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DANIEL:

From Schwartz Media. I’m Daniel James, this is 7am.

After a week of turmoil - the Coalition has gotten the band back together, and Opposition Leader Sussan Ley has unveiled her shadow ministry.

The appointments lay bare how raw the Coalition’s wounds still are.

At the same time, pressure is mounting on the Albanese government. With growing calls from within Labor to take stronger action on Gaza including imposing sanctions on Israel. The prime minister has shifted his language - but it is yet to be seen whether it will lead to policy change.

Today, press gallery journalist and columnist for Inside Story, Karen Middleton, on the winners and losers in Coalition reshuffle – and where the battlelines in the next parliament will be drawn.

It’s Friday, May 30.

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Audio excerpt – Sussan Ley:

“Well, good afternoon. Today, David and I have reached an agreement formally to reform the Coalition, and we can announce our new Coalition shadow ministry.”

DANIEL:

Karen, after some internal chaos, the Liberals and Nationals have managed to reconvene, and opposition leader Sussan Ley has announced their shadow ministry. Can you take me through the new appointments?

KAREN:

Yes, well, not surprisingly, Ted O'Brien, her deputy has taken on the Treasury portfolio, the deputy leader traditionally gets to choose their portfolio and he has chosen that.

Audio excerpt – Sussan Ley:

“I'm really excited to work with my new economic team. Ted O'Brien as Shadow Treasurer and James Paterson in finance.”

KAREN:

That means Angus Taylor, who held that previously, is now in the defence portfolio. Michaelia Cash, bit of a surprise, getting Foreign Affairs. Alex Hawke, who is a numbers man for Sussan Ley, has been promoted into the industry innovation portfolio and Dan Tehan takes on energy and they've renamed the climate change portfolio as emissions reduction, energy and emissions reduction. So they're sending a little message about their intent in relation to climate change, I think.

Audio excerpt – Sussan Ley:

“Dan, working alongside our passionate and talented party room, and the Nationals, will lead our work to deliver a plan that gets emissions down but also delivers a reliable grid in energy for Australians. Australia does have to play its part in the global response to climate change, but not at any cost.”

KAREN:

Interestingly though, The Indigenous Affairs portfolio has gone to Kerrynne Liddle and she goes into the senior ranks of the shadow ministry. Jacinta Nampijinpa Price is effectively demoted. She no longer has that portfolio and she's moving to the outer ministry in the defence industry and personnel portfolio. And I guess among the most notable omissions is Jane Hume, the former shadow finance minister. Who was relegated to the backbench. A couple of other women also losing their positions, Claire Chandler and Sarah Henderson, but I guess Jane Hume is having the most attention.

DANIEL:

Yeah, so she's obviously the biggest casualty from the reshuffle.

Audio excerpt – Reporter:

“Jane Hume is not on the list at all, did she ask not to be on the front bench or has she just been relegated?”

Audio excerpt – Sussan Ley:

“While I don't reflect on private conversations, I will say this, that these are tough days.”

DANIEL:

What do you think was the motivation behind dumping her from the ministry and the cabinet?

KAREN:

Well, it's an interesting question, and I think it's sort of shocked and surprised a number of people. There was some thinking that perhaps she might be demoted, but not necessarily dumped from the whole shadow ministry onto the backbench.

She was, of course, responsible for the working from home policy, which turned out to be a political disaster for the Coalition during the election campaign.

Audio excerpt – Jane Hume:

“It will be an expectation of a Dutton Liberal Government that all members of the Australian Public Service work from the office five days a week.”

KAREN:

She also made some unfortunate comments, alleging that Chinese spies were involved in campaigning for other parties.

Audio excerpt – Jane Hume:

“You don't need to go out that far on the polling booths, Clare. There might be Chinese spies that are handing out for you, but for us there's dozens, thousands, hundreds of young people.”

KAREN:

That didn't go terribly well, particularly in seats with high proportions of Chinese Australian voters. So it looks like punishment and she's also seen to not be a strong supporter of Sussan Ley. So a touch of maybe personal politics there as well.

And there is a bit of a flavour of that in here. We're seeing some, particularly women, who are seen to be more conservative as not getting a guernsey in this lineup. And so Sussan Ley is being seen to reward factional allies and perhaps isolate some who were not so much.

Audio excerpt – Sussan Ley:

“Look, 40 per cent of my shadow ministry is made up of women, and across our party room or broader bridge, I always want to see more women.”

Audio excerpt – Reporter:

“Not as many under the former leader.”

Audio excerpt – Sussan Ley:

“The party is led by a woman. And can I say, when we make the calls that we need to, I will be at the table for every single one of those big calls.”

KAREN:

And of course, on the demotion and ostracisation front, on the national side, we're seeing Barnaby Joyce and Michael McCormack and Matt Canavan all relegated to the back bench. The selections from the National's side were made by David Littleproud. And of course. Certainly McCormack and Joyce have been very critical of the way David Littleproud's been handling things in the last couple of weeks.

DANIEL:

Given all the machinations and the toing and froing between the Nationals and the Liberals, is there any question about David Littleproud's future as party leader after the way these negotiations were handled?

KAREN:

I reckon there might be, maybe not immediately, but the tone and the content of the commentary from some of the Nationals in the last few days would suggest that they are suggesting that they're kind of putting him on notice.

He is arguing that he's had success, that what he wanted to do in walking out of the Coalition and leading the party away. Was to force the Liberals to accede to some of the Nationals demands. He reckons he's done that.

Audio excerpt – David Littleproud:

“We stared the Liberal Party down, and we didn't blink. We made it very clear that if they wanted to re-sign the Coalition with us, there were four policy principles. We couldn't just let slide by. We needed a guarantee.”

KAREN:

He talked about nuclear power. Well, that has actually been negotiated down a little. It's no longer the policy that went to the election. It is now just removing the moratorium on nuclear power, but also this $20 billion regional fund, the divestment powers for supermarkets. And better mobile coverage in the bush. All of those things in principle have now been agreed to by the Liberals. So David Littleproud is claiming that as a success and a victory.

But a number of his colleagues are still pretty unhappy. We've seen Barnaby Joyce criticise him publicly.

Audio excerpt – Barnaby Joyce:

“You can think of all these really clever lines you're gonna say on this. They'll ask me this and I'll say that. There is no clever line about this. It was a complete shocker.”

KAREN:

So it is not a happy camp entirely and there's been a lot of talk about the potential for replacing him with Michael McCormack and Michael McCormack is playing along with all of that, saying, oh, look, I've got no plans to challenge him anytime soon. Well, we all know what that sort of caveat means. So I'd say David Littleproud of me looking over his shoulder for a while.

DANIEL:

After the break - what the coalition would rather be talking about.

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DANIEL:

Karen, the opposition must be loathed to be talking about themselves now, but one thing they are keen to talk about are the changes to superannuation that the government has announced with the proposed increase to the tax rate on super balances over $3 million. It's something the government took to the election, so where is that proposal at?

KAREN:

Well, it's interesting. I think the opposition are seizing on this as a point of combat with the government and something that they've had some success on in terms of prosecuting arguments against the Labor Party in the past. If we go back, back to that 2019 election where Labor was talking about making changes to franking credits to the way that retiree shareholdings were treated. The Coalition ran a very successful political campaign and that was led by Tim Wilson, who lost his seat but is now back in the parliament. And I think he will be itching to prosecute those kinds of arguments again.

From the Labor government side, they argue that this affects a very small number of people. It only affects superannuation balances that are above three million, doubling the tax from 15 to 30 per cent. But it's the aspect of it that's about unrealised capital gains. So gains on paper from within super funds that has got people worried. And I think there's plenty of room there for the Coalition to raise concerns and doubts. And try to muddy the waters as they did back in 2019. They ended up successfully convincing some people that it was a bit like a death tax back then. Now I think they really will be pushing this hard.

And the government is yet, as I say, to legislate. That'll be one of its top priorities when the parliament resumes in late July. So there'll be a bit of negotiating to do. They've got the Greens in the Senate now in a balance of power position and the Greens favour this change, although they'd like the government to go further. But I think you will see a lot of politicking, if only for the fact that it is something that the opposition can sink its teeth into to really start putting pressure on the government in office.

DANIEL:

Karen, we've spoken about the internal tensions within the Coalition. The government itself is having somewhat of a, maybe a public, also internal debate over its position on Gaza. In a recent doorstop, Anthony Albanese criticised his role for withholding humanitarian aid using the strongest language we've heard from him on this topic.

Audio excerpt – Anthony Albanese:

“People are starving and the idea that a democratic state withholds supply is an outrage.”

DANIEL:

What do you make of his comments and what do you think has changed?

KAREN:

Yeah, it was interesting, Daniel. It was a press conference at the beginning of the week, and the prime minister was asked about the withholding of aid from Gaza and the risk of starvation and famine there. And it was noticeably stronger rhetoric and much noticeably strong response, and it's had a lot of attention since then.

Audio excerpt – Anthony Albanese:

“Australia finds these actions are completely unacceptable and we find Israel's excuses and explanations completely untenable and without credibility.”

KAREN:

You'd have to say that some of it is to do with the strength of his position as a re-elected prime minister, the overwhelming electoral result that he achieved is obviously giving him confidence to assert positions more forcefully. Australia didn't sign up to the statement that was put out by the UK, France and Canada recently. And his answer to that was they were G7 countries. You know, we're in the G20. But there will be, I think, increasing pressure from constituents of the Labor side to be more forceful and clearly the prime minister's indicated that he's willing to at least rhetorically speak out more directly against Israel's role in the conflict. We've got a conference upcoming in New York that will deal with issues around Gaza. It will be interesting to see what Australia as a government says and does at that conference, but there's certainly now increased pressure on the government to even go as far as recognising a Palestinian state, there will obviously be debate about whether that should come after the return of the hostages etc. There's going to be debate about that timeline, but certainly that is a shift in the aggression that the government is taking and the willingness to assert itself in this conflict. We'll see just how far it goes in terms of action.

DANIEL:

And of course, former Labor front bencher, Ed Husic, is out in the media saying the government should be doing more to pressure Israel. And that seems to be now followed through with ALP rank and file members who are debating motions calling for sanctions on Israel. Do you think there'll be movement on that front?

KAREN:

Ed Husic has always been speaking out when he was a minister, he was speaking out too.

Audio excerpt – Ed Husic:

“No food, fuel, medicines, water. And it's no surprise that there are some saying that this is the collective punishment being extended to Palestinians.”

KAREN:

In some ways, I feel like the tone of his contributions has changed a little. He's been obviously dumped from the ministry and he's very upset about that. But on this, it was a thoughtful contribution. It was well argued and you get the feeling that he, rather than being a sort of an irritant as such, he's trying to be a constructive advocate from outside the ministry.

Audio excerpt – Ed Husic:

“One, I think what the prime minister did yesterday was critically important. I think it was vital that he speak up with the strength that he did to call out the fact that the withholding of aid is completely unacceptable. Two, I think the second thing that needs to actively occur is that we do consider those targeted sanctions so that we can work with our friends in the international community should the Netanyahu government fail to acknowledge. Broader global sentiment about this.”

KAREN:

So we'll see how far he's willing to go in terms of the political role he is playing between those broader constituents who are really wanting action-like sanctions and his colleagues in the executive government who are treading or have historically been treading carefully.

DANIEL:

And finally, Karen, there's no pressure like pressure from a Labor elder, and former Foreign Minister Gareth Evans has also come out and weighed into this. How do you think the government's going to respond to that sort of pressure as well?

KAREN:

You know, ex foreign ministers, ex prime ministers weighing in sometimes is not entirely welcomed. Incumbent governments often take a dim view of getting advice from the sidelines from people who've gone before and certainly it's quite a while since Gareth Evans was foreign minister, but he is a respected figure in the international community. And It's interesting that he is choosing to engage and give advice to the government on going a bit further in its actions in relation to the role of Israel. His view will be taken seriously, I think.

We've obviously seen a lot of division in the community in the last year and a half to two years and the prime minister and his colleagues will be weighing all of that up as they decide what their position should be, but they certainly are in a stronger position electorally and that may well embolden them to take a little more action than they have in the past.

DANIEL:

Karen, thank you so much for your time. It's been great speaking with you.

KAREN:

Thanks for having me, Daniel.

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DANIEL:

Also in the news today…

Trade Minister Don Farrell says the Australian government will keep pushing for the United States to dump tariffs on Australian goods entirely.

The comments come after a US court blocked President Trump’s so-called liberation day tariffs from coming into effect.

And

A United Nations aid warehouse in Gaza has been broken into by hungry Palestinians.

The UN says two people have died and more have been injured in the incident at the warehouse in central Gaza, and is continuing its calls for an immediate scale-up of aid allowed into Gaza by Israel.

7am is a daily show from Schwartz Media and The Saturday Paper.

It’s made by Atticus Bastow, Cheyne Anderson, Chris Dengate, Erik Jensen, Ruby Jones, Sarah McVeigh, Travis Evans and Zoltan Fecso and me, Daniel James

Our theme music is by Ned Beckley and Josh Hogan of Envelope Audio.

That's all from 7am for this week. We'll be back on Monday.

Have a great weekend.

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