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DANIEL:

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

Yesterday the Coalition was dead. Today, it’s back on life support.

After a dramatic split, the Liberals and Nationals are suddenly back at the table - trying to patch things up after a break-up neither side seemed to plan for.

Now, all eyes are on Sussan Ley. The decisions she makes in the next few days will shape not just her leadership, but the future of the party itself.

Today, chief political correspondent for The Saturday Paper, Karen Barlow on why the Coalition are back talking again - and whether they can ever really trust each other moving forward.

It’s Friday, May 23.

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DANIEL:

Karen, after the standoff earlier this week, we've now seen both leaders head back to the table. What’s shifted in the last 24 hours to make reconciliation suddenly plausible?

KAREN:

Yeah, there's a sense of will politics slow down here at Parliament House. What's shifted is there's been a very important concession from David Littleproud. There was much toing and froing over whether he demanded cabinet solidarity being broken up by the Nationals and that there would be the possibility of a free vote for the Nationals if they were still in the Coalition so they could speak freely on issues important to them, which would be separate to the Liberals.

Now, initially, Sussan Ley said that that had been discussed. David Littleproud said it hadn't been. And then there was this toing and froing on live TV on 7:30 ABC where Ley's office interjected by a text message and said, well, it actually had been, So that sounds messy, but really, cabinet solidarity is an absolute essential point for the Coalition. They have to be together. I've been told that no other leader had that asked of them before. Tony Abbott, John Howard, Malcolm Turnbull, Scott Morrison, nobody had been asked that but Sussan Ley. Sussan Ley said no because it's not done. And Littleproud, it took another day for Littleproud to come out in a doorstop interview at Parliament House to say actually yes, I did ask for it. I do understand it was an impossible ask for Sussan Ley. And I immediately backed down.

Audio excerpt – David Littleproud:

“She made it very clear that the cabinet solidarity that we’ve had and the processes around that will remain. That’s why it wasn’t up for debate. I thought it was fair and reasonable what Sussan Ley put back in writing.”

KAREN:

So that's where we're at. They basically had a disagreement over something really important to the Coalition. And now we're free to potentially talk about whether the Coalition should still exist.

DANIEL:

And so both leaders met yesterday to talk through it a little bit more. How much do we know about the path ahead for Sussan Ley and David Littleproud?

KAREN:

Well, for David Littleproud, the four sticking points that he has demanded on behalf of the party room still exist. And he's still firm on that. And that is for nuclear power, the $20 billion regional future fund, universal phone service, and divestiture powers to break up the big supermarkets. That's still important to David Little Proud. He's standing firm.

Audio excerpt – David Littleproud:

“But these four policy areas are important to the lives and the livelihoods of people that I represent. And the fact that the Liberal Party Room is now prepared to have that conversation, I think speaks volumes, about the fact we should allow that to happen.”

KAREN:

The issue for Sussan Ley, she has now agreed to take those four positions to her party room and see if they're acceptable or not. So that will be a process. We don't know how long it will take. It could be days, it could be weeks, but certainly you would understand that it would be before Parliament returns, which has just been announced as being July 22.

DANIEL:

So Sussan Ley has addressed those four sticking points and agreed to take them to her party room. Does that concession signal real movement?

KAREN:

Considering we were talking about the end of the Coalition and it being a historic moment, yes, there is real movement, but it doesn't mean that the party room will take them on. It's entirely likely that many of them will. So the Universal Phone Service Agreement, highly likely. The $20 billion regional future fund, highly likely as well, I think the real sticking point will be nuclear power.

There is a thought inside the Liberal Party that it was a drag on its particular vote and a big explainer for the May 3 election loss and how devastating it was. So they really do want to have a good hard think about that. So we're not sure really how it's gonna go forward, but that's what the Nationals want. And the Liberal Party at this point has said, well, we'll have a chat about it before parliament resumes.

DANIEL:

Does the fact the talks resume say quickly tell you that both parties must've been worried about how destructive a breakup would be?

KAREN:

Oh, certainly there was a lot of talk inside and outside the two parties about how destructive this rift, this absolute fissure of the Coalition would be going forward. There were individuals, quite senior people, such as Darren Chester, Barnaby Joyce, and the former Deputy Prime Minister Michael McCormack. They were urging inside the party and talking to journalists at the same time, saying, we want this ending sooner rather than later.

There was some talk that, you know, for the Liberals, there was the silver lining and perhaps being unshackled from the National Party would help them reach out to the people that had felt abandoned by the Liberal Party.

But I spoke to a senior Liberal and he told me that this was an act of mutually assured destruction and would harm both the Nationals and the Liberal Party. He was talking about, you know, as you lead up to the next election due in 2028, if there were three quartered contests with both the Nationals and Liberal Party running candidates up against, say, teal type climate 200 candidates, there would be problems on both sides because they would be drags on the votes for each other. It would also be a problem, he said, for the likes of Bridget McKenzie and Senator Ross Cadell. Their Senate careers, I was told, would be over because there would be no joint Senate tickets, so they would actually then be further down and likely lose their positions. And then you've got the case of the Nationals where they will be, with the decision of coming out of the Coalition, foregoing extra staffing, extra pay, the prominence of being the official opposition.

There was a lot at stake in this, and we still haven't had it resolved, but I was told that as you get closer to the election, this is really something for the Liberal Party to consider because it's not just good for them because they would be seen forever as being tied to the Coalition. They can't form government without the National Party in that Coalition drawing their numbers towards what they need as a majority in the House of Representatives. And that people would be forever thinking, what is the National Party going to do to affect what the Liberal Party will stand for in Parliament?

DANIEL:

Coming up after the break - The choice Sussan Ley has to make.

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DANIEL:

Sussan Ley has been praised for showing leadership but not being held to ransom by the Nationals, but now she's suddenly willing to negotiate. So what does that say about her first test as leader?

KAREN:

Well, certainly she had two options. She could have given in to the Nationals, or she could have stood up for the Liberal Party, and she chose to stand up for her party. So certainly she's getting kudos from Liberal MPs for being that sort of leader. There is a question over whether the National Party would have. Pulled this on Angus Taylor should he have been elected by the Liberal Party Room as leader and David Littleproud assured everyone that certainly that would have been the case that they as the Nationals had this principle position and they were going to stand and stand up for the people that voted them in but you know we are seeing this muscled up National Party, they're doing something that they haven't done before after an election. They've actually decided to break free and ask for more. So certainly they're emboldened by how they held their ground electorally and didn't really lose seats except for a Senate position in the loss of the deputy leader, Perin Davey.

So you could argue whether they've actually misread the mood regardless because there's that question over whether they were a drag on the Liberal Party and therefore a drag on the entire Coalition.

DANIEL:

So I was looking at one point as though Liberals would be alone as the opposition, meaning they'd get the plum jobs, the better money and more questions in Parliament. If they do get back together, will that still be the case?

KAREN:

Yeah, I guess if they sort it out and they are a Coalition again and they've agreed to cabinet solidarity and they will speak as one voice on policies, then they go back to as normal, normal as it can be as the Coalition is vastly reduced in numbers in the House of Representatives. And we've got the Labor Party, which is going to return to parliament with this super majority, likely to be 94. Certainly, as we hear the parliamentary return day is July 22, certainly all eyes will be on how they will perform in Parliament against and emboldened Anthony Albanese.

DANIEL:

So as you just said, Karen, Parliament does return on July the 22nd. So stepping it out, what's the window here for Ley and Littleproud to strike a fresh Coalition deal?

KAREN:

Well, we don't know. It could be days, it could be weeks. Certainly, they would have to do it before Parliament returns. They do want their front bench. That's all on pause. And I think the advice they've had from party elders, including John Howard, is that the longer you put this off, the harder it is to return to a combined united front bench for the Coalition. So all eyes will be on them to sort this out pretty soon.

DANIEL:

Is Sussan Ley’s choice ultimately between having a coalition and the strength of that or having the freedom to modernise and win back urban voters?

KAREN:

I think she does need to do both. She needs to modernise the Liberal Party. I wouldn't be surprised to see new branding as the new Liberals, as the new Labour emerged in the United Kingdom not so long ago. There is also this need to be the Coalition. They just cannot form government. They cannot be this bigger force. Without combining with the Nationals. And it will be interesting to see who she does put on her front bench. Certainly there's talk that Ted O'Brien, the deputy leader of the Liberal Party, will probably take Shadow Treasurer and leave an open question as to where she'll put the likes of Angus Taylor and Jacinta Nampijinpa Price. Got to remember that the defection of Jacinta Nampijinpa Price really upset the Nationals and may have had something to do with how they've behaved over the past week in actually, pulling this extraordinary act of causing this rift to the Coalition.

DANIEL:

And do you think there's going to be trust issues moving forward?

KAREN:

I think in the background, there's always trust issues, but there are pains to tell us it's a trusted relationship. Up until this point, it had survived, apart from a couple of circumstances, the last in 1987, for 80 years. This is something that they know they need each other. But never forget that within political parties, within things like the Coalition, there are probably more enemies than those on the other side. So yeah, you never know, but trust is an issue in politics, isn't it?

DANIEL:

It certainly is, Karen. Thank you so much for being on top of all of this.

KAREN:

No worries, thank you.

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DANIEL:

Also in the news today…

Two people have been found dead and there are grave fears about three people missing in floodwaters in New South Wales.

The New South Wales Premier Chris Minns said the state is bracing for more bad news over the next 24 hours.

There are flood warnings in several parts of the state. The federal government has activated disaster recovery allowances for some of the most affected communities, including Kempsey, Port Macquarie and Dungog.

AND

Two Israeli embassy staff have been shot dead outside the Capital Jewish Museum in Washington DC.

Police have arrested a suspect, who reportedly shouted pro-Palestenian slogans while in custody. Authorities are treating the shooting as a possible hate crime.

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, Zoltan Fecso – and me, Daniel James.

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

Thanks for listening. See you next week.

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