LIBERAL PARTY CHANGES RULES ON CHALLENGING SITTING LEADERS

Prime Minister (PM) Scott Morrison has secured agreement from his party room to amend internal Liberal Party rules around challenging a sitting leader. The new arrangements will require a two-thirds majority of the parliamentary Liberal Party to remove a PM which has lead the party to an election victory. This compares to the simple majority which was necessary for the challenge against former PM Malcolm Turnbull which resulted in Mr Morrison becoming leader. The new rules are similar to those the Opposition implemented in 2013, requiring a 75 per cent majority to remove a sitting PM and 60 per cent to remove a leader in opposition. Liberal Party processes have been under heightened scrutiny recently, as the New South Wales State Executive intervened in a preselection contest to protect all sitting members, including conservative Member of Parliament Craig Kelly.

FINAL WEEK OF PARLIAMENT ENDS IN DISFUNCTION

In the last sitting day of Parliament, the Government was forced delay confirmation of its encryption bill, as the Opposition and the crossbench threatened a de-facto vote of no confidence. The Government was aiming to pass laws enabling law enforcement to bypass encryption of electronic communications before Parliament concluded for the year. Prime Minister Scott Morrison dismissed concerns the laws would create systemic vulnerabilities in private communications, instead urging an accelerated committee review process and rejecting Opposition amendments. Meanwhile, independent member Kerryn Phelps and the Opposition proposed separate medical evacuation bills to remove children from refugee detention centres on Nauru, which the Government argued would undermine Australia’s border security system. While Dr Phelps’ bill failed to get up, the Opposition’s bill was passed in the Senate and looked likely to pass in the House of Representatives with the support of the crossbench. Had this occurred it would have raised serious questions about the legitimacy of the Government as no other government has seen a bill it does not support passed in the lower house since 1929. To avoid this Mr Morrison decided against extending the session in the House of Representatives. As such, while the Opposition agreed to pass the encryption legislation in the Senate without amendments, confirmation of the laws in the House will now need to wait until Parliament resumes on 12 February.

OTHER POLITICAL NEWS

Analysis of latest poll results
The most recent Guardian Essential poll shows the Opposition leading the Government 54 to 46 in two party preferred terms. This is a stronger performance for the Opposition than the last Guardian Essential poll, which showed the Government only two percentage points behind. Given this latest poll is more in line with Newspoll’s consistent November result of 55 to 45, it would appear the previous Guardian Essential poll is an outlier.

Prime Minister returns from G20
Mr Morrison attended the G20 Summit in Buenos Aires last week, where he held his first bilateral meetings with US President Donald, UK Prime Minister Theresa May, French President Emmanuel Macron and others. Media attention was focussed on the lack of familiarity between Mr Morrison and other world leaders, having to explain his recent elevation to Prime Minister. Public commentary explored how the frequent leadership changes in Australian politics have negatively affected international relationships, as meetings like these are spent establishing relationships, thereby losing the opportunity to more vigorously advance Australia’s interests.   

NSW plans high speed rail investment

New South Wales (NSW) Premier Gladys Berejiklian has announced a plan for a high-speed rail network if her Government is re-elected in March next year. This demonstrates the NSW Government’s intention to campaign on infrastructure investments at the state election, an approach which proved successful for Victorian Premier Daniel Andrews last month. The NSW Opposition has already committed to a high-speed rail link between Sydney and Canberra, but the Berejiklian Government’s proposal also includes links to several regional NSW cities. Ms Berejiklian’s proposal does not include a requirement for federal funding, but this issue will likely be raised at the national level ahead of the next election given existing joint investment commitments for both parties. High speed rail has been proposed by multiple federal and state governments in Australia since the early 1980s, with limited success. 

ECONOMIC GROWTH AT ITS SLOWEST IN TWO YEARS

Australian GDP growth has slowed considerably in the last quarter, growing 0.3 per cent from July to September, the smallest quarterly increase since 2016. This means annual growth to September is now at 2.8 per cent, significantly lower than the 3.3 per cent level anticipated by the market. The main factors limiting growth were restrained consumer spending due to slow wage growth and falling investment in the mining sector, which has declined by 13.6 per cent over the year. If this pattern continues over the next quarter, it will have serious implications for the 2019 federal election. The economy is a major issue in all Australian elections, but Prime Minister Scott Morrison has placed economic growth at the centre of his agenda. His decision to plan an early Budget indicates his intention to campaign on his fiscal management credentials, but this message could be undermined if his ascension to leader in August coincides with a period of economic underperformance.

OTHER ECONOMIC NEWS

Former Minister to lead industry superannuation sector body

Former Labor Minister Greg Combet has been appointed Chairman of Industry Super Australia, the peak body for managing the retirement savings of over 5 million workers across certain industries. Australia’s longstanding compulsory pensions system has built an industry that is now the major investor in the broader economy and, as such, the management of superannuation industry bodies are highly influential. Mr Combet was responsible for industrial policy as Minister for Industry and Innovation in the Gillard Government and was previously Secretary of the Australian Council of Trade Unions. The conduct of industry superannuation providers was recently examined in the financial services Royal Commission, but the findings were largely positive.