Turnbull loses support of key ministers in blow to leadership

Malcolm Turnbull, Australia’s prime minister, speaks during a news conference at Parliament House in Canberra, Australia. (Bloomberg pic)

CANBERRA: Prime Minister Malcolm Turnbull suffered a likely fatal blow to his leadership on Thursday as three key Cabinet ministers resigned and demanded he allow another ballot of party lawmakers to decide his fate.

Finance Minister Mathias Cormann, Communications Minister Mitch Fifield and Jobs Minister Michaelia Cash held a news conference to announce their resignations and demand Turnbull convene an immediate meeting. His chief rival Peter Dutton, a lightning rod for disaffection with the government’s slumping poll ratings, narrowly failed to unseat the prime minister in a vote on Tuesday and intends to challenge again.

The resignations “mean it’s game over for him and Australia will have a new leader by the end of day,” said Haydon Manning, an associate professor of politics and public policy at Flinders University. “My money would be on Dutton but you can’t rule out another candidate giving it a go.”

Australia’s latest political upheaval has been driven by infighting between moderates and conservatives in the ruling Liberal party as its poll numbers fall ahead of an election due by May. The potential change of leadership adds more uncertainty for businesses amid repeated policy missteps and flip-flops over the past decade.

Since 2007, the world’s 13th-largest economy has seen five leadership changes and no prime minister has lasted a full term, contributing to policy paralysis across areas such as taxation and energy.

Australia’s dollar was down 0.4% to 73.20 US cents. Ten-year government bond yields dropped 2 basis points to 2.516%. The benchmark S&P/ASX 200 index was little changed.

Turnbull himself came to power in 2015 in a party coup before winning an election the next year with a razor-thin majority. Amid internal party dissent, he abandoned signature policies this week designed to restore energy security and give tax relief to big businesses.

Dutton, a 47-year-old former policeman, has used a raft of television and radio interviews to outline a populist policy manifesto, including removing a tax on electricity bills for families and pensioners, a wide-ranging investigation into energy companies blamed for spiralling prices, and cuts to immigration.

The father-of-three is seen as a leader of the party’s right wing, and as the minister in charge of immigration rose to prominence as a staunch supporter of the government’s hard-line policy of detaining asylum seekers in offshore camps.

Human rights activists have accused Dutton of stoking racial division by urging a crackdown on “African gang violence” in Victoria state. He also criticized Alan Joyce for using his position as chief executive officer of Qantas Airways Ltd. to advocate for legalizing same-sex marriage.

Dutton, whose switch to the backbench after resigning from Cabinet on Tuesday allowed him to openly canvass for support, has sought to show off his softer side in a bid to appeal to more voters.

“I just came from a middle-class family,” Dutton said in one radio interview. “My dad was a bricklayer, mum worked a second job so she could pay for school fees, so we didn’t have a privileged upbringing at all. We were brought up in a wonderful family environment, so family is incredibly important to me.”

With the tide turning against Turnbull, moderates who back him may field their own challenger in a bid to ensure Dutton doesn’t claim the top job. While Treasurer Scott Morrison and Foreign Minister Julie Bishop have been mooted as potential candidates, both have so far said they’re not running for the leadership.

Turnbull’s authority over the party has always been in doubt. The self-made millionaire and former Rhodes scholar, who led an unsuccessful push for Australia to become a republic in 1999, is regarded as too liberal by the party’s right wing.

He has tried to appease conservative forces in the party since seizing the leadership from Tony Abbott, retreating from some of his most strongly held convictions such as tough action against climate change. Yet those same people are now trying to tear him down, and voters have become disillusioned with his policy reversals.

Dutton’s economic credentials have also been called into question. On Wednesday he announced a plan to scrap levies from energy bills, prompting a top business lobby to warn such as move risks distorting the tax system.

He’s also facing media speculation he may have breached constitutional law by being a beneficiary of a trust that owns a childcare company and receives government subsidies. Dutton issued a statement on Thursday labelling the allegations “spurious and baseless.”