Titanic-Building Tycoon a Wild Card for Australian Senate

Photographer: Mark Graham/Bloomberg

Clive Palmer, federal leader of the Palmer United Party (PUP) and chairman of Mineralogy Pty. Close

Clive Palmer, federal leader of the Palmer United Party (PUP) and chairman of Mineralogy Pty.

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Photographer: Mark Graham/Bloomberg

Clive Palmer, federal leader of the Palmer United Party (PUP) and chairman of Mineralogy Pty.

Three members of Clive Palmer’s nascent party today begin their six year terms in the upper house of Australia’s parliament, risking efforts by Prime Minister Tony Abbott to push through laws such as a paid maternity-leave program.

The 15-month-old Palmer United Party will form the nucleus of a voting bloc in the 76-seat Senate that Abbott will need to win over to enact laws. Mining magnate Palmer, 60, said in an interview June 28 that he wasn’t a fan of many of the government’s policies.

“The government is looking at more of an austerity program and cutting back,” Palmer said from his Palmer Coolum Resort: Dinosaur Park, where he was hosting a weekend of live concerts and amusement rides for voters in his Queensland state district of Fairfax, the lower-house seat he won in the September federal election. “You can’t just cut back forever, which is a substitute for no policy.”

For Abbott, whose efforts to meet election promises such as reducing government spending to deliver a budget surplus have been stymied by the outgoing Senate, Palmer’s rise is an unexpected hurdle. While his mining, pro-business background could align with the center-right Liberal-National coalition, Palmer has delighted in confounding expectations, political analyst Andrew Hughes said.

“Palmer’s unpredictability makes him a difficult proposition,” said Hughes from the Australian National University’s Research School of Management in Canberra. “Abbott must hate the fact that he can be held to ransom by a man who’s gone very quickly from a bit of a joke in the political scene to being able to decide whether this government is going to be successful or not.”

Law-School Dropout

After accumulating a A$40 million ($37.6 million) fortune through real estate deals, Palmer, a law-school dropout, briefly retired in his late 20s. He re-entered public life by buying vast tracts of land holding low-grade iron ore in Australia’s north-west and running successful Queensland state election campaigns for the National Party.

Over subsequent decades he added coal, nickel, gas and oil assets to his portfolio, as well as a soccer team, thoroughbred horse stud, golf resorts, private jets and a Rolls-Royce Phantom. In April 2012, he announced he’d build a replica of the Titanic in a Chinese shipyard and sail it from England to New York by the end of 2016.

Not all his ventures have been successful. Palmer’s Resourcehouse Ltd. iron ore and coal company pulled a $3.6 billion Hong Kong initial public offering in June 2011 due to a lack of market interest.

Bowls, Croquet

A split with the Nationals led Palmer to establish his own party for the 2013 election, which saw Abbott’s coalition win after six years of Labor rule. He secured a lower-house seat and got three party members elected to the upper house, which has the power to block laws. The coalition holds 33 seats in the new Senate.

“I’ve had my business career,” Palmer said in the interview. “Most people go down to play bowls or they join the council, or a bit of croquet. I got into politics.”

The party’s main policies going into the election were reducing the influence of business lobbyists on politicians and increasing the distribution of tax revenue generated from resources into the mining regions. Palmer in a June 26 speech reiterated his party will vote to demolish Australia’s price on carbon.

‘Quite Friendly’

“When it comes to supporting government policy, I am very happy to work with people,” Abbott told parliament the next day after meeting with Palmer for the first time since the election. Palmer described the meeting as “quite friendly.”

The three Palmer United Party senators that Abbott will need to work with are a mish-mash of personalities and backgrounds: Glenn Lazarus, a former rugby league champion nicknamed “The Brick With Eyes”; Jacqui Lambie, a one-time Australian Army corporal and single mother who spent some years on a disability pension; and Dio Wang, a Chinese-born migrant who was the chief executive of Palmer’s Australasian Resources.

Ricky Muir, who won a Senate seat for his Australian Motoring Enthusiast Party with just 0.5 percent of the primary vote, has pledged to form a voting bloc that effectively gives Palmer the balance of power in the Senate should Labor and the Greens oppose government legislation.

Trailing in opinion polls on the back of a budget that will cut government services, welfare and family handouts, Abbott needs a compliant Senate as he seeks to push the 12th-largest economy to a surplus within a decade from a forecast A$49.9 billion deficit in the fiscal year just ended.

Abbott’s Opportunity

The coalition lags Labor at 45 percent to 55 percent on a two-party preferred measure, with its popularity falling two percentage points from the previous survey, according to a Newspoll published today by the Australian newspaper. Voter dissatisfaction with Abbott reached 62 percent, his worst result since November 2012, the poll found.

The disparate nature of the voting bloc presents possibilities for Abbott, an experienced campaigner with 20 years in parliament, said politics professor Haydon Manning.

“The party itself doesn’t have a clear ideology or policy platform,” said Manning from Flinders University in Adelaide. “That presents an opportunity for Abbott to try to wedge them apart through promising them traction on individual issues close to their hearts.”

Palmer has indicated he’ll oppose plans to increase payments for medical visits and tertiary education, plus Abbott’s bid to introduce a new paid maternity-leave program.

‘Feel Strongly’

“I don’t think you give up on a position if you feel strongly about it,” Palmer said. “It’s not a matter of negotiating.” His party’s election success shows “there’s a lot of discontentment” among voters with the major parties.

Palmer’s policies are vague and populist, according to Hughes from the Australian National University.

“He has no real policy turf, he’s just going to go out there and say whatever he thinks at the time,” Hughes said. “That probably means he’s unlikely to have a long political career, but it will certainly be an entertaining one that will make life difficult for Abbott in the next few years.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Malcolm Scott

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