O’Neil set to be shoved as Albanese executes cabinet ‘refresh’

Home Affairs Minister Clare O’Neil is set to have Australia’s national security taken out of her hands as Prime Minister Anthony Albanese tries to offset political damage caused by Labor’s management of immigration issues.

Rumours have swirled for months that O’Neil would be shifted into a new portfolio as the Coalition has helped turn the government’s handling of last year’s High Court decision freeing immigration detainees into a political headache for Albanese.

Home Affairs Minister Clare O’Neil and Immigration Minister Andrew Giles.Credit: Alex Ellinghausen

This masthead has confirmed with senior government sources that the prime minister intends to head off the political distraction by putting a new MP into the tricky portfolio that is a constant target of Coalition and conservative media attention.

The sources, who declined to be named so they could reveal the prime minister’s thinking, said the situation was fluid and may change between now and Sunday when Albanese reveals his ministry.

The prime minister and O’Neil’s office declined to comment.

Immigration Minister Andrew Giles has co-managed the landmark NZYQ High Court with O’Neil. The pair attracted weeks of ferocious media and opposition scrutiny as the speed and competence of their response to the case and its flow-on effects were questioned.

Giles’ frontbench colleagues expect he will also be moved, but it remains unclear what action Albanese has decided to take on his Left faction ally.

The immigration minister has told MPs he understands the political reality and opposition calls to dump him, even if some of his Labor colleagues believe he and O’Neil have been treated unfairly in the media and their standing hurt by unforeseen and tricky events.

Agriculture Minister Murray Watt is widely viewed as a minister likely to be given a new portfolio. While some of his allies would like to see him in a proactive portfolio like housing, there is a distinct possibility Giles or O’Neil’s responsibilities could be transferred to Watt. There has been speculation Watt’s agriculture rounds could be given to Julie Collins, with Collins’ housing role handed to O’Neil.

Labor sources have also speculated Giles’ immigration portfolio will be elevated into the cabinet rather than the more junior outer ministry, boosting its prominence as a government priority.

In other mooted changes, Defence Industry Minister Pat Conroy or Veterans Affairs Minister Matt Keogh would enter cabinet in the spot of retiring minister Brendan O’Connor, who for months has been rumoured to be in line for the ambassador to Ireland role.

Senator Malarndirri McCarthy will replace Linda Burney as Indigenous Australians Minister. Assistant ministers Jenny McAllister, Tim Ayres or Ged Kearney could be promoted, and Andrew Charlton or Luke Gosling may enter the ranks of assistant ministers.

Albanese has made a virtue of not needing to sack a minister, emphasising that a rejig more than two years after the 2022 election would “enable a refresh” as the government puts together its re-election agenda for a poll due by May 2025. The reshuffle on Sunday is expecting to be a tinkering rather than a wholesale revamp.

“I will be seeking to be the first prime minister since John Howard in 2004 to serve out a term and to be re-elected as prime minister,” Albanese said at a press conference announcing Burney and O’Connor’s resignations on Thursday.

O’Neil is widely considered a bright and ambitious politician with a long future ahead of her. The 43-year-old entered parliament at 32 after a career as a mayor and a McKinsey consultant. Her smarts immediately marked her as a future senior leader, but despite her capability she is not a factional dealer like Giles and therefore has less institutional support.

Despite the setback a demotion or sideways shift would cause, O’Neil will likely remain a long-term cabinet minister and retain her ambition for more prestigious roles. In 2019, she unsuccessfully put her hand up to be Labor’s deputy leader when Albanese was selected as opposition leader.

MPs have questioned for many months why Albanese chose a first-time minister in O’Neil and a left-wing former human rights lawyer in Giles for the two ministries that most lend themselves to the muscular national security and tough-on-border rhetoric traditionally seen as Coalition strengths.

The NZYQ scandal, and Giles’ decision-making around deportation of dual citizens to New Zealand, have given the Coalition energy during its first term in opposition.

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