Can Sussan Ley survive the summer?

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Speaker 2 As speculation about Susan Lee's hold on the leadership continues to swirl, the opposition leader has gone on the defensive.

Speaker 2 Susan Lee has used a series of interviews to confirm she's confident her position as opposition leader is safe. You've always got to wonder when you say something is safe, is it really safe?

Speaker 2 The Liberal Party remains, however, split over its net zero policy, which is quite pivotal to their identity.

Speaker 2 So was her message an impassioned plea to the party room or a challenge to those seeking to undermine her? Welcome to Politics Now.

Speaker 2 Hi, I'm Patricia Carvellis.

Speaker 1 And I'm David Spears.

Speaker 2 And David, it's really been a week of chaos and division.

Speaker 2 They're the key words I think it's fair to say, inside of the Liberal Party as they figure out what to do on net zero after the Nationals set the scene on the weekend.

Speaker 2 I thought it was really interesting that Susan Lee, so we're recording this on a Wednesday, did a series of very well-planned and thought-through media interviews to push back against the idea that she's a dead woman walking, that her political leadership is

Speaker 1 finished.

Speaker 2 What do you make of the way she framed it?

Speaker 1 Well, a few thoughts.

Speaker 1 These climate convulsions in the Liberal Party, and we've seen a few, never seem to end well for the leader. There's a string of them who have lost their jobs because of these sorts of moments.

Speaker 1 So understandably, the focus has been on how long Susan Lee will survive, given the obvious divisions we're all seeing.

Speaker 1 What she did with these interviews, these rounds of the media interviews, was to stress that she's untroubled, that she's happy, that she's confident she will last in the job, and that the process has actually been a positive process in terms of trying to formulate their policy on net zero.

Speaker 1 Pika, I don't know what you think about that, but I think the process has a lot of problems. And let me just explain, I think

Speaker 1 if the Liberal Party had indeed run its own race over the last six months, trying to reach its own position on net zero, they probably could have reached a position.

Speaker 1 I think they would have reached a position even about a month ago that would have been in favour of keeping net zero in some form perhaps you know with extra caveats around it uh perhaps taking it out of law but but maintaining net zero as as a as a form of words in in their policy what the nats have done uh is gazump them and uh again in and now you're in a situation where conservatives like angus taylor james patterson mikali cash and so on are internally arguing that it's got to go um whereas a month ago i don't think they would have obviously andrew hasty and even after andrew hastie quit the front bench over net zero and other things, there was still a mood amongst these conservatives that no, we can stick with some sort of net zero, but it's shifted.

Speaker 1 So if the Liberals had run their own process and done it faster, I think

Speaker 1 they could have settled a position that included net zero not that long ago.

Speaker 1 Instead, what they did was have this coalition process led by Dan Teehan, also including Susan MacDonald from the Nats, to reach a coalition position, unaware or perhaps not sufficiently aware that the Nats were were going to do this.

Speaker 2 Okay, you've gone to the key question.

Speaker 2 Sufficiently aware.

Speaker 2 I don't know how they missed that the Nats were going to do this, because it seemed clear to me that this is what the Nats were doing. And I'm not the opposition leader, you may have noticed.

Speaker 2 So how did I pick it up? And they didn't. I don't think this is just on Susan Lee.

Speaker 1 I think this is also on Dan Tiern.

Speaker 2 If you think just even a couple of months ago, I had Hasty on afternoon briefing, for instance, before he'd quit from the front bench, which is why I think it's key, where he just said this needs to be settled in the next little period of time.

Speaker 2 You know, at that point, it was like a warning shot, right? This is before he resigns or anything, he'd clearly not decided to resign yet.

Speaker 2 To put the foot on the accelerator and get to a position, actually to mess with history where the Nats always set the agenda, not by fact you can show it, referendum, nuclear, and there have been other examples.

Speaker 2 And the public then comes to a view that the nationals, who are increasingly seen as far right by the sort of middle Australia, that's the image that they've now cultivated increasingly, are leading the liberals.

Speaker 2 So you'd think even, you know, real politics that you'd think, I want to shift that dynamic, especially after they split and then got back together, where you needed to change the power dynamic and she needed to flex her muscle.

Speaker 2 Tim Wilson made a point in one of his media interviews. He's, of course, a leading moderate.
I don't know.

Speaker 2 Sometimes he likes to tell you he's not a moderate, but he's kind of acts like a moderate-ish, yeah?

Speaker 1 So it's fair to say he's not a capital C conservative. Yeah, and look, he's probably not the only one who gets a bit worried about the label that's pinned on their

Speaker 1 absolutely.

Speaker 2 Absolutely, but you're not in the hasty camp, that's clear.

Speaker 2 Um, and he made the point that you know, she dealt well with the Nationals when they had their tantrum, remember, over nuclear, which meant they split and then they got back together.

Speaker 2 And she did like that was an impressive part of her leadership. She stared them down.
Now, what's changed? Well, her leadership has eroded significantly in six months.

Speaker 2 I think personally, anyone's leadership in this party that's fractured, doesn't know what it stands for, has

Speaker 2 lost middle Australia would be in the same position. I don't think she's, you know,

Speaker 2 I don't think she's destroyed it any more than anyone else would have broken the toys, right? But she, however,

Speaker 2 does look like she's lost. her convictions.

Speaker 1 It's just that word convictions.

Speaker 1 And yeah, we're talking about process here, but it does matter because, as I said, I think they could have, with a different process, have reached a different position. But it goes to this point.

Speaker 1 Should leaders follow their party room

Speaker 1 or should there be some issues where they need to take a stand, perhaps even internally, but from all we're hearing, Susan Lee's been a bit reluctant to do that as well.

Speaker 1 She does not want to make a captain's call here. She wants to follow where her party is at.
But I wonder if that's been... the right approach on this.

Speaker 2 Well, this is when she talks about not wanting to make captain's calls, because that was one of her big lines in the media interviews in the morning.

Speaker 1 Who's she talking about?

Speaker 2 Well, yeah, she's talking about Peter Dutton, right?

Speaker 2 Who did make a number of captains' calls, very controversial ones, actually,

Speaker 2 that the party was very loyal to him, even though, you know, there was grumbling, but people did back him in.

Speaker 2 And

Speaker 2 his judgment, as I say it, was becoming less and less. It was more off as the term went and the election got closer.

Speaker 2 Like the timing was wrong for him because his calls were weird and clearly electorally not popular as well and she wants to go i'm not like that i'm not going to dictate i'm going to go through the process now that should superficially give her credibility in the party and yet it's not because back to conviction a key word

Speaker 1 looks like she'll kind of go where the wind's going and when you look like you're going to go where the wind's going well no one really knows what you stand for yeah so the fact that it's drawn out this long has allowed the nats to get in there and make their own call that's put enormous pressure on the libs There are a couple of other factors that Conservatives point to as well, like what's happening with the Tomago smelter, and we'll come back to that.

Speaker 1 What's happened with the inflation figures that have now this week meant no interest rate cut and an upgrade in the inflation forecast from the Reserve Bank, that all of these factors now have the Conservatives thinking we've really got to drop any reference to net zero in our policy.

Speaker 1 That's the process. Where does that leave Susan Lee now? in such an unenviable position where the moderates are saying privately she's done if she drops net zero.

Speaker 1 Not that they're expecting any move against her this year, but they can't see her lasting as a leader who has bowed to the National Party on this.

Speaker 1 But similarly, Conservatives who are saying

Speaker 1 even if she does what they want now and drops it,

Speaker 1 her future is still uncertain. They don't see her lasting all that long either.
So, yeah, she's in a tough, tough spot.

Speaker 2 Well, it's beyond tough. What I've found worth mentioning is that when I talk to anyone,

Speaker 2 so there's no difference here,

Speaker 2 everyone agrees that her leadership, this is quite a big call I'm about to make, is over. Everyone.
I haven't found anyone who says, nah, she can make it to the election. No one.
I don't know.

Speaker 2 Have you?

Speaker 1 No one with enormous confidence that she'll make it to the election. That's absolutely true.
I don't think that confidence has been there though for a while.

Speaker 2 Maybe, but now it's really clear and they're not off the record. There's not even, because you talk to people in background, obviously it's part of our job.
It's not even like they're kind of hedging.

Speaker 2 The only thing that they're debating is the timing. Now, this brings me to this: you know, okay, will the killing season happen by the end of the year?

Speaker 2 The current consensus, and I say current because politics is very fickle. Things move quickly and unexpectedly.
But the current, as we record on Wednesday, is that it won't happen this year.

Speaker 2 That's the view, even from the people who are, you know, capable of taking it on. So that just means it'll happen next year.
So, what she's like, what happens when you're a leader that has, you know,

Speaker 2 the funeral is being planned already?

Speaker 1 Well,

Speaker 1 then you get into the, well, who should it be?

Speaker 1 I don't think there is consensus around that, although some moderates I've spoken to are sounding a bit more positive about Angus Taylor, funnily enough, this week and how he's approached all of this.

Speaker 1 But look, we've all seen the history of this over the decades we've been in the building. It never ends well once this sort of talk starts.

Speaker 2 No, it's self-fulfilling too. Like, it's hard to come back from it when you lose confidence.

Speaker 1 The difference is, I think, we're now in a position where they are so defeated, demoralised, and uncertain about their future that

Speaker 1 is it clear that Angus Taylor, Andrew Hastie, Tim Wilson, Ted O'Brien, would any of these guys be able to lead this party to a better place right now?

Speaker 2 Well, great question. And also worth mentioning, you just mentioned four male names.

Speaker 1 That's the other difference, too.

Speaker 2 Well, that is currently, from a couple of conversations I have, and I'm just working on this, a great point of contention inside as well.

Speaker 1 Like, okay,

Speaker 2 we don't think she's traveling well. That is a broad view.

Speaker 2 But do we only look at men? Is that what we're doing now? Is that our new thing again? Like, how's that going to look? Because remember, they also have a massive woman problem that's gone nowhere.

Speaker 1 And just on that, I mean, you know, I know we can focus on mistakes that Susan Lee has made on, you know, calling for Kevin Rudd to be brought home, the t-shirt comments and

Speaker 1 these mistakes that have been too many. But we're following this very closely.

Speaker 1 To most people out there who aren't following all of this, will they simply see, what, they put a woman in for six months or so and then got rid of her and decided to dump net zero.

Speaker 1 How's that going to go down? But you know, look at each of these options. Angus Taylor clearly has the baggage of as shadow treasurer taking

Speaker 1 to the election,

Speaker 1 higher taxes and even higher deficits for the first couple of years at least.

Speaker 2 Helpful for a Liberal, not.

Speaker 1 He was the shadow energy minister that signed up to net zero under Scott Morrison. You know, Ted O'Brien was the shadow energy minister at the last election six months ago.

Speaker 1 He was still on board with Net Zero.

Speaker 2 And building state-funded nuclear power plants. Yeah, exactly.

Speaker 1 So look, each of them...

Speaker 1 does have issues. Look, they all at the same time.

Speaker 2 And then there often isn't in politics, right?

Speaker 2 Like every contender has a set of issues, it's fair to say, and you choose the one that has the less, you know, you don't get sort of the perfect candidate ever.

Speaker 2 Even Albanese, who's doing really well now, was not the perfect candidate. He had a set of issues they were worried about as well.
Not as acute as these ones. I don't want to compare.

Speaker 2 But, you know, you'd say. And yet,

Speaker 2 he's turned out to be quite a successful prime minister.

Speaker 1 I remember at the time, Anthony Albanese, oh, didn't he argue against both turnbacks? He's going to have to shift on that. He's got the baggage of being the left faction warrior for so many years.

Speaker 1 So, yeah, there are always issues that need to be worked through. You've got to deal with them head-on once you get the job and then move on.
And that can happen. That can happen.

Speaker 1 So for a lot of these blokes, yes, there's a path through this, but

Speaker 1 you've got to get through that

Speaker 1 very difficult process of tearing down their first female leader and then dealing with this unsettled issue of climate policy.

Speaker 2 Well, they say

Speaker 2 the Liberal Party's polling is at record lows.

Speaker 1 Yeah, good luck to you after you make that call in terms of what

Speaker 1 things are, they can always get worse.

Speaker 2 And will, I predict. Look, I want to just segue to something I know you know quite a bit about.

Speaker 2 An aluminium smelter story,

Speaker 2 kind of a staple of Wednesday's pods, it seems. What's happening with the northern Tasmanian aluminium smelter? Make that sexy form.

Speaker 1 Okay, well, there is a link here in that while the coalition are tearing themselves apart,

Speaker 1 if and when they do settle on a position to either dump net zero, significantly water down the commitment, whatever it is.

Speaker 1 Sure, Labor's having an absolute field day right now with the mess on the other side, but I do think there are red flags here that Labor needs to be worried about.

Speaker 1 If bipartisanship ends on net zero, that does have an impact on public discourse around it and does make life, I think, over the longer term a little more difficult for Labor.

Speaker 1 They will need to keep making the case as to why net zero is important and economically beneficial for Australia, I think, will be something they really have to focus on.

Speaker 1 Because what we've now seen, last week it was Tomago in New South Wales.

Speaker 1 Now it's another Rio Tinto-owned aluminium smelter in Tasmania Bell Bay employs about 550 people which is a pretty big deal in northern Tasmania where it's based now they've got a 12-month stop gap a 12-month reprieve because the Tasmanian government have done a deal they own hydro power there

Speaker 1 a power deal for them to keep them running for the next 12 months beyond that it's an uncertain future so the Commonwealth the Tasmanian government and Rio now have to work out what they can do to keep that aluminium smelter going so two smelters

Speaker 1 they're really you know, as someone in the office was just saying, the canary and the coal mine, when it comes to this energy transition, how do they survive with power prices where they are?

Speaker 1 And I just think this sharpens the focus on how difficult this transition is for some of those in heavy industry and the difficulty for the government as well in protecting these blue-collar jobs.

Speaker 2 And protecting those blue-collar jobs is kind of core business for a Labor government, right?

Speaker 2 And also has been kind of an essential part of the Albanese government's rhetoric as well.

Speaker 2 It's actually, you know, interesting if I can segue back to someone like Andrew Hastie, who's been trying to trying in his own messaging to steal some of that kind of...

Speaker 1 Well, he's more pro-market intervention from the government to protect key industries that

Speaker 1 have a national interest case to keep them going. And aluminium would fit that bill, I think, for Andrew Hastie as well.

Speaker 2 But just, yeah, in terms of the contrast in positions, the sort of traditional sort of dry liberal approach, small our liberal, but dry on economics. This is a divide there.

Speaker 2 And now Labor has this wicked issue in its energy issue.

Speaker 2 Yesterday on the pod, I was talking about, for instance, I just mentioned it wasn't the focus, but the free three hours of power that Labor is offering.

Speaker 1 Well, it feels like that was announced. You know, maybe this was always planned for announcing, you know, on a Tuesday when Parliament's sitting, but it feels like that is a nod from Labor.

Speaker 1 to the pressure that's going to be coming on this energy price issue that they know they need to get out there and make the case as to why this energy transition is helpful.

Speaker 1 Here's three hours of free power a day, all thanks to the solar panels that are on everyone's roofs. Even if you don't have solar, you can access this.

Speaker 1 So it's an effort to show this energy transition is working, will have benefits, while we're all feeling the pinch of these higher power prices right now.

Speaker 1 On Tomago, there is pessimism within the government.

Speaker 1 They're still negotiating with Rio on a way through this, but the clock's running on that, and there is some concern about whether they will be able to land something.

Speaker 1 So there are just these examples of where

Speaker 1 the transition is difficult and I think politically difficult for the government.

Speaker 2 Yeah, and

Speaker 2 that is a real slowburn for the government too. Like that is kind of, and in Labour circles, that's how people talk of it too.

Speaker 1 This

Speaker 2 rollout of the renewables is going to be hard to land and is already increasingly hard to land.

Speaker 2 So they're currently, and I asked Chris Bowen about this, that, you know, working out their gas strategy. Yep.
That obviously, you know, for anyone who's missed this,

Speaker 2 guess what? Gas has fossil fuels.

Speaker 1 No.

Speaker 2 You know?

Speaker 2 Yeah, I'm serious.

Speaker 1 But they know they need more of it.

Speaker 2 They definitely do, and that will be part of it. I put to Chris Bowen, is that not going to have an impact on our emissions reduction trajectory and their net zero plan?

Speaker 2 People are so hung up because of the sort of circus that the Coalition is is on the coalition's how they will get to it in this kind of fantasy alternative government world, which seems far away.

Speaker 2 But the government that's actually in charge is going to struggle to meet its targets.

Speaker 1 Yeah. Right? Yeah, exactly.
And can the coalition land a glove on them at the moment?

Speaker 2 No. No, and some of them have been very open about in lamenting how bad they are as an opposition.

Speaker 2 And then Labour people, which might surprise our listeners, but the smart ones, are lamenting that they don't have a stronger opposition.

Speaker 2 I know that sounds counterintuitive, but the smart people know that you need that to remain a good government.

Speaker 2 And so there is a fear like, oh, we better have internal, like we better really keep on our toes because...

Speaker 1 It makes us a better government.

Speaker 1 And that's absolutely right. Look, for the coalition, sure, if they could settle a position.

Speaker 1 They might be able to put some pressure on the government over these things.

Speaker 1 But I'm still very unclear what sort of position they can settle that would solve the problems for these aluminium smelters. If you drop net zero PK,

Speaker 1 what's the alternative that's going to bring power prices down anytime soon? You could shift subsidies from renewables into coal and gas and nuclear, but these things take a long time to build.

Speaker 1 Even a new coal-fired power station, a Healy high-efficiency, low-emission coal-fired power station, super expensive and takes a long time to build. So

Speaker 1 does that save these smelters from turning off their processing anytime soon? I don't know.

Speaker 2 There doesn't seem to me, you know, and actually it's one of the talking points of the government here. We don't have a magic wand for this, right? Yeah, yeah.
And there really isn't.

Speaker 2 And if Labor is good at politics, and I think they've become better at politics in my view, if they're good at it, they need to really, I keep saying this, really paint that picture.

Speaker 2 For those who are dancing with the get rid of net zero emissions stuff,

Speaker 2 get rid of net net zero by 2050,

Speaker 2 that's not going to give you the sort of fantasy

Speaker 2 cheap energy tomorrow.

Speaker 1 No, and look, Jim Chalmers, who may not be having the best time with inflation and interest rates and superannuation, whatever.

Speaker 1 He did yesterday in the parliament start to make this case, though, about the Treasury modelling, that if we drop net zero, we're going to lose investment, we're going to lose jobs, there is an economic cost of doing this.

Speaker 1 I think that's kind of the space where Labor needs to focus more, don't they?

Speaker 1 What's at risk economically?

Speaker 2 And activating all of the sort of players in business to, which they have been a little bit, but to more clearly articulate that.

Speaker 2 When you don't have a bipartisan position between the two parties, there is that political risk.

Speaker 2 potentially, even though the coalition's far off, I think, the numbers, but of what happens if there's a switch, that investment kind of shifts, the subsidies shift, everything shifts.

Speaker 2 Why would you want to invest long-term in certain things if that's all about the collapse?

Speaker 1 If you talk to the Business Council, the Australian Industry Group, all of these organisations, they will make it very clear they do not want this debate over net zero opened up again.

Speaker 1 They want certainty. I mean, you talk to Rio Tinto.
Do they want coal-fired power running their aluminium smelters down the track? No, they don't. They've made that very clear.

Speaker 1 They want to shift these to green aluminium smelters. That's where the global demand will be for green aluminium.
So the shift's got to happen.

Speaker 1 It's painful, it's difficult, and it's potentially politically problematic for the government.

Speaker 1 But that's the future.

Speaker 2 It's the future. We're the future, aren't we? We are.
I believe the children are our future. That's it for politics now for today.
Thanks for joining me. Thanks, Piko.

Speaker 2 And thank you again to those who have taken the time to give us their feedback via our listener survey. If you haven't done it yet, we would love to hear from you.
The link is in the show notes.

Speaker 2 You can say nice or bad things about us, constructive feedback. I would like to hear more of this.
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Speaker 2 Insiders on Background is on Saturday, and I believe you have a special episode about the 50th anniversary of the Whitlam dismissal.

Speaker 1 Yeah, 50th anniversary of the dismissal. Nikki Sava, our listeners would know.
She was there. We'll talk to Nikki.
And Troy Bramston has written a terrific new book

Speaker 1 on all that unfolded. So we'll hear a couple of really interesting perspectives on it.

Speaker 2 We certainly will. And tomorrow, Jason Katsukis from the Saturday Paper will join me and Mel Clark for the party room.
If you want to send a question, send it to thepartyroom at abc.net.au.

Speaker 2 We'll try and answer it.

Speaker 1 See you, David. See you, PK.