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ELIZABETH:

From Schwartz Media. I’m Elizabeth Kulas. This is 7am.

As Labor loses party discipline over tax cuts, the Coalition enters into an ugly post-mortem of its leadership change. Paul Bongiorno on the jostle for positions before parliament returns next week.

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ELIZABETH:

So Paul, um, ready to jump in.

PAUL:

Oh yes. Yes I'm ready. I've cleared the throat but not the brain.

ELIZABETH:

Okay, Paul, who might we say was the surprise figure in politics this week? Do you think it’s Joel Fitzgibbon?

PAUL:

Well I suppose that's always something we could have an argument about. But there is no doubt the contribution of Joel Fitzgibbon to the overall tax debate this week helped the government more than it helped the Labor Party.

ELIZABETH:

Paul Bongiorno is a columnist for The Saturday Paper.

PAUL:

It's good to remember who Joel Fitzgibbon. He's the Shadow Minister for Agriculture and Resources, but he's also the Member for Hunter, which is a big coal mining seat in the Hunter Valley of New South Wales. He came into the Parliament in 1996 and he plays the role as the convenor of the right wing faction in New South Wales so quite an influential internal party political role there. So Elizabeth with that background you can understand that when he went on Radio National Breakfast on Monday to give an interview...

Archival tape — Unidentified woman:

“Joel Fitzgibbon, welcome back to Breakfast”

PAUL:

That limits Labor's options in the tax cuts package, it reverberated.

Archival tape — Joel Fitzgibbon:

“I’m one happy New South Wales MP this morning Fran…”

ELIZABETH:

And what did he say in the interview?

PAUL:

Well his starting point was that you can't deny the punters a tax cut from opposition.

He emphasized, particularly so soon after an election…

Archival tape — Joel Fitzgibbon:

“An election where we had our backsides kicked.

And we can't afford to give our political opponents the opportunity to blame us for a bad economy, an economy which has gone bad on their watch.”

PAUL:

He agreed in fact that the third stage of the government's $158 billion dollar tax cuts package should be decoupled, because it's very expensive at $95 billion dollars. And he said while spreading stage three out of the package should be our first objective. That is the Opposition's. He conceded that if the government refuses, Labor has only two choices: support the whole thing or support none of it.

Archival tape — Joel Fitzgibbon:

“Now the latter option would deny low to middle income earners much needed tax relief, tax relief we ourselves were promising during the election campaign”

Archival tape — Unidentified woman:

“Ok, so that…”

PAUL:

That very answer was a capitulation to the government.

ELIZABETH:

And what motivates the kind of freelancing that he exhibits in this interview on RN?

PAUL:

Well I think the shock election result is that is the key motivator. After six years of pretty good, in fact, excellent internal and external party discipline from the Labor Party, Joel Fitzgibbon and others say maybe we should all speak out a bit more we want more freedom so that there are checks and balances about policies and directions. In fact he said last week that Labor should move away from this paradigm, that a comment by a regional member or anyone else that is slightly different from the broader party view becomes front page story. Mmm that's good and it's very democratic, but it's also politically naive.

ELIZABETH:

But there's also sort of an element of survival here isn't there, because because Fitzgibbon didn't have a great result this election though he did maintain his seat.

PAUL:

That's right Elizabeth, look it's all about his survival his primary vote collapsed it's gone from a very safe seat to a marginal seat. One Nation in the Hunter in New South Wales recorded a primary vote of 22 per cent in his electorate. Look he does blame Labor's botched campaign. He says the attack on the top end of town, you know taking from the rich to give to the poor, had a fatal flaw. He says it failed to define who the rich are. Now, this is very interesting his coal miners he said on their 160,000 dollars a year with potentially a negatively geared house. We're entitled to ask themselves whether we were talking about them and he says the rest is history.

ELIZABETH:

And were these people part of how Labor defined the top end of town. What did Fitzgibbon say about this?

PAUL:

Well Fran Kelly In the interview didn't ask him to spell it out but the clear inference from his answer is that he doesn't believe his coal miners $168,000 a year are the top end of town. And that's probably because to get to that figure many of them would have to work long hours, overtime. The other reality too is that coal mining in the Hunter is underground, it's extremely dangerous, and as a result it does carry compensation by way of higher wages.

ELIZABETH:

But what's the, what's the consequence of classifying these people as not being rich. Because nonetheless one hundred and sixty eight thousand dollars a year is a huge salary.

PAUL:

Well this, this is another argument that's around because even Anthony Albanese says that he doesn't classify people earning $200,000 dollars as rich. Well that puts them in the the top two per cent of wage and salary earners. I think what it probably shows is that it's a bit of a dead end if you're going to be you know playing the rich off against the poor, it's better to talk about social justice and giving everybody a fair go. Distributive justice, if you like, try to lift people up and encourage their aspiration, this is what Labor's now talking about. This is what Jim Chalmers is on about.

ELIZABETH:

Do you think Labor's lost some perspective here or is this just a recalibration post-election that we should have seen coming?

PAUL:

I think it's gaining a perspective. I think it wrongly assumed that Australians were fed up with trickle down economics. Labor judged that that had had its day. Well it's clear from the election result that it hadn't and that they needed to be smarter in the way in which they wanted to redistribute income to have a more just society.

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ELIZABETH:

Back to Fitzgibbons’s view that the tax cuts have to be passed if they can’t be split, are there others inside Labor that share that opinion?

PAUL:

Look there certainly are and some of them both in the shadow cabinet and in the broader caucus have been talking off the record. But Peter Kalil, the right wing Labor member from Melbourne, he spoke out in a very similar vein to Joel Fitzgibbon a few days before, possibly even inspired Fitzgibbon to take the bat and run with it. Kalil says that we lost the election we should be passing the tax cuts package that was about the only thing that the electorate remembers that the government actually took to the election. But it does seem, and we know this from the result of the Shadow Cabinet discussions on Monday, that it's not a majority view, we've actually got a split shadow cabinet and a split Labor Party on the best way forward.

ELIZABETH:

We’ll be right back

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ELIZABETH:

So Paul, there’s this split now inside Labor: you’ve got some senior figures who are freelancing on these tax cuts. What's the official line from the opposition on the Coalition package?

PAUL:

Well this is quite interesting because there's no doubt the election was a watershed in more ways than one, particularly in terms of what Labor's policy positions now are. Everything's up for grabs. But on Monday after the shadow cabinet meeting, the leader Anthony Albanese, and the Treasury spokesman Jim Chalmers, came out and the shadow cabinet performed a policy somersault. Labor in the election was opposed to stage two of the tax cuts package but now they've said they accept stage two and more than that, it should be brought forward. Now stage two gives tax relief for those earning up to $120,000. The government wants it legislated now but on the Government's timetable it wouldn't come in until after the election.

And Chalmers, quite interestingly, said he knows what aspiration is all about. He came from a more depressed area of Brisbane. He had to struggle like everyone else in that area Logan City to make good, to get an education and to get on with life. He says that's what we should be about in Australia and the government should play its part.

ELIZABETH:

And what's happening elsewhere. Where are the Greens?

PAUL:

There was a suspicion in the Labor Party that the Greens might try to make heroes of themselves. Some of them remember that Bob Brown actually was a crucial vote that enabled the sale of Telstra, he traded off some environmental policy for that. So I thought it'd be a good idea to talk to Richard Di Natale, the leader of the Greens. He's utterly unimpressed with Labor's contortions. He told me there's not a chance in hell the Greens would support stage three of the tax package. He accuses Labor of being willing to betray 100 years of commitment to progressive taxation.

He describes the $95 billion dollar price tag and the flattening of the tax brackets to 30 per cent as utterly obscene. Di Natale says this aspect of the package is taking us down the American path. And he says Fitzgibbon and Labor are taking the wrong lessons out of the election.

ELIZABETH:

Does he nonetheless think that the cuts will go through or...?

PAUL:

Well look, I think he is a bit pessimistic. There's a couple of reasons for this. One is that Pauline Hanson for example is playing hard to get on stage 3, but nobody in the Parliament thinks that her two votes will in the end vote this package down. And then you've got of course Cory Bernardi who's going to vote for it.

But more to the point, midweek talking to Rex Patrick from Centre Alliance, he thought they were pretty close to a positive outcome. What he's wanting in writing is details from the government how they'll assure gas supply in Australia and what measures they'll put in place to keep a lid on gas prices that therefore would bring down energy prices, cause they fear, and Patrick’s said this a few times now, that what's the use of giving tax cuts if energy prices immediately gobble them up.

ELIZABETH:

Okay, so it looks like the Coalition will get that package through one way or the other, Di Natale seems to have formed that view. Has it then been a good week for the Coalition?

PAUL:

Well look you'd have to say that the Coalition would probably be happier this week than any of the others since the election. But what we're beginning to see is the season of what Paul Keating would call open heart surgery on the Liberal Party.

ELIZABETH:

Okay...

PAUL:

So we're beginning now to see the revelations the inside stories and the lies that went on behind the scenes over the Turnbull coup. This week, Sky News had its Bad blood/New blood documentary.

Archival tape — Unidentified man 1:

“He’s been given command and he’s taken command.”

Archival tape — Unidentified man 2:

“It was ferocious…”

Archival tape — Unidentified man 3:

“It was terrifying…”

[Crashing sound]

Archival tape — Unidentified man 4:

“I thought it was all over for the government.”

[Crashing sound]

PAUL:

It had two Liberals in the first night. They put on the record evidence that Morrison indeed had blood on his hands in that coup that toppled Malcolm Turnbull.

And Morrison denies it, he denies it in the documentary but there is no doubt his closest supporters not only marshalled numbers, they engineered a switch whereby five of them voted for the spill to get rid of Turnbull from the leadership and then they voted for Morrison in the runoff against Peter Dutton and Julie Bishop. One Liberal MP who was close to Malcolm Turnbull, but he says it defies belief that his colleagues Alex Hawke and Ben Morton, the numbers mean for Morrison, would have been working so assiduously if they weren't sure they had a candidate.

ELIZABETH:

In other words, this doesn't happen by accident.

PAUL:

Exactly. If it quacks like a duck, and waddles like a duck, it is duck.

ELIZABETH:

What does it tell us about Morrison, Paul?

PAUL:

Well what I think it says about Morrison is that we have here a very canny, shrewd and cunning politician, one that won the unwinnable election and he won it by applying all these traits. So I'd say it's a sure signal that he's not to be underestimated.

Now whether more tell-all books that are due out dent his credibility is an open question. And then of course down the track we'll have Turnbull's own account, A Bigger Picture. What we know is he has a trail of WhatsApp messages documenting what he sees as treachery. So all of this will put the focus on the Liberal Party. And I can tell you one of the lessons that Jim Chalmers spoke about at the National Press Club midweek, and what Anthony Albanese has let it be known it, is they're not going to let the liberals off the hook this time quite as easily as they did in the run up to the election.

ELIZABETH:

And what's the mood in Canberra before Parliament comes back to sit for the first time next week?

PAUL:

Well the mood in Canberra’s a bit expectation. You know like we still have a tight Parliament that the government only has a majority of one there still is the potential for people to miss votes. Also, we've got a new leader of the House in Christian Porter, because Christopher Pyne has retired. So it'll be interesting to see what the new dynamic will be. Of course we'll have a cock a hoop liberals and we'll have a reinvigorated and if you like, a confirmed rather than a reconfirmed prime minister in Scott Morrison, now there in his own right as the elected prime minister. And we'll see how of the new Labor leader Anthony Albanese measures up as the leader in the Parliament against Morrison. So plenty of expectation things will certainly be interesting and we should remember that Chinese adage, that you're condemned to live in interesting times.

ELIZABETH:

Thank you so much.

Paul:

It's always a pleasure talking to you, Elizabeth. Bye.

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ELIZABETH:

Elsewhere in the news:

It has been revealed that Malcolm Turnbull had intended to prevail on the governor-general, Peter Cosgrove, not to commission Peter Dutton as prime minister, had Dutton won the vote against his leadership. The Australian newspaper reports that Turnbull put this plan to the attorney-general, Christian Porter, who warned against it and said he would publicly rebuke Turnbull should the then prime minister ask Cosgrove to intervene in such a way.

And Alek Sigley, an Australian student who was living in North Korea and running tours there, has been arrested in Pyongyang. It is not clear why he has been detained or what charges he faces. Christian Porter said it was a “matter of the utmost seriousness”. Australia does not have an embassy in the North Korean dictatorship, and is relying on support from Swedish diplomats based in the country.

7am is produced by Emile Klein, Ruby Schwartz and Atticus Bastow with Michelle Macklem. Erik Jensen is our editor. Our theme music is by Ned Beckley and Josh Hogan of Equate Studio.

Also: have a look at our sister publications, The Monthly and The Saturday Paper. A new issue of the magazine is on stands Monday.

This is 7am. I’m Elizabeth Kulas. See you next week.

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