer humanitarian visas are likely be granted next year — with the Syria intake finalised — driving a downturn in temporary migrant numbers, Citizenship and Multicultural Affairs Minister Alan Tudge said.

Paul Kelly writes that the conservative minority has destroyed Malcolm Turnbull’s energy policy and virtually destroyed his prime ministership.

More Coverage

Dutton speaks to the battlers
Michael McKenna

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Original URL: https://www.theaustralian.com.au/national-affairs/politicsnow-liberals-set-for-leadership-challenge/news-story/900b7fb0eafd599f3b4d814fde606210