Malcolm Turnbull’s victory amid Senate bedlam

Illustration: Eric Lobbecke

Malcolm Turnbull has achieved his paramount objective after his midyear election win by proving he can govern in this dangerous parliament, secure his bills and negotiate with the Senate — yet the bedlam this week also exposes the risks to government arising from a publicity-hunting, untrustworthy, self-interested Senate in abject dysfunction.

The year ends with the Prime Minister in vindication and his government given a morale boost. Four months ago if offered this result, they would have seized it: passage of the two industrial relations double-dissolution bills, the revised super reforms and, at the final moment, a victory on the backpackers tax, a measure that had turned into a naked struggle over power, control and prestige.

The past fortnight has seen a brutal contest in what promises to be a destructive parliament. Turnbull has met the test he set for himself — policy delivery on a number of fronts. He says his double-dissolution election is now justified. His aim is to prove “the parliament is working”.

He has been driven by a single overriding purpose: to secure his legislation; just as Labor has been driven by an equal determination to destroy his legislation and, in the process, fatally undermine his government. Turnbull has won this immediate struggle.

His government has shown an agility in Senate negotiations. It has been helped by two rising stars, Employment Minister Michaelia Cash and Finance Minister Mathias Cormann. Both are set on an upward trajectory, having shown their ability at managing a chaotic Senate and deeply impressing the Prime Minister.

Turnbull and his deputy, Barnaby Joyce, ended the week with a grand pretence — the idea of a co-operative parliament involving the government, One Nation, the Nick Xenophon Team and David Leyonhjelm — but don’t believe it for a minute.

There is political hell to come. This week was a debased shambles — with senator Derryn Hinch and One Nation renegade senator Rod Culleton the prime wrecking agents. Hinch’s performance was seriously erratic. Susceptible to pressure from the Construction Forestry Mining and Energy Union and the “sellout” building companies, he gravely weakened the final version of the Australian Building and Construction Commission resurrection.

Then he engaged in a damaging ploy to try to intimidate the government into a backdown over the backpackers tax, much to Labor’s temporary delight and Hinch’s final humiliation.

Inexperienced but keen to be a player, Hinch seemed out of his depth and was exposed as unreliable and inconsistent. Perhaps he will learn from this fiasco. A fortnight ago he rang Cash in Perth and told her: “You’ve got me on both industrial bills.” The assurance didn’t stick. Pauline Hanson, by contrast, played it straight and impressed the government. She told Cash some time ago: the industrial bills are in the national interest; One Nation will support them; and we won’t horsetrade. Hanson honoured her pledges. Her problem is that she cannot control Culleton.

Turnbull is determined to avoid Tony Abbott’s greatest mistake: having the Senate veto too much of his program. A prime minister who cannot govern cannot survive. Devoid of the numbers in the Senate, Turnbull has been ready to cut almost any deal to secure his bills, witness the savage serial amendments that weakened the ABCC law. He has played a weak hand with some brilliance.

The most worthless media commentaries this week were the assertions that Turnbull somehow should have got a better deal out of the Senate on the ABCC — sure, and pigs might fly — and that he should have stood his ground and not done the ABCC deal, thereby bringing on himself the combined denunciation of Labor, the Greens, the crossbenchers and the media as a failed PM unable to manage the parliament.

The truth is that some complain when Turnbull doesn’t commit political suicide. He, in fact, has risen to the challenge — over the past fortnight he was aggressive in parliament, optimistic with the media and a willing negotiator with the Senate.

Turnbull is in a good psychological position. Bill Shorten operates as a leader on a winning run but Turnbull has nailed the Opposition Leader’s weakness: self-interested overreach. By succeed­ing in parliament, Turnbull gives himself a chance of succeeding in the country. So the government has scraped through. It goes to Christmas behind in the polls but relieved. It could have been worse.

For Treasurer Scott Morrison, it was a vital week. He played hard on the backpacker tax, believed he had a deal with crossbenchers at a 15 per cent rate (yet another government concession), told Labor to “take a flying leap” and nearly came undone.

The backpacker tax issue became something far bigger and totemic: it was about who controlled parliament, who controlled the agenda. It was a contest in power, pure and simple. If Turnbull could not prevail on a backpacker tax, then what value did he possess as PM? If Morrison could not determine its rate, then what authority did he have as Treasurer?

Have no doubt Morrison and Turnbull were in deep trouble when the Senate on Wednesday in a surprise vote saw Hinch and Culleton side with Jacqui Lambie to defeat the government’s 15 per cent rate, throwing the Coalition into confusion.

By Thursday morning the ducks were being lined up for a Turnbull-Morrison humiliation. Morrison had had enough of these casino roulette antics — he said the government would not budge from 15 per cent. But the noose tightened against the government when Hinch and Culleton insisted on a 13 per cent final position and Labor, sensing a political kill, joined them.

Turnbull seemed on the ropes when the National Farmers Federation (while backing the government) demanded a resolution before the day’s end. Yet the deal came from left field — a Coalition-Greens deal, put together after Greens leader Richard Di Natale, still keen to display his pragmatism, approached Cormann.

As Labor attacked the government during question time, Morrison was finalising the letters that sealed the deal and left Labor stranded. The final deal saw Morrison get 74 per cent of the original savings from the backpackers tax plus offer the Greens a $100 million Landcare package.

You may ask, as a puzzled reader, why such fuss about a mere backpackers tax? Why the incredible drama over the difference between 13 and 15 per cent? Good question. The answer tells the entire story of our current politics. Issues are not treated on merit. They are not sorted out on a rational basis. Each issue is integral to the elemental power struggle that will make or break Turnbull’s government.

Shorten told the ABC’s Leigh Sales that Turnbull should “sit down and work with Labor”. That can only be a joke. Labor used the backpacker tax issue to try to humiliate Turnbull and nearly succeeded. The mood is similar to the Gillard 2010-13 parliament, but far more difficult for Turnbull since he faces an obstructionist Senate.

The loss of face for Hinch came on Friday when he held a doorstop to “explain” his position. With a solution in the offing, Hinch blew up the issue. Having previously backed a 19 per cent and 15 per cent rate, Hinch insisted it had to be 13 per cent, but offered no rhyme or reason. When asked why, he couldn’t answer. “No, we’ve come up enough,” he said of his position.

Turnbull’s Friday morning interview with Kieran Gilbert from Sky News captured the situation.

Gilbert: “Derryn Hinch said he would back 15 per cent, he’s now…”

Turnbull: “Well, he said he’d back 19, he’d actually voted for 19.”

Gilbert: “19 then 15, and now reneged on 15, he wants 13. He’s called the human headline. Is this all about him trying to get headlines, do you think?”

Turnbull: “You know, Derryn is — I’m not going to attack Derryn here. Let’s focus on Bill Shorten.”

There are two conclusions from the Senate bedlam this week. The government got the job done, stitching together shifting alliances of crossbenchers, then Greens, depending on the issue. Yet the bigger message is the parliamentary shambles and polarisation, witness the backpackers tax fiasco and the negotiating torture over the ABCC bill.

Remember, Abbott took the ABCC proposal to the 2013 election. It has been fought over for years and the final bill this week was radically amended, with Hinch again the prominent player.

Both the ABCC and the Registered Organisations bill passed earlier constitute a potentially important industrial relations reform. Turnbull has repeatedly argued the value of the latter because it applies the same standards of accountability to 47 trade unions and 63 employer groups as now apply to companies.

It means Australian workers will be entitled to know what unions are doing with their funds and whether they are being used honestly and ethically. In short, it is about better governance. Cash calls it a change in industrial culture. The fact that this bill was defeated in the previous parliament is a commentary about our public policy debasement.

The government through Cash worked co-operatively with Nick Xenophon on the whistleblower protection amendments he moved. They were essentially consistent with the recommendations from Justice Dyson Heydon in his report.

The ABCC law has three main provisions — restoration of penalties to their previous level; allowing the law to be enforced in relation to private “settlements” (for example, it has removed the equivalent of the police having no power to prosecute a driver having caused a crash if the drivers reach a mutual “settlement”); and introduction of a building code imposing a range of conditions to be met if an employer is to be eligible to tender for federal government contracts.

The building code is the heart of the new law. Master Builders Australia estimates infrastructure costs on schools and hospital have blown out up to 30 per cent more because of industrial action and delays on sites.

Since the former Labor government abolished the ABCC in 2012, the rate of disputes in the construction sector has increased by 40 per cent.

At the start of the week Cash felt she had the ABCC lined up for passage with Senate crossbencher support. Deals were being done with Xenophon; Hanson was supportive; enough crossbenchers were on side.

Much of the focus fell on lobbying by employers for a nine-month transition period before the building code applied.

Employers, in fact, fell into two groups, those brave enough to resist the CFMEU and avoid cutting any deals pending the ABCC law, such as Kane Constructions, and those like property giant Lendlease and the South African Probuild, who had done generous enterprise agreements with the union inconsistent with the code.

The Australian Industry Group advised Turnbull and Cash there should be a nine-month transition for such companies. The ministers agreed. So did Lendlease, telling government it supported the nine-month transition.

But the CFMEU had come to Canberra to fight.

The government, in turn, found that Hinch became more sceptical. At first he agreed with government ministers on the nine-month transition, only to quickly revert to two years. Then he became intransigent.

Turnbull asked Hinch: “The AIG has agreed. Lendlease has agreed. What is the problem?”

The problem was obvious: it was the CFMEU campaign. In the end, Turnbull and Cash had to submit. If they had refused the entire building code was at risk.

As Robert Gottliebsen wrote in this paper, while Cash achieved a “remarkable victory”, Noonan secured a “second chance” for the CFMEU.

The result is that a significant minority of building companies who have cut deals with the union are not required to be compliant with the building code reforms until November 29, 2018. That is close to the next election. At that time Labor, financed by the CFMEU, will presumably pledge to abolish, yet again, the ABCC.

Labor’s employment and workplace relations spokesman Brendan O’Connor said the ALP opposed the building code and the ABCC’s resurrection. “We won’t be looking to continue its conduct and operation in government,” O’Connor said.

Cash rejects the critique the new ABCC has lost its teeth. She says the change will be felt from day one — new penalties apply and the strict conduct requirements under the building code will apply to all building companies regardless.

Defending himself, Hinch said he did not “give a stuff” about Lendlease and backed the two-year transition based on his own concerns about the law. “I don’t believe I got snowed by either side,” he said.

There is no proof, of course, that he was “snowed” but the government finishes the week believing that Hinch has a lot to learn about consistency and application.

The contrast with Xenophon is obvious. Xenophon won a number of concessions agreed by the government, most notably the resort to a protectionist procurement policy whose real meaning is still being debated.

Labor branded Turnbull a “mercenary” for being prepared to trade so much to get his bills. But in the current parliament that is a compliment. Turnbull made it clear — he will operate by the rules the Senate adopts and that means horsetrading whenever needed.

This is the parliament the public voted in. If the public doesn’t like the disreputable shambles on display, maybe it needs to change its vote next time.