Wounded Abbott Set for Leadership Showdown Amid Revolt

Australia’s Prime Minister Tony Abbott will seek to shut down a revolt by party colleagues on Monday after bringing forward a leadership vote by a day to quell disquiet.

Liberal Party lawmakers will meet at 9 a.m. in Canberra and vote on a motion to declare the leadership vacant. Abbott will have to defend himself in a second ballot if more than half the party’s 102 lawmakers back the motion and someone then stands against him. Communications Minister Malcolm Turnbull said it wouldn’t be disloyal to run as a candidate in such a scenario.

The threat to Abbott, 57, comes just 17 months after his Liberal-National coalition won power and promised stability after years of factional infighting tore apart previous Labor governments. Even if he survives Monday’s vote the rank-and-file unrest has weakened Abbott, leaving him under pressure to unite the party and reverse the government’s poll decline.

“It’s been very damaging” to the government, said John Warhurst, a political analyst at the Australian National University in Canberra. “It’s a tremendous distraction and it leaves open that even if Tony Abbott survives he will face another challenge in the months to come.”

The party should deal with the motion “as quickly as possible and put it behind us,” Abbott told reporters Sunday as he brought the showdown forward by a day. Some lawmakers, including former Assistant Treasurer Arthur Sinodinos, criticized the move, saying it wouldn’t give them time to properly discuss the party’s best interests.

Not Disloyal

The leadership rumblings come three months before the government hands down the federal budget and details how it will repair a deficit forecast to hit A$40.4 billion ($31.5 billion) this financial year. Abbott and Treasurer Joe Hockey are still facing a public backlash against last year’s spending cuts, some of which remain stymied by a hostile Senate.

Investors have so far shrugged off the political instability. The benchmark S&P/ASX 200 Index capped a 12th day of gains on Friday, its longest winning streak on record, as the central bank’s move to join a wave of global monetary easing spurred bets on further stimulus. The Australian dollar advanced 0.4 percent last week, while yields on 10-year sovereign bonds ended the week at 2.45 percent, less than one basis point from where they started.

Opinion Polls

The government has made the worst start in opinion polls for a party returning to office in almost 30 years. Voters have deserted the coalition after it backtracked on election pledges not to cut funding for education, health and the public broadcaster, and amid concerns about Abbott’s judgment. In an interview with ABC News on Sunday, Abbott said having a spill motion moved against him was a “pretty chastening experience.”

Support for the coalition fell three points to 43 percent on a two-party preferred basis, compared to Labor on 57 percent, according to a Newspoll published in the Australian newspaper on Monday. Dissatisfaction with Abbott’s performance rose 10 points to 68 percent.

Asked who would be best to lead the Liberal Party, 25 percent backed Abbott compared with 64 percent for Turnbull. The survey of 1,178 people was conducted Feb. 6-8, with a margin of error of plus or minus three percentage points.

Knighthood Backlash

Discontent over Abbott’s leadership style came to a head after he bestowed a knighthood on Queen Elizabeth II’s husband, Prince Philip, on Jan. 26, Australia’s national day. Some Liberal colleagues said that exacerbated the backlash in the Queensland state election on Jan. 31 that saw the governing Liberal National Party lose a massive majority.

Foreign Minister Julie Bishop, 58, and Turnbull, 60, tipped by local media as potential successors to Abbott, have said they will vote against the motion. Neither has committed not to stand should the motion succeed.

Both would win over some voters were they to lead the party, according to a Feb. 5 Reachtel automated phone survey of 3,502 people selected at random.

While 34 percent said they would vote for the party with Abbott as leader, support rose to 44 percent under Turnbull and 41 percent under Bishop, according to the survey, which didn’t disclose a margin of error. The poll put the coalition trailing Labor, 45 percent to 55 percent, on a two-party preferred basis, meaning it would lose government were an election to be held now.

The vote on the Liberal leadership motion was originally to be held on Feb. 10, a day after parliament resumes in Canberra for the first time this year. Sinodinos said he was “disappointed” by Abbott’s decision to expedite the meeting as lawmakers “should be given adequate time to discuss the matter at hand.”

‘Tactical Advantage’

The move was made to give Abbott “a tactical advantage over whatever challenger there might be, to stop more discussion and more momentum building against him,” the ANU’s Warhurst said. “The danger is that it will be seen as a sneaky move and it might move some people from the undecided camp to opposing” Abbott, he said.

Senior Cabinet members including Finance Minister Mathias Cormann, Defense Minister Kevin Andrews and Employment Minister Eric Abetz have said they would vote against the motion; Treasurer Joe Hockey said he was confident it would be defeated.

Abbott said Feb. 7 his party’s standard procedure for such motions and leadership votes was for a secret ballot.

Should Abbott be ousted, Australia would have had five prime ministers, including former Labor leader Kevin Rudd’s two stints in the job, since John Howard lost office less than eight years ago. The previous five prime ministers held office for a combined 35 years.

Labor Years

For voters and Abbott, the turmoil has grim echoes of the internal battles and public sniping that overshadowed Labor’s almost six years in power. Rudd was ousted by his deputy Julia Gillard in a late night party coup in his first term, only to reclaim the prime ministership weeks before the September 2013 election that saw the Liberal-National coalition win office.

“The only question for our party is do we want to reduce ourselves to the level of the Labor Party in dragging down a first-term prime minister,” Abbott said Sunday.

Amid opposition in parliament’s upper house, his government is struggling to pass measures intended to rein in a budget gap forecast to reach about 2.5 percent of economic output in the year to June 30.

Since the coalition came to power, expansion of the economy has tapered off as it loses the heft of a mining investment boom amid a slowdown in demand for resources such as iron ore and coal. Growth slowed to 0.3 percent in the third quarter of 2014, the weakest in 18 months.

New Agenda

Abbott sought to spell out a new agenda for his government with a speech Feb. 2, in which he promised the government would cut company taxes, reduce childcare costs and create jobs this year.

Even should he see off the challenge on Monday, “it’s really hard to see how Tony Abbott’s prime ministership can survive after this,” said Zareh Ghazarian, a Melbourne-based professor at Monash University’s School of Political and Social Inquiry. “Once these sorts of grievances are aired in public, you can question how long can a leader last.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE