‘GOOD MORNING! A welcoming committee!’ The TV camera rolled as the Malcolm Turnbull buzzed open his security gate for an early morning walk with Lucy on Saturday, 7 February 2015. ‘Sir, can you confirm whether you’ll throw your hat in the ring if a leadership spill gets up?’ In shorts and joggers, Turnbull tried three polite but forceful variations of ‘go away’ before realising the crew would trail him all the way down the street if necessary, at which he stopped and gave an impromptu seven-minute interview on the footpath, making the reporter’s day.
A little bleary at 6 am, but warming to his task, Turnbull’s message was designed to put pressure on prime minister Abbott and, translated, went roughly like this: Tony Abbott must allow a secret ballot at the coming spill meeting, rather than a show of hands, and it must be held on Tuesday, to give me to time to suss out the numbers. Turnbull knew he wasn’t there yet; his closest supporters were telling him: ‘It’s too soon. Stay your hand.’
Abbott knew this and very quickly brought the spill meeting forward, to the Monday. He was reeling from the fallout of his ‘captain’s call’ to knight Prince Philip. There had been a groundswell building against the PM since before Christmas, when government MPs went home to their electorates and proceeded to cop it all summer—about the Budget, the broken promises, the leader with the tin ear. Then, in one fell swoop, on Australia Day, the PM became a laughing stock. Even conservative commentator Andrew Bolt called the knighthood a ‘pathetically stupid’ decision which ‘could be fatal’ for the PM.1 Apart from anything else it was a colossal example of Abbott’s failure to consult. Not even his chief of staff, Peta Credlin—blamed for so much else—could be blamed for this one: she had no idea it was coming. The defeat of one-term Queensland premier Campbell Newman days later, and a flubbed address at the National Press Club—lecturing his party colleagues with the false observation that ‘it is the people that hire and frankly it’s the people that should fire’2—added size and power to the dangerous wave of anger Abbott was facing. He was paddling for his political life.
The anti-Abbott feeling on the backbench was not pro-Turnbull, yet. The MPs moving for a leadership spill in February—backbenchers Luke Simpkins and Don Randall, backed by the outspoken Dennis Jensen—were hard-liners from WA. Meeting Julie Bishop at a fundraiser for the NSW Liberals the day after his doorstop in Sydney, Turnbull trod carefully. Trailed by media, almost begging him to declare, Turnbull showed uncharacteristic patience, noting as if it was of mere passing interest that a leadership process was underway and it was open to anyone to stand without accusation of disloyalty. He was close to the prime ministership, so close he could taste it, but for once in his life he did not roll the dice. What gunpowder he had—not much!—was kept dry. Commentators purred approval.
In Canberra the next morning, the Liberal Party gathered at Parliament House at 9 am. Abbott’s office was backgrounding journos that there was clear support for the government, and no more than thirty MPs would vote for a spill of leadership positions. When the ballot papers were counted, Abbott was shocked: thirty-nine of his colleagues had voted for a spill even without a candidate, effectively voting for an empty chair. Abbott asked his party colleagues for six months to turn things around, declaring ‘good government starts today’.
Turnbull was now on a razor’s edge. He faced the exquisite challenge of toppling a first-term prime minister for the first time in the party’s history, while keeping his Cabinet post and without getting blood on his hands. Turnbull wanted an almost-irreproachable coup—surgically clean, hailed a success. Operation Remove Tony had begun; it was drawn out and delicate.
Two shining beacons showed Turnbull what not to do. He must not be another Peter Costello: decent, loyal, universally acknowledged as PM-in-waiting, hoping power would arrive on a plate, going home hungry. Turnbull did not have the time, nor the party standing, to play the former treasurer’s waiting game. Yet he must not be another Julia Gillard who, with dumb urgers like Paul Howes and Mark Arbib, made a botched execution in haste; first-term PM Kevin Rudd not killed but fighting on, still bleeding; the public in horror.
Keating v Hawke was no template either. While Keating famously said he had only one shot in the locker—but turned out to have another up his sleeve—Turnbull could not mount a second challenge. It was all or nothing; he would be PM or he would quit politics. Worse, unlike either Keating or Gillard, Turnbull had been tested as leader and fallen short.
Turnbull had to rely on Abbott’s ability to kick spectacular own-goals, but after February’s near-death experience, he was playing it safe. Controversial chief of staff Credlin took a back seat. With its small-business tax giveaways, the May Budget was well received. Perhaps Turnbull’s moment had really come and gone. Except, ominously for Abbott, the polls would not lift: the first Newspoll after the budget showed the government trailing 53–47, two-party preferred.
At the end of May, Fairfax journalist Peter Hartcher gave a detailed, blow-by-blow account of a Cabinet meeting at which six ministers challenged a proposal by immigration minister Peter Dutton to strip sole Australian citizens of their citizenship—rendering them stateless—if the minister decided, at his discretion that they were suspected of involvement in terrorism-related offences. The rule of law had gone out the window. ‘This is an extraordinary proposition,’ Turnbull insisted, and was followed by Nationals’ deputy Barnaby Joyce, attorney-general George Brandis and education minister Christopher Pyne. Abbott backed Dutton strongly, but during the debate someone mentioned a discussion paper on the proposal. ‘I haven’t seen a discussion paper,’ said Julie Bishop, one of the few ministers succeeding in their portfolios, and a member of the National Security Committee of Cabinet responsible for everything terrorism-related. ‘Here we go again,’ Turnbull said, ‘something as momentous as this and nothing before us.’ Turnbull asked whether The Daily Telegraph, favoured receptacle for leaks from the prime minister’s office, had been briefed. Abbott promised it had not, but the paper did have a story on the policy next day. Given that the Cabinet meeting had started at 7 pm, there was no way it could have been dropped to the Tele afterwards. Cabinet had been ambushed, treated as a rubber stamp, and misled. Not only did the Hartcher story expose a cabinet divided, it showed that Abbott had not learned the lessons of the February spill. Power was still concentrated in his office. Consultation was a farce. Who leaked from Cabinet? Turnbull denied it, as did the rest. Brandis, Pyne and Bishop would all back Turnbull when the spill came.
The rot set in when, in mid-July, the Herald Sun revealed that speaker Bronwyn Bishop had chartered a $5227 taxpayer-funded helicopter ride from Melbourne to Geelong, and it quickly emerged she was there for a Liberal Party fundraiser.3 It was a flagrant abuse of her parliamentary entitlements, but Abbott stuck by his speaker for three long weeks, and the meagre post-Budget bounce in the polls evaporated. #choppergate caused a social media avalanche and every politician in the country had their claims picked over amid lurid stories about travel rorts. Turnbull, cheeky, pulled a favourite trick and tweeted a selfie from the train platform at Geelong, ticket from Melbourne $12, standing next to local member Sarah Henderson. She wound up voting for him. Finally Abbott dumped Bronny, as she is almost universally known, from the speaker’s chair. Abbott and Bishop had been fellow-travellers in neighbouring northern beaches seats for more than twenty years. Her name would also soon find its way into the voting-for-Turnbull column—amazing, given their history. In the middle of the whole furore, West Australian Liberal backbencher Don Randall died suddenly of a heart attack, triggering a September by-election in the safe seat of Canning on the outskirts of Perth. A test was looming for the Abbott government.
Parliament returned from the winter break with expectations high that a cross-party deal might be done on marriage equality, particularly after the Irish voted to allow same-sex marriage in a May referendum and the US Supreme Court ruled in June that the country’s constitution gave same-sex couples the right to marry in all states. Momentum was swinging behind reform, Canberra airport was lit up like a rainbow to welcome MPs back, and on the resumption of parliament Queensland Liberal Warren Entsch was all set to move a private member’s bill, supported by Labor’s Terri Butler, to make same-sex marriage legal in Australia. Turnbull, who supported marriage equality but did not want to appear too radical lest he scare off the right, again trod carefully, concentrating on the importance of a free vote for Coalition MPs, in the tradition of Menzies (on banning the Communist Party) and Howard (on the republic).
Stirred by the conservative base, which opposed a free vote, Abbott sprang a spontaneous party room meeting on November—including the National Party, unusually—which ran for six hours and, in a reprise of the marathon 2009 meeting on the Carbon Pollution Reduction Scheme, felt as though the leader might be rolled, the party might split … anything could happen. Those who attended said the meeting was well handled: Abbott was engaged, nobody was in and out of the room, and everyone got a say. Some thirty-three MPs spoke in favour of marriage equality, including Turnbull, who argued that leaflets handed out in his seat of Wentworth ahead of the 2013 election had made promises, in line with the party policy, that if the issue came up, the Liberals would support a free vote. To keep faith with his electorate, he felt bound to honour that pledge.
The meeting dragged on past 9 pm, and it was nearly midnight when Abbott held a press conference to announce the party’s ‘disposition’ was to have a popular vote on the issue in the next term.4 Disposition? It was a delaying tactic pure and simple, a fudge to placate the hard-liners, resolving nothing. There was seething resentment among small-L liberals about the debate being hijacked and questioning the involvement of the National Party in the meeting—outraging Christopher Pyne. Next day Turnbull did a spontaneous ninety-second interview—crystal clear—supporting a free vote, mainly on the grounds that it would resolve the issue sooner, one way or the other, and let the government get back to talking about jobs and the economy. A plebiscite would make gay marriage ‘a live issue all the way up to the next election and, indeed, at the next election and, if we are returned to office, it will be a very live issue in the lead-up to the plebiscite itself’.5 When the Entsch–Butler bill came up for debate, Abbott’s office drummed up a competing announcement and the whole frontbench was absent from the chamber, except Turnbull and Pyne, who sat respectfully and listened to the moving speeches. Pyne would be a heavyweight Turnbull backer when the spill came, and he brought key South Australian votes with him.
In early August it emerged that Dyson Heydon, heading up the Royal Commission into Trade Union Governance and Corruption, had accepted an invitation to speak at a Liberal Party fundraiser, calling his impartiality into question. Given that the commission was a highly political exercise—opposition leader Bill Shorten had been cross-examined, and Heydon had questioned his credibility as a witness—Labor went hard in Question Time. As the two sides laid into each other, pointing and roaring, Turnbull sat at his frontbench pew, quietly typing on his iPad, oblivious to the partisan antics, a picture of grown-up government, all by himself. The same week, somebody leaked the Cabinet papers to Channel Seven news: it was one short page; there were no policy submissions.6 Abbott’s agenda was so threadbare, the government had nothing to do.7
There is no doubt Turnbull was treading a fine line, constantly setting himself apart from Abbott, looking like a challenger, without ever challenging. Success was not assured. Was he leaking against Abbott? Turnbull has always leaked—Costello noticed it under Howard; Nelson would watch him walk brazenly in and out of shadow cabinet, five or six times a meeting, and was convinced he was giving updates to journalists. Turnbull is, after all, as Lucy has said, the ‘soul of indiscretion’.8 Yet apart from a dinner with Clive Palmer, Turnbull had been remarkably disciplined under Abbott, both in opposition and for the first year and a half of the government. Discipline was breaking down everywhere now, and if Turnbull was leaking he was certainly not the only minister doing so.
The polls ground down. In early August, Newspoll had Labor leading the Coalition 54–46, two-party preferred. Abbott had always said he could make up a four-point gap in an election campaign against Bill Shorten, but by putting a number out there, he created a rod for his own back: the corollary of his statement was that a larger gap could be unbridgeable and in late August, even after the Coalition’s primary vote jumped a point, the two-party preferred measure vote was stuck rigidly at 54–46, an eight-point deficit in Labor’s favour. For government MPs, frontbench or backbench, there was no solace anywhere: in the polls, in the media, in the community. Unemployment loomed for any MP with a marginal seat. It was ‘hell on wheels’, as one party elder said. Turnbull told colleagues Abbott was ‘burning the house down’. Challenge by Christmas was now the chatter, but it was very disciplined. The numbers were coming to Turnbull, all by themselves.
Turnbull’s key campaign strategist was former Howard chief of staff Arthur Sinodinos, who had gone public in the run-up to February’s spill motion, declaring that his support for Abbott was ‘not unconditional’. Sinodinos was an authoritative figure in the party, a bridge back to the golden days, having run the former prime minister’s office impeccably for the best part of a decade. The Howard–Costello tensions were not allowed to disrupt the workings of government; backbenchers could get through to the PM; the broad church had its doors open. Turnbull and Sinodinos were close. As chief of staff, Sinodinos had gone through Turnbull’s pecuniary interests when he was given the water portfolio in 2005–06, and was impressed: it was transparent, ordered, and Turnbull was on top of it all. They agreed he would dispose of his interest in fund manager Pengana. Sinodinos resigned in 2006 and went into business, working with Turnbull’s old bank Goldman Sachs for a time, then for the NAB, hoping to make his own fortune while casting around for a seat. Then living in Sydney’s east himself, Sinodinos was frontrunner for Wentworth in 2010 when Turnbull stepped down, but saw he was wavering. Over dinner at Point Piper with Malcolm and Lucy, he reminded them of Janette Howard’s advice to her husband when he was ready to quit after losing the leadership in 1989: ‘Look John, if you want to stay in politics we’ll support you, if you go we’ll support you, but if you leave and you’re miserable about it, you’re going to make life difficult for the rest of us, so make up your mind.’9 Sinodinos made way graciously when Turnbull did the inevitable backflip, and went into the Senate instead. Sinodinos was headed for higher things but stood aside as assistant treasurer as the NSW Independent Commission Against Corruption inquired into a company called Australian Water Holdings, part-owned by Eddie Obeid and chaired by Sinodinos. AWH had donated large amounts of money to the NSW Liberal Party while Sinodinos was treasurer and then president. Much of this was happening without Sinodinos’s knowledge, and if he was guilty of anything, it was a possible breach of director’s duties, which was hardly ICAC’s focus. Sinodinos was considered unlikely to face prosecution, but when ICAC’s investigation itself came under a cloud of illegality, the whole thing started to drag and by December 2014 Sinodinos was coming under pressure to resign from the frontbench altogether. Sinodinos was philosophical about it, and reached an agreement with Abbott that the decision would be announced along with a mini-reshuffle at the end of the week, but was enraged when the announcement was dropped as an exclusive to the Herald, complete with a quote that he was the ‘final barnacle’ to be removed before Christmas.10 Bad call. Sinodinos saw the leak as a malicious act, squarely blamed the PMO, and told Abbott so. He quit without waiting for a reshuffle, and made some choice public comments about the need for renewal and more women in cabinet. He was on the warpath, and would make a powerful enemy. By late 2015 he was orchestrating a Liberal Party return to the centre, under Turnbull, who would reward him with a post at the heart of government, restoring the Howard-era position of Cabinet secretary.
Turnbull’s numbers man was Queensland senator James McGrath, a high-flying Liberal apparatchik who had worked in England alongside master campaign strategist Lynton Crosby and helped Tory darling and likely future British PM Boris Johnson get in as London’s lord mayor in 2008. McGrath then had his own hiccup, falling on his sword to quell a minor furore over an anti-immigrant comment he made to a journalist, of the ‘love it or leave it’ variety, and returned to Australia to help Campbell Newman’s shock-treatment LNP romp into, and then back out of, government. Neither conservative nor liberal, McGrath is purely pragmatic; his political formula is simple: ‘GAF’, for Give A Fuck, meaning do it like it matters.11 As one senior liberal says, ‘if you’ve got McGrath on board, you’re going to win’. Turnbull was close to McGrath—he had wanted to make him federal director of the party when he was opposition leader—and valued his experience in the UK with David Cameron’s Tories.12 McGrath would go on to become assistant minister to the new prime minister, his other right-hand man.
Turnbull compiled lists of MPs on his computer, traffic-light colour-coded: green for supporters, orange for maybes, red for Abbott backers. The green column was lengthening. There were surprising names, staunch Abbott backers like Peter Hendy, the former chief of staff to Brendan Nelson who had seen Turnbull at his worst. Sitting on a margin of less than half a per cent in the bellwether seat of Eden–Monaro in country NSW, Hendy knew he could not win under Abbott and was forced into the Turnbull camp by what Howard called the iron laws of arithmetic. Just as Labor Party MPs who loathed Kevin Rudd had finally gone back to him in July 2013 as electoral oblivion loomed large, even hard-liners who could not abide Turnbull were coming to him now.
Turnbull did not have a serious rival for the leadership. Abbott’s deputy Julie Bishop, making inroads as foreign minister, had been counting her own numbers sporadically all year, and would generally get to fifteen—on a good day apparently, perhaps twenty-one—which was just not enough to mount a challenge. Besides, she and Turnbull went back a long way, to the Constitutional Convention in 1998 where they had fought together for the republic. They had fallen out when Abbott toppled Turnbull, and Bishop stayed loyal to Abbott as deputy, but Turnbull would have Bishop’s support when the chips were down.
The dilemma was social services minister Scott Morrison, who made a show of strength in August, ramming through his own choice of speaker to replace Bronwyn Bishop, former Costello staffer Tony Smith, beating Abbott’s pick, Russell Broadbent. Morrison, still young at forty-seven, had never held a major economic portfolio, and was in the box seat already, the anointed successor next in line for the leadership whomever the party chose, Abbott or Turnbull. He refused to be an assassin, and would not jeopardise the support from the right he had worked so hard to cultivate since grabbing his seat in Sydney’s Sutherland Shire, an Anglo enclave. Turnbull and Morrison had a history too, right back to the battle for Wentworth. Was there an understanding between them now? A two-term promise, a Kirribilli agreement? No doubt Turnbull needed Morrison more than Morrison needed Turnbull. And would Turnbull want to be PM at seventy? Taken out in a box? Or would he make like his much-loved mentor, Neville Wran, and leave at a time of his choosing—in fact, even earlier than Wran did, for the avoidance of pain. Months out from the challenge to Abbott, some people close to Turnbull were quietly confident that Morrison would slot in behind Turnbull, as treasurer. If they were to win an election in their own right, a Turnbull–Morrison government would have the intellectual horsepower to bring back the reforming centre—as in the days of Hawke and Keating, Howard and Costello—and could, if succession was managed, do so without the gnawing instability of endless leadership rivalry that has bedevilled Australian politics since the 1980s. As it turned out, when Abbott went down, the only person he named, and accused of disloyalty, was Morrison.
On 3 September a rogue Rupert Murdoch tweet spooked the Turnbull camp.13 The wayward mogul wanted a snap election, and endorsed Abbott as by far ‘the best candidate’. Turnbull feared Abbott was crazy enough to do it, even so far behind in the polls, just to stave off a challenge. It was a frightening prospect for any marginal MP. With a three-week sitting break scheduled after the Canning by-election looming on 19 September, parliament might never return. The last chance for a spill meeting would be the week before.
Every so often a story breaks that all by itself near topples a government: in 2010, it was news that Kevin Rudd would delay his emissions trading scheme for three years. On Friday, 12 September 2015, just a week out from the Canning vote, The Daily Telegraph’s Simon Benson reported that Abbott was preparing for a reshuffle. If it wasn’t Benson, close to the PM’s office, and if wasn’t the Tele, stuck like glue to the Abbott government, it might have been dismissed as speculation. As it was, the yarn could not be ignored. It was incendiary—particularly the little accompanying break-out box of winners and losers. Half a dozen senior ministers were set for the high-jump. Julie Bishop rang Abbott: ‘What on earth are you doing, this is explosive!’14 Turnbull told anyone who asked, the story was a ‘Credlin special!’ Abbott denied he or his office had planted it, but is hard to imagine Benson taking anyone else’s word for that story. Whoever did, set the spill irrevocably in train.
When it came on Monday, Abbott was blindsided, but not the way Rudd had been five years earlier. Abbott had had six months’ notice, a chance to make a fist of it. Good government had failed to arrive. This coup was expertly done. Bishop advised her leader at midday, walking down the corridor to the PM’s office alone, on camera, in broad daylight, with steely determination. Sources say Bishop did not do what she was sent in to do, failing to inform Abbott a spill was on, although she did tell him he had lost the support of the party. Turnbull stepped down as communications minister, declared he would challenge and gave a press conference in the parliamentary courtyard, no questions taken. It was about the economy; it was about thirty net negative Newspolls in a row. As Abbott loyalists observed, Turnbull had that wrong: it was twenty-nine Newspolls, not thirty. The last time there had been thirty negative Newspolls in a row was under Turnbull’s leadership in 2008–09. Turnbull may yet regret the statement: he has defined the measure of his own performance, and if his polls slump again, it will be a case of live by the sword, die by the sword.
The result that afternoon, 54–44, was decisive enough for Turnbull. Abbott had started with a margin of one vote in 2009, and had so galvanised the party that his leadership was unquestioned at least until after the 2014 budget and the celebrated dinner at the Wild Duck, when the paranoia started to kick back in. When a defeated Abbott held his final press conference as PM-unelect, he promised ‘no wrecking, no undermining and no sniping’, but over the next fortnight proceeded to give a series of exit interviews in which he did just that. Hard-liners like Cory Bernardi and Eric Abetz muttered darkly about forming a breakaway conservative party—perhaps an Australian Tea Party. It would be foolish to assume they are bluffing.
Malcolm and Lucy had done it. Turnbull had achieved the destiny mapped out for him, ever since he was a teenager. Publicly, he had been marked as a possible future prime minister since at least 1977 when he won the Rhodes scholarship, and every second journalist that had interviewed him in the intervening thirty-odd years had asked about his burning ambition for the top job. The weight of expectation was now off his shoulders, happily. A bigger weight, responsibility for a nation, was taken on.
It had been a long, tense winter in the Turnbull household. Lucy beamed: it had all been worthwhile. Malcolm had achieved what her father, Tom, had hoped for in politics, but been denied. Lucy told The Australian she did not want to be called ‘First Lady’, or cast as another Hillary Clinton, meddling in policy and trying to launch her own political career. Yet the frustrated politician in Lucy came through in the same interview, when she launched a bitter, front-page broadside at the Carr government for cutting short her stint as Sydney lord mayor more than a decade ago—largely, she claimed, because of an archaic idea that she could not be trusted to act independently of her husband.15 But Lucy was unlikely to have won a second term anyway and the rather self-serving article made no mention at all of the Ashrawi affair. One person who has watched the couple closely for decades observes: ‘You’d be familiar with the Australian Story where Lucy really injected herself into that. That’s what Lucy does. It’s not the first time this has happened where a spouse who is politically ambitious, to an extent plays out the political career she didn’t have, through the one who has got the political career.’ Lucy’s career has been inextricably intertwined with that of her husband for most of their lives: she has worked on his cases, at his law firm and bank, and run the family’s companies since Malcolm entered parliament. Lucy has carved out her own career as a non-executive director, with an array of board seats with lobby groups like the Grattan Institute (now replacing the Institute of Public Affairs as a key source of external policy advice to the government), the Committee for Sydney and the German–Australian chamber of commerce; charities like the Sydney Children’s Hospital Foundation and the Redfern Foundation; and arts bodies, like the Sydney Biennale and MCA. Lucy and Malcolm have given away millions to charity, often quietly, including through their private Turnbull Foundation. Lucy won an AO for her community service, to philanthropy especially, in 2011.
Arch-conservative Nick Minchin once said that Malcolm Turnbull could never be prime minister while he lived in ‘that house’. Even before the spill succeeded, media were fixated on whether the Turnbulls would move from their mansion into the smaller, less salubrious quarters at Kirribilli House. It is perhaps the first time it has been mentioned that the official Sydney residence of the prime minister was—oh no!—south-facing, unlike the Turnbulls’ home. Grandson Jack came to the rescue: a loveable little reason to stay put. When in Canberra they would stay at The Lodge, once $9 million renovations underway since 2013 are finally completed. All this is perfectly consistent with tradition: most prime ministers did not live at Kirribilli until John Howard moved in, controversially at the time. Since the war on terror, prime ministerial security has tightened and Tony Abbott was advised to move in. A permanent security detail at Point Piper will be costly. The neighbours don’t seem to mind, yet, having a PM next door.
As soon as Malcolm became PM, Lucy announced a quick review of their sprawling $200 million investment portfolio to identify any conflicts with her role or his. These had bobbed up from time to time. In 2002, Peter Cook tried to skewer Turnbull in parliament over share trades in his dotcom venture, FTR Holdings, ahead of certain announcements to the stock exchange. Cook added two and two and got five: the announcements were not price-sensitive; no case to answer. In 2010, when Turnbull was shadow communications minister, Labor fingered Turnbull over the family’s shares in Melbourne IT, of which Lucy was a director, and which stood to gain from the NBN. They sold out and Lucy took herself off the board. In 2013 Labor alleged Turnbull had investments in telcos overseas, like French Telecom, that were rolling out fibre all the way to the home, just as Labor had proposed. Rubbish, Turnbull said.16 Now, Lucy chairs ASX-listed cervical cancer vaccine developer Prima Biomed, and is deputy chair of Kangaroo Island ferry and Captain Cook harbour cruise operator SeaLink Travel. Neither company has contracts with the federal government and it is hard to see how an unmanageable conflict could arise.17
During the Howard years, Turnbull’s assets were mostly targeted at Australian shares and investments held over from his investment banking days. When he became opposition leader, however, the Turnbulls did a ‘pivot’—the portfolio moved offshore and into indirect, arm’s-length-managed investments like exchange traded funds (ETFs) and hedge funds, under the advice of a financial adviser in the US. Turnbull told AFR recently: ‘I don’t have private equity investments any longer because a) I’m in Parliament and b) I don’t have the time. Since I’ve been in Parliament my investments are rather limited. It’s all there on the record. It’s very boring and passive.’18 Between 2009 and 2012 various Turnbull entities bought into nearly twenty different ETFs, some targeting consumer goods, some resources, some technology and others following indices like the S&P 500 and FTSE. A preferred ETF is the SPDR (‘Spider’) series, managed by State Street Global Advisors, some of which are targeted at the tech industry and have significant holdings in companies that have been contracted to work on the NBN, such as IBM, Accenture and Oracle. When the Coalition was returned to government in 2013, the Turnbulls sold out of a series of these ETF investments, including some targeting oil and gas exploration. Resources and energy investments occur frequently on the list—during negotiations over the emissions trading scheme in 2009, for example, Turnbull had an interest in WA’s Griffin Coal Mining Co. Turnbull does not seem to invest much in clean energy: the only asset he’s held since 2007 has been Renewable Energy Corp Bonds.
Since early 2014 the Turnbulls’ new investments have tended to go towards more low-key hedge funds, often based in tax havens. Turnbull’s pecuniary-interests register lists a number of shares managed by the Seven Locks Enhanced Fund Limited, registered in the Cayman Islands and managed by New York–based boutique Seven Locks Capital. Since mid 2014 the Turnbulls have bought into a string of Cayman-registered hedge funds: Bowery Opportunity Fund (minimum buy US$500K), Elbrook Offshore Fund ($1 million), Brookfield Wells Street Offshore Fund ($100K), and the 3G Natural Resources Offshore Fund (unknown). Information on these funds is difficult to come by, compared to the relatively public product-disclosure statements, prospectuses and SEC filings put out by US-based ETFs and other funds. Asked whether the Caymans-domiciled investments offer tax advantages here or in the US, Turnbull responded:
None at all … [the haven] is widely used as a domicile by managed funds which have non-US investors. The funds do not pay tax in the Caymans and so their investors pay tax on their share of the income in their own jurisdictions. So all of my income from managed funds resident there is taxed in Australia in the normal way.19
Turnbull may have hungered for money in his thirties and forties, but people who know him since he went into politics say he wears his wealth like a hair shirt. Turnbull grates at the cartoon depiction of him in top hat and frock coat, the capitalist stereotype from the nineteenth century. He is constantly Instagramming his adventures on public transport, confounding the silvertail image. He believes the tall poppy syndrome is alive and well, notwithstanding the rise of aspirational politics and affluenza. As our richest PM so far, will Australian voters hold Turnbull’s wealth against him? In early 2015, Labor conducted focus-group research on alternative Liberal leaders to Abbott and tested attitudes to Turnbull’s wealth, posing questions such as ‘Do you feel he won’t understand you, because he’s so wealthy?’ The researchers found it was simply not a problem for Turnbull. If voters had a view, it was ‘good on him, he’s done well, he must be smart’. That perception might change if Turnbull were seen to have inherited his wealth rather than made it himself. The truth is somewhere in between: just as it would be impossible to argue that Rupert Murdoch inherited his fortune, having started with one newspaper, Adelaide News, left to him by his father Sir Keith, so it is tough to argue that Turnbull has not made a huge fortune under his own steam through his merchant banking career, although he did inherit a property portfolio worth millions from Bruce. Martin O’Shannessy, who spent a decade measuring the performance of political leaders for NewsPoll, thinks Turnbull’s wealth is no problem for ‘Joe Public’, and in some ways his business background gives him a real-world connection to people that Kevin Rudd, for example—another extremely wealthy PM—did not have.
Turnbull was no doubt frustrated when he was forced to run the country from his squashed communications minister’s office—no proper diary, no briefings—as he waited four days for Tony Abbott to vacate the prime minister’s office, shredders in overdrive.20 At least Turnbull looked the part, swivelling away in the prime ministerial office chair on the floor of the House. The early polls vindicated his coup—the first Newspoll showed the Liberals back in front for the first time in eighteen months, 51–49, and a big jump for Turnbull as preferred prime minister, 55 per cent, trumping Bill Shorten on 21 per cent and becoming the most popular PM for five years.21 It wasn’t as big a sugar hit as Julia Gillard had managed after deposing Rudd, however, and the Coalition has seen Turnbull’s polling rise and fall before. But online gambling agencies cancelled all bets on the outcome of the next federal election as soon as Turnbull took over the leadership, a sign that the game has changed for the Coalition.22
Turnbull’s first Cabinet reshuffle provided a dramatic reboot for the government while balancing small-L liberals with enough conservatives to keep the broad church open. Plotters were rewarded and factional enemies vanquished, to wit Eric Abetz and Kevin Andrews. But the reshuffle was not seen as overly vindictive, with senior Abbott loyalists like Andrew Robb, Peter Dutton and Mathias Cormann kept in place, and right-wing up-and-comers like Josh Frydenberg and Jamie Briggs promoted. Joe Hockey announced he would retire from politics on an undisclosed promise of an overseas appointment, possibly Washington. Inexplicably, Turnbull dumped staunch backer and accomplished industry minister Ian Macfarlane, betraying a colleague who had voted for him in all six ballots he had contested, and had done the numbers for him in 2009.23 Five women found themselves in Cabinet—and Marise Payne was universally welcomed as the first female defence minister—but the new government’s first leak was an old briefing paper showing Turnbull himself was the worst performer of Abbott’s ministers in terms of the number of female appointments to boards.
Turnbull is a high-risk prime minister, to be sure, and the party has turned to him more out of necessity than conviction. Knowing that, Turnbull constantly invokes John Howard, particularly on consulting and restoring due process and reinstating the supremacy of Cabinet, which was ignored during the financial crisis under Kevin Rudd, compromised by minority government under Julia Gillard, and all-but-abandoned under Tony Abbott. Can the ‘soul of indiscretion’ turn into a safe pair of hands?
In his first media outings as PM, Turnbull spoke breezily about optimism and what an exciting time it was to be an Australian and how his would be a 21st-century, even ‘activist’ government. The rubber will not hit the road until a Turnbull policy agenda emerges. Business is hoping Turnbull and Morrison will bite off a backlog of economic reforms—like reviewing the tax system, including the GST and generous superannuation concessions for higher income earners, and winding-back the wind-back of workplace laws in areas like penalty rates—that were headed for the too-hard basket under Abbott. A three-hour closed-room snap summit with business, union and community groups, held within a fortnight of the leadership spill, could be a promising start, if it indicates the beginning of a Hawke-style consensus-building process.24
Turnbull has promised to end ‘stupid, shouty’ politics25 and will not be intimidated by the Murdoch tabloids or the shock jocks; one of his first acts was to pick up and run with a reform agenda held over from his old portfolio, kickstarting the media reforms that were kyboshed by Tony Abbott for fear of a backlash from News Ltd. New communications minister Mitch Fifield is likely to finally abolish the anachronistic audience reach and cross-media restrictions, and relax anti-siphoning restrictions that keep major live sporting events on free-to-air television but inhibit the growth of pay TV.
‘What Turnbull stands for’ shone through in a Robert Manne essay for The Monthly based on a long interview in 2012, given on condition that leadership was not discussed.26 It was a moment of candour. Manne described Turnbull as the ‘last true Deakinite Liberal’—after Alfred Deakin, another journalist–lawyer and ardent reformer who popularised the cause of federation, became prime minister three times and co-founded the forerunner of today’s Liberal Party. Deakin’s social liberalism shaped the so-called Australian Settlement, the framework of tariff protection for manufacturers and centralised wage-fixing, which remained intact for the better part of a century until it was dismantled under Hawke and Keating in the 1980s. For Manne, the progressive liberal tradition lasted until Fraser, but died under Howard and Abbott.
Turnbull was flattered to be called a Deakinite, although the comparison only stretches so far. Manne conceded that Turnbull had shown little interest in social policy—for example, in extending the welfare state to end neglect of mental illness and dental care. Deakin of course supported White Australia, while Manne wrote that of all the subjects they canvassed, Turnbull got most worked up about multiculturalism and why it should be celebrated, and why fears the country would become a ‘nation of tribes’ were misguided.
Turnbull is a true internationalist—already cranking up bids for a seat on the United Nations Security Council and the Human Rights Council—and has real insight on Australia’s place in the world. He condemns the Iraq invasion as a disaster and says that the experience in Afghanistan shows that wars are far ‘easier to get into than out of’. He is level on terrorism, warning ‘people who demonise Muslims are very much playing into the hands of Al Qaeda’. He decries the collapse of the rational centre in America, a country now ‘barely governed’, and mocks former prime minister Julia Gillard, who went ‘doe-eyed’ and sycophantic to gush at how Americans ‘can do anything’. The balance of power in the Asia–Pacific has changed forever: ‘The Pax Americana has been fantastic for everybody concerned … But hello, wake up.’ Turnbull is eloquent on the rise of China: ‘beaten, humiliated, raped, expropriated’ by the West for a century and a half. He draws on a landmark 2011 China speech to the London School of Economics—which he opened by flattering his hosts, telling them about his therapeutic consumption of LSE podcasts while cycling around Lake Burley Griffin of a morning, ‘a calm and rational contrast to the furious discord of Australian politics’—and speaks against ‘containment’ and the idea that the rise of China is a threat. Again, it’s a theme he took up recently, on the seventieth anniversary of the bombing of Hiroshima, that in Australia’s battle for survival against Japan in World War II, ‘our longest ally was China itself’.27
Like all Liberals, Turnbull constantly reaches back to Menzies, as in a 2009 speech28 he gave before he was deposed as opposition leader, which he told Manne was the ‘clearest exposition of his philosophy’. The speech hailed the Menzies of the 1949 election campaign, a turning point in Australian history: a choice between Labor’s attempts at bank nationalisation, and desire to retain wartime controls on wages and prices, and the Liberal philosophy that ‘every extension of government power and control means less freedom for the citizen’.
Turnbull used Menzies’ language of lifters and leaners. He spoke about the importance of freedom and the proper role of government: to enable us to do our best, rather than to tell us what is best. He criticised the ‘blind panic’ of Kevin Rudd and Wayne Swan in response to the financial crisis, and was persuasive. ‘Too often in our nation’s history we have watched irresponsible Labor governments spending taxpayers’ money like a collective of Paris Hiltons on a shopping spree, and burdening our public finances with mountainous debt.’
In place of his own philosophy, Turnbull got personal:
I did not learn about free enterprise in an economics text book or in a politics seminar. Lucy and I have lived a life of enterprise … and we have learned what so many politicians and bureaucrats forget, that the wealth of this country is founded on the tireless energy and optimism of millions of Australians having a go.
Then followed a rather dry, four-pronged plan: reduce waste, promote growth, shrink the public sector and ensure honesty in public finances. It was safe, rather than distinctive or inspiring. Not much to hang your hat on.
Turnbull rang truer on his values in a 1993 interview, when the republic train was leaving the station and he was a member of no political party, let alone leader of one:
Labels are very misleading, but I have always considered myself to be small-L. The things that are important to me are individual freedom and egalitarianism. The ethic I find appealing is a fair go. Jack’s as good as his master is a concept I like. The reason I was involved with the Liberals is that I didn’t then and I don’t now believe socialism is the answer. Well of course Labor is no longer a collectivist socialist party. I don’t think there is an ideological difference between the parties any more. It’s an attitudinal difference.
Asked about John Hewson, then Liberal leader, Turnbull was biting: ‘Hewson’s deficiency as a leader is that there are more nerves in the human body than the hip-pocket nerve. I mean, tell me if you agree. Most federal politicians are incredibly uneducated. They talk only about money.’29
Turnbull also harked back to Menzies in a 2015 speech on the rule of law, when he compared the threat posed by Islamic State with that of Hitler’s Germany, Tojo’s Japan or Stalin’s Russia, and argued counter-terrorism measures needed to be right, not just tough. There was always tension between security and liberty, Turnbull said, yet even as Menzies led Australia into World War II in 1939, he warned: ‘The greatest tragedy that could overcome a country would be for it to fight a successful war in defence of liberty and to lose its own liberty in the process.’30
Yet Menzies abandoned his libertarian principles when he tried to ban the Communist Party in 1951—a referendum he lost—and Turnbull as communications minister has arguably done likewise with the data retention laws that will help facilitate mass surveillance and undermine freedom of the press.31
Eminent historian of the Liberal Party, Ian Hancock, says there is
nothing more embarrassing than watching a small-L liberal, whether it be Gladstone in the 19th century, or Menzies, who was one in many ways, or Turnbull, being put into a position where because of popular movements or circumstances, they are required to administer laws which on an ordinary day they wouldn’t have liked.
Hancock sees another parallel between Menzies and Turnbull: from the moment they entered parliament, it was clear they were not going to sit on the backbench for long, and once they got to the frontbench, they were not going to sit halfway down. Call it ‘born to rule’. ‘Both men had this character: as soon as you see them you know this is leadership material,’ Hancock says.
Being born to rule and being picked out as somebody who has obviously got this capacity to be at the very top doesn’t necessarily mean you’ll get there. You’ve got to fight. In many ways they have to overcome the very thing that marks them out, because in the process of being so obviously the leader, a lot of people get their noses out of joint.32
Both were torn down as leader—Menzies in 1940 and Turnbull in 2009—had their time in the wilderness, and remade themselves.
Which leads to the bigger question surrounding Turnbull as prime minister: To what extent he has traded away his own longstanding, deeply held small-L liberal policy commitments to assume the leadership—on climate change, on marriage equality and the republic—and if he has, for how long will they remain on the outer? As early as February 2015, Peter van Onselen spelled out five things Turnbull had to do to mollify the right: stay harsh on border protection, leave the climate change policy alone, oppose a free vote on marriage equality, avoid the republic debate and work well with the Nats.33 It is a mighty straightjacket. After the spill, just to form government, Turnbull was forced to negotiate a signed Coalition deal with the wary Nationals—an unprecedented requirement—promising not to abandon the party’s climate change policy for the life of his prime ministership.
In an August interview, Arthur Sinodinos revealed a more supple, pragmatic approach, which will no doubt guide Turnbull:
My attitude to the party has always been that provided you subscribe to certain basic values and beliefs, it should be open to everyone. It’s not the province of one group or another. There is no-one in there who is the conscience, the oracle of Delphi, and unless you subscribe to everything that the oracle says, you can’t be a member of the party. My view, whether its CPRS or same-sex marriage, has always been that there is no one issue that should be a complete fault line, which means that it’s non-negotiable. Because political parties are broad movements with values and beliefs and the whole point is to provide where possible, without diluting your message too much, a broad tent, a big tent, because Australians want us fundamentally to govern from the centre, out.34
The Coalition party room regards the whole climate debate as finally defused, but it will surely be revisited as climate action in the US and China gathers pace. Turnbull has insisted the Coalition’s Direct Action policy is working and defended the emissions reduction targets the Abbott Government agreed to take to the UN Climate Summit in Paris, but experts and commentators have criticised them as ‘pathetically inadequate’.35 Experts say it could morph into a baseline-and-credit scheme, a carbon-pricing mechanism in which a cap on emissions is imposed and lowered progressively, and polluters given credits for reductions. But as long as Direct Action relies on taxpayers’ money for those credits, it will be unaffordable and unfit for purpose, if the object is to achieve emissions reductions deep enough, fast enough to avoid dangerous climate change. Outgoing Climate Change Authority chief Bernie Fraser has already accused Turnbull of losing his courage on the issue.36 At least Tony Abbott’s futile war on climate science is over, and minister Greg Hunt is flagging new certainty for the renewable energy industry and incentives for battery power storage, which will transform the power industry.
On marriage equality, Turnbull has agreed against his own better judgement to hold a plebiscite after the next election, and if conservatives such as senator Cory Bernardi decide that is the perfect opportunity for a homophobic campaign, it could be a divisive disaster. If it is conducted in a spirit of bipartisanship, Australia might soon join the majority of developed countries that have recognised that continuing institutionalised discrimination against same-sex couples is indefensible.
Turnbull has given no sign yet of a move on the republic, and pragmatism certainly trumped principle at his swearing-in ceremony, where he told his first prime ministerial little white lie:
I, Malcolm Bligh Turnbull, do swear that I will well and truly serve the people of Australia, the office of prime minister and that I will be faithful and bear true allegiance to Her Majesty, Queen Elizabeth II, the Queen of Australia, so help me, God.