CHAPTER FOUR

A waste of energy

Climate change was the policy that dared not speak its name. Condensed to energy, it became the key issue that precipitated Malcolm Turnbull’s decline and fall. Turnbull’s handling of the issue lost or bewildered MPs as diverse as Keith Pitt from Bundaberg and Tim Wilson from Brighton. As a National, Pitt didn’t have a vote, but his threatened resignation from the frontbench the week before helped contribute to the sense of crisis around Turnbull’s leadership. Wilson did vote for Turnbull in the leadership ballots, but he was sorely tested in the lead-up by reports of changes that Turnbull was proposing to the National Energy Guarantee as he sought to convince MPs like Andrew Hastie not to cross the floor to vote against the government.

You can’t blame Josh Frydenberg for telling Insiders host Barrie Cassidy on 9 September, a fortnight after Malcolm Turnbull’s removal, ‘It went through the party room three times, so it wasn’t the factor in his downfall.’ If people did believe it was the factor, then they might also believe Frydenberg was in some way complicit in the disaster.

Frydenberg, as the former environment and energy minister, played no part in the undermining of Turnbull, nor in the coup against Abbott in 2015, although that did not stop Abbott from seeking to derail him at every point along the way in his juggernaut campaign to destroy Turnbull. Then Abbott had the gall to ring him and ask him not to run for the deputy leadership against Peter Dutton’s running mate, Greg Hunt.

Frydenberg was unable to nail down the National Energy Gaurantee (NEG) and perhaps save Turnbull from being dragged down into the mire, because there were people from both the left and right who were determined, for their own reasons, that he should fail. So it may not have been the factor, but it was certainly a critical one. And, as Turnbull realised near the end, there was a simpler solution, which if pursued from the beginning might have spared them all a lot of heartache. That was to opt for regulation rather than legislation of the emissions-reductions targets.

It would not have resolved Turnbull’s essential problem, which was the determination of his enemies to destroy him, no matter what. If energy was resolved, they would have moved on to religious freedoms. But with the NEG, despite its imperfections, he might have forced combatants in the climate wars, which had wreaked havoc on Australian politics for more than a decade, to lay down their arms, at least for a while. It would have bought him valuable time. But it wasn’t to be.

No matter how many meetings were held with premiers, no matter how many experts or industry leaders or lobby groups, from the minerals council to the National Farmers’ Federation – all of whom supported the NEG – were lined up to explain to MPs what was involved, there was a clutch of backbenchers who had decided that no resolution would ever be reached under Turnbull.

In 2018, conservatives and moderates alike believed that Turnbull fell into a trap set by his enemies, who succeeded in killing him twice on the same issue. The right argued that Turnbull was making too many concessions in an effort to get Labor premiers on board. The moderates believed he was making too many concessions to keep the right on board.

Frydenberg, as the front man, had spent months trying to convince the public, the premiers, and his own backbenchers that the NEG was the mechanism which would help reduce power prices, provide certainty for investors, and therefore make electricity supply more reliable. Along the way, emissions would be reduced in line with Australia’s commitment to the Paris targets that Abbott had signed up to as prime minister – which he then, as a backbencher, advocated should be abolished, because he said his agreement to the targets had come about because he’d been misled by bureaucrats.

As a signatory to the Paris Agreement on climate change, Abbott had committed Australia to reducing its total emissions to 26–28 per cent below 2005 levels by 2030. Later, employing his cut-through communication skills, Abbott managed to turn one word – Paris – into the enemy of cheaper prices, and spearheaded the campaign to follow Donald Trump in abandoning the agreement.

Turnbull’s office noted the similarity of the arguments and responses made by Abbott, Jones, Bolt, Credlin, and their attack puppy, Craig Kelly. It was as if they had been issued with the same talking points.

After Turnbull’s removal, when Abbott found himself struggling in Warringah against Zali Steggall, whose main policy focus was climate change, Abbott switched positions. Again. Paris was no longer sin city for denialists. Nope, Abbott said during a debate on Sky with Steggall and other opponents, Australia no longer had to quit Paris. And why not, asked moderator David Speers? Well, because there was now a new prime minister and a new energy minister. Mission accomplished. Abbott showed himself to be a man of many convictions, enough to suit any occasion. His camp followers stayed silent.

Only a matter of months before, so critical was this issue to the Liberal Party’s future – or so he wanted people to believe – that Abbott had been threatening to cross the floor to vote against it.

Abbott was keen to present this as similar to Turnbull’s vote for Rudd’s Carbon Pollution Reduction Scheme; however, there would have been a world of difference between an opposition leader who had committed himself to a policy, lost his leadership because of it, and then voted for it, and a former prime minister in a government with a one-seat majority threatening to vote against that government in the parliament on part of a policy he had constructed. The distinction was lost on Abbott.

Most people – industry, the media (excluding conservative commentators) and Labor, although it withheld support to maximise Turnbull’s discomfort – saw the NEG as imperfect, but regarded it as the last, best chance to end the climate wars, which, ironically, would have helped Abbott in his seat.

Abbott and his surrogates, particularly New South Wales backbencher Craig Kelly, whom Frydenberg joked had taken a sleeping bag into the Sky studios, where he appeared at least once a day, saw it as their best chance to blast Turnbull out of office.

As chair of the government’s backbench energy committee, Kelly appeared at every critical point to criticise or cast doubt on whatever measure Turnbull and Frydenberg put up. When preselectors in Kelly’s seat of Hughes warned him that he faced his own personal emission, Kelly threatened to run as an independent. He defended his speaking out by saying that, unlike Labor MPs, Liberal MPs were not clones, drones, or sheep, which prompted me to describe him in my column in The Australian as a more exotic kind of animal, ‘part stalking horse, part pet poodle tethered to Tony Abbott’. He gave an involuntary smile when we unexpectedly crossed paths in the press gallery corridor a few hours after Turnbull was deposed, so I asked how his preselection was looking. For once, Kelly had nothing to say, although he did manage later to force Scott Morrison to save him by threatening to sit on the crossbench. One thing poodles do have going for them, other than their reputation as the most pampered of pets, is that they are smart.

Peter Dutton was growing increasingly exasperated by the handling and management of the issue, which he came to call the ‘noodle nation NEG’, a paraphrasing of the devastating parody of Kim Beazley’s spaghetti- and-meatballs diagram to launch his Knowledge Nation policy.

‘Turnbull’s plan was to bring the NEG on [in Parliament],’ Dutton later recalled. ‘Pyne and I went nuts.’

Dutton acknowledges there are ideological differences between him and Pyne, but they were aligned on this, following what had seemed a successful party meeting on 14 August 2018. Pyne and Dutton agreed that bills which stood no chance of getting passed by parliament – particularly if they threatened to divide the government, as the NEG did – should not be put up for a vote, because they would wreck confidence in the government.

Also, Dutton believed that trying to isolate dissenters by getting Labor on board would only court disaster.

‘Malcolm’s plan with the NEG was to get the states to agree through COAG [the council comprising leaders of the federal, state, territory, and local governments], then have the states pressure Bill Shorten to support the legislation, and from there what he thought would happen was on one side would be the Liberal Party and the Nationals and Labor. Sitting on the other side would be Tony Abbott and fringe-dwellers’, Dutton said later.

‘It was never going to happen. There were 20 people on our side who were not going back to their electorates with photos of them sitting next to Tanya Plibersek voting on a motion supporting climate change.

‘It would have been a complete disaster for the government. We effectively had the bill pulled.’

Pyne confirms this, saying that he and Dutton convinced Frydenberg not to introduce the NEG legislation until there was a final, settled position. Frydenberg had lodged the legislation in the Table Office on Tuesday evening, after what had seemed a victory in the party meeting earlier in the day. Pyne had it removed.

A key Morrison supporter, Alex Hawke, thought the NEG was a good attempt, but that the whole thing was a trap.

‘And Malcolm fell into the trap again,’ he said. ‘The states were never going to sign off on it. He was wedged against the base, and was left needing the Labor Party to get it through. That drove me mental.’

The experience of two MPs, one a National from the LNP in Queensland, the other a Victorian Liberal, as different as it is possible for two people to be, who ended up at the same point – angry and confused – showed just how fraught energy policy had become for Turnbull.

Keith Pitt represents one of the poorest electorates in the country, Hinkler, north of Brisbane, which includes the rum-producing town of Bundaberg, where Pitt was born. Tim Wilson represents one of the most prosperous electorates, Goldstein, which includes the bayside suburb of Brighton with its rows of multi-million-dollar mansions looking out over Port Phillip Bay. Wilson was born in the now very trendy inner-Melbourne suburb of Prahran. They were born in and live at opposite ends of the country, and they are as different personally and philosophically as it is possible for two backbenchers to be.

Pitt, an electrical engineer and sugar-cane farmer, has been married to Allison for 20 years. They have three children, Liam, Ruby, and Elisabeth. He was one of four Coalition MPs who voted in the parliament against same-sex marriage. Pitt is a traditional conservative Queenslander.

Wilson, a trade consultant who worked for a conservative think tank, the Institute of Public Affairs, proposed to his partner, Ryan Bolger, from the floor of the House of Representatives during an emotional speech supporting same-sex marriage. They married at a private family ceremony in March 2018 in Melbourne’s Botanic Gardens. Wilson says he doesn’t belong to any faction, neither moderate nor conservative, describing himself simply as a Liberal, and later ran for re-election as a ‘Modern Liberal’.

On the Friday night before the spill, Pitt, who along the way had threatened to resign his frontbench position, was furious, while Wilson, fearing a ‘red line’ had been crossed, felt like his head was about to explode.

Pitt has been consistent on energy issues. In June 2015, he had told parliament he would not be supporting the government’s renewable energy target, which aimed to have 23.5 per cent of Australia’s energy derived from renewables by 2020.

‘In my view, the renewable energy target – the RET, the deal the coalition has been forced into with Labor – will achieve only three things,’ he said then. ‘It will increase the cost of electricity for those who can least afford it, Australian taxpayers will have spent billions of dollars subsidising private enterprise, and, come 2020, environmentalists will have little more to show for it than a warm and fuzzy feeling.’

So it was no surprise he was opposed to the NEG. He did not believe it would deliver lower prices, and he did not believe it would guarantee reliability of supply.

Pitt had written a paper proposing a fund that would provide money to keep existing coal-fired power plants going. He met with Turnbull and Nationals leader Michael McCormack on 28 June to discuss it. He says they were both non-committal.

On Monday 13 August, he told a meeting of National Party MPs that he could not support the mooted energy policy, and that being the case, he would have to resign as assistant minister to the deputy prime minister. He rang Frydenberg to tell him this, and Frydenberg suggested he speak to the prime minister.

At 4.30 that afternoon, Pitt went to see Turnbull, and told him what he had told his party room. He could not support the NEG. Turnbull told him that if he held to that position, he would have to resign from the frontbench.

Again, Pitt outlined his concerns: it would not deliver what it promised.

Turnbull asked him if he thought the people who had designed the NEG were ‘idiots’. Pitt shrugged. Turnbull got Audrey Zibelman, the chief executive officer of the Australian Energy Market Operator, on speaker phone. Pitt had already spoken to her previously, and had not been convinced by her arguments, either.

After half an hour, Pitt left.

Wilson had some sympathy for Turnbull’s plight, believing that the Turnbull government had really only existed for six months, and the rest of the time was spent resolving the problems left over from the Abbott government, which in turn were left over from a failure to carry out policy work in the Abbott opposition.

He was concerned that too often when the government was talking about energy, it seemed it was fighting for investor interests rather than for people’s. Too often, it got bogged down in fighting for the what, not the who. So when Abbott argued that energy policy should be about ‘pensioners, not Paris’, he was able to define, with only three words, both the issue and who he was fighting for in accessible language. Wilson thought that was critically important.

In mid-2018, Wilson WhatsApped the prime minister with some advice, urging him to emphasise cheaper prices. Turnbull’s arguments were lacking empathy; people wanted to know that their concerns were being addressed and with some sympathy. The messages were not being communicated properly.

Wilson said to Turnbull that the greater task ahead of him was not to devise a policy for all time, but one that would stabilise the market for the next five or 10 years; after that, technology would take over and reduce emissions. He did not think the government should over-invest on the issue; he did not mean this financially. His message was received and read.

Like so many others, Wilson was becoming increasingly concerned that few people understood the NEG.

On Monday 13 August, the night before the joint party-room meeting to finalise the NEG, Abbott had close to the last word at a long, fractious meeting of the energy committee. His former friend Frydenberg went around the table, asking MPs to declare themselves. When he finally got to Abbott, and asked him if he was a yes or a no on the NEG, Abbott replied, ‘It’s all a crock.’ It was an echo of 2009 when he described climate change as ‘crap’, a comment that as leader he had to disavow. Abbott only joined as a member of the backbench committee that night when he heard of the meeting. He and two others – Craig Kelly and Ken O’Dowd – voted against the NEG, while seven others supported it.

At the next morning’s joint party meeting, with Turnbull set to get his energy policy through the party room, Abbott was described by colleagues as looking agitated and sounding belligerent. ‘He was right off the reservation,’ one said. Another thought Abbott was unhinged. Another thought Abbott’s pitch to colleagues that he was the one who knew how to win elections, and knew how the party room ticked, was plain sad.

Even conservative New South Wales senator Jim Molan ended up supporting the NEG, although he did say it was like putting lipstick on a pig.

Pitt sat silently throughout that meeting. That was not unusual. Frontbenchers don’t speak unless they are asked a question.

Marginal-seat holders like Sarah Henderson and Julia Banks, who were tired of the conflict and Abbott’s divisiveness, decided to have a go. Henderson backed the NEG, but also strongly supported Barnaby Joyce’s call for tougher action against energy suppliers to stop gouging and to keep prices down. Then she turned to Abbott, addressing her remarks directly to him, appealing for unity and telling him that the only way they could win would be if they all fought together. Abbott interjected that he had helped her win. ‘You did,’ Henderson said. ‘But we need to keep winning.’

Banks acknowledged that she didn’t have as much experience as others, but did have experience winning a marginal seat. And, although she didn’t say so, without Abbott’s help. She acknowledged the importance of getting prices down, but also of sticking to the Paris commitment. She also addressed herself to Abbot, appealing for unity outside the confines of the party room, urging him to show respect to all the third parties, from the National Farmers Federation down, which supported the NEG.

Abbott’s bitterness, his frustration over yet another humiliating defeat at Turnbull’s hands, overflowed. If Labor was looking for an ad, he helped write it for them by describing explanations of the NEG as ‘merchant bankers’ gobbledygook’. One can only surmise who most voters familiar with rhyming slang would have concluded was the merchant banker in this context.

At the meeting, Craig Kelly and Andrew Hastie announced that they reserved their right to cross the floor, threatening to join Abbott. At that stage, it look like a small band of MPs would be voting in the House with the Greens’ Adam Bandt against the government. Labor was also not fully committed to backing the NEG – and thereby backing Turnbull. Labor was enjoying Turnbull’s discomfort, and was profiting from the disunity too much to let him off the hook. Not that Labor’s support would have helped Turnbull with the hard right. One of the arguments against him was that he spent too much time trying to get Labor premiers on board. They were branding Turnbull as Labor-lite.

In the mix was the possibility that the government would lose the vote on the floor of the House, and then be forced into an early election on power prices.

Turnbull and Frydenberg held a victory press conference after the joint party meeting, which turned out to be embarrassingly premature and only inflamed internal resentment.

A series of meetings was arranged with different groups of backbenchers on the Wednesday as Turnbull, his office, and Frydenberg tried to resolve the differences and to limit the revolt to the few who would never be satisfied.

In what were described as good-faith negotiations, Turnbull met with Joyce and others, to flesh out their concerns, and to see if they could be met. Joyce seemed in some turmoil about which way to go. The mere mention of the word ‘climate’ set him off. He was not deliberately undermining Turnbull, but neither was he going out of his way to be helpful.

If he had still been leader, he most likely would have found a way through the impasse with the Nationals. Like so much else, it wasn’t to be.

When she was leaving around nine o’clock that night, Sally Cray noticed that Dutton’s bodyguards were outside Cormann’s office. She went in, and staff told her that Dutton was in the dining room. She opened the door, and was surprised to see Dutton and Cormann sharing pizzas and wine with Zed Seselja, Michael Sukkar, and Tasmanian senator John Duniam. They said they were celebrating the defeat of the euthanasia bill in the Senate. Cormann had taken a break from arm-twisting on company tax to rally the numbers against David Leyonhjelm’s bill.

They invited her in, and then Cray stayed on with Dutton and Corman when the others left. Dutton told her how bad it had been at a meeting of Queensland MPs earlier in the evening, in what had been their first gathering since Longman. Apart from the fact that it finished late, there was nothing that happened or that was said at the Queenslanders’ meeting that was unexpected, except that Luke Howarth, normally one of the saner marginal-seat holders, was agitated, according to what Dutton told Cray.

The next day was ominous. Pitt’s threatened resignation had been leaked to The Australian. The front-page story on 16 August referred to rebel MPs urging ministers to quit.

The only frontbencher named was Pitt. Backbenchers referred to included Hastie and Tony Pasin, the member for Barker in South Australia, who had already been named as opponents during Tuesday’s party meeting. Nevertheless, the leak did what it was designed to do. It built a sense of crisis around the government and Turnbull.

That same morning, Dutton did his infamous interview with Ray Hadley, in which he said he would resign from cabinet if he disagreed with government policy. Cray texted Dutton to ask what was going on. Dutton said he was not causing any trouble, and suggested she read the whole transcript, because it would show Hadley was badgering him. She did, and then showed it to Turnbull in preparation for question time. He underlined a couple of bits, but didn’t appear too troubled by it.

Pitt does not know who leaked the story about his threat to resign, swears it wasn’t him, and says that the only people who knew were the prime minister and his colleagues in the National Party room – which was more than enough to guarantee it got out. But as Pitt and others argue, if there had been overwhelming support for the NEG, Turnbull would still be prime minister.

Early on, before it got too late, Pitt had a view that if Turnbull had been able to cast the turmoil as a Nationals revolt – given that Andrew Gee, Barry O’Sullivan, John Williams, George Christensen, Ken O’Dowd, and Michelle Landry were not happy with the NEG – he might have been able to get through it. That option was closed off after the 14 August joint party-room meeting.

Turnbull and his office were not oblivious to the problem, but he did not help himself by over-investing in the issue, and ultimately losing more people than he gained by trying to keep people in the tent who would never be satisfied with anything he did.

‘Craig Kelly and others we knew were causing a lot of angst,’ one senior adviser said. ‘In the Nats’ party room, it was Keith Pitt. We knew McCormack was having a few problems keeping people together. We knew Abbott was hardening up his position. We knew we were heading for a significant moment with the NEG.’

The internal brawling over the NEG coincided with another period of ascendancy for Bill Shorten. Only the week before, supremely confident Labor apparatchiks had been busily tutoring businesspeople – who had paid more than $1 million to mix with Labor frontbenchers and to hear Shorten speak at a special business forum – on appropriate etiquette. As they worked the room, their advice, only half-jokingly, was that participants should get accustomed to saying ‘Prime Minister Shorten’.

Later, at a closed event, a cocky Shorten set aside his prepared speech with a flourish, as if to signal this was one of those times where he could say what he really thought, to deny he was in any way anti-business. All evidence to the contrary, he dismissed this claim as hype from the government, and then couldn’t resist a swipe at one of his braver critics, the Business Council of Australia, saying it had been put in the ‘naughty corner’.

It was like businessmen and businesswomen had forked out $11,000 each to buy their own tickets to the guillotine. Labor could not be blamed for being so confident then – or business for being either so compliant or so cowardly – about its prospects after watching Liberal Party guerrillas/gorillas commit themselves to killing Turnbull and crippling the government.

Late Thursday afternoon on 16 August, Morrison and Frydenberg met with Turnbull in his office to discuss matters arising from his discussions with backbenchers. It was clear that some MPs would cross the floor if the government legislated the targets. During the discussion, one of Turnbull’s economic advisers, Katrina Di Marco, pointed out they didn’t have to legislate the target – they could regulate it, with a ‘poison pill’ attached. That ‘poison pill’ would be that the minister would not have a licence to change the targets at will, that the minister could not take any action that would increase prices, and that the minister would first have to go to parliament to lay out the reasons for lifting the targets. The minister would also be required to spell out the likely economic impact of any increase.

Turnbull and his staff were cranky that, as the minister, Frydenberg had not canvassed this option previously. Although it’s fair to say they were cranky with themselves, too, for not having seen it. All the angst, all the agony, over the legislation of the target could have been – if not avoided – at least mitigated. In fact, there was one view that they could simply put the targets on the Department of Environment website, or record them in the Government Gazette, the official repository for proclamations and legislation. That would have driven the greenies mad, but if regulation with appropriate control measures had been the option put to the party room from the outset, it might have spared Turnbull the aggro from the right, and robbed his enemies of one weapon, at least. Unlike a number of his MPs, who were committed body and soul to either one or the other, Turnbull viewed legislating versus regulating as a distinction without a difference. He wanted to nail down the policy, and was focussed on getting as many MPs as he possibly could to support it, knowing all along that he was battling against those who only wanted to ‘wreck the joint’.

Later, Turnbull's office concluded that Frydenberg’s task of corralling Labor premiers, who had no interest in helping Turnbull, and the Abbottites, who had even less interest in seeing him succeed, was too big for Frydenberg to handle.

In fact, Turnbull’s advisers had at one stage suggested diplomatically to Frydenberg to watch out that he did not try to be all things to all people, and to be careful he did not lead them to believe that all their concerns would be met, because clearly they could not.

The Thursday meeting ended with Turnbull, Morrison, and Frydenberg agreeing that regulation was worth considering, so work began on the submission to cabinet to change the policy.

That night, Cray went out to dinner with Turnbull’s press secretaries. Pretty soon, all their phones started ringing almost simultaneously, with calls from other media to ask about a story posted online by Sharri Markson in the Daily Telegraph saying that Dutton was preparing to challenge Turnbull for the leadership. Again, Cray contacted Dutton. Dutton said he hadn’t spoken to Markson; she had been ringing him all day, but he hadn’t returned her calls. It was a long way from a denial, and Cray did not see it as one.

The sense of crisis escalated. The NEG was unravelling, and talk of leadership instability was now rife.

On Friday, Hastie was still in Canberra, chairing a meeting of the parliamentary joint committee on intelligence and security. That morning, Justin Bassi, Turnbull’s national-security adviser, approached Hastie to ask him if he had heard anything about the leadership. Hastie, who regards Bassi as a friend, told him he had not. Hastie insisted later that he was oblivious to the intrigue sparked by the Telegraph story that morning, and that he wasn’t even aware the story was running. He told Bassi he was more concerned about the NEG. Hastie was implacably opposed to legislating the targets. In his view, if Shorten wanted to go to the election promising to lift them to 50 per cent, that would be fine. He was confident they could win the argument as to why that would not be a good idea. He swears he did not see it as a leadership issue.

Hastie had to excuse himself from the joint committee meeting at one point after receiving a number of texts from Frydenberg. Frydenberg told Hastie he had spent a couple of hours on the phone talking to his former boss and mentor John Howard about how best to resolve the issue. Frydenberg told Hastie that he and Turnbull were working their way through a number of matters in an effort to resolve the problem, and floated with him the idea of regulating rather than legislating the emission-reduction targets. Hastie thought that was a much better way to go. He says Frydenberg swore him to secrecy.

Later that afternoon, while he was in the Qantas Lounge waiting for his flight back to Perth, Hastie got a call from Turnbull, who also discussed the option of regulation rather than legislation. Hastie told him, ‘That sounds good.’ He told Turnbull he was willing to move forward and support the government. He assured Turnbull that he ‘was not committed to blowing up the government’.

‘I was working in good faith,’ he told me later. Hastie says someone in the prime minister’s office, not from the press office, then suggested to him that he should brief journalists that he was working with Turnbull to resolve the problem. Hastie then texted two senior Fairfax press gallery journalists – Phil Coorey and Peter Hartcher – to tell them he was engaged in constructive discussions with the prime minister’s office on the NEG, that the PM was listening, and that good progress had been made. In his texts, he described the leadership speculation to them as ‘BS’. Hastie says he did not go into details with them about what changes were being proposed, but he emphasised they had nothing to do with the leadership or politics, and were only about arriving at a good policy.

He ended up sitting next to his housemate and good friend, Ben Morton, on the flight back home. He told Morton he was prepared to back a solution if it could get through cabinet. Hastie was thinking about how he was going to explain his changed position. He had agreed to be interviewed by Alan Jones on Sky again on the following Tuesday night about the NEG, and the previous week had told him he was prepared to cross the floor over it.

Not long after Hastie’s flight took off, one of the journalists that Hastie had contacted, Phil Coorey, and another Fairfax journalist, David Crowe, broke stories online saying that Turnbull was making major changes to the NEG, to regulate rather than legislate the targets, in an effort to contain the threatened backbench revolt amid rumours of an impending challenge from Dutton. Later that night, the Guardian’s Katharine Murphy also reported the change. The ABC followed up with a story online saying that the move, which would not require parliament’s approval, was designed to head off the prospect of a backbench revolt. Andrew Bolt gleefully reported that Turnbull had panicked and that his leadership was over.

Later that night, with the story out, Turnbull himself outlined the plan to regulate in his speech to the National Party’s annual conference in Canberra.

By the time Hastie landed in Perth, the story was everywhere. Hastie was furious. He says he had been sworn to secrecy about the actual change because it supposedly had to go through cabinet, but he got off the plane to read an online story about it in The Australian and to scroll through 30 text messages and voicemails, mainly from the media, asking about the compromise.

The headline in The Weekend Australian warned, ‘Paris retreat may not save PM’. Simon Benson and Joe Kelly wrote:

Malcolm Turnbull has dumped the government’s plans to legislate the 26 per cent Paris emissions-reduction target, in a dramatic capitulation to rebel MPs and ministers threatening to cross the floor and vote it down.

Senior government sources confirmed that Mr Turnbull’s praetorian guard had come to the conclusion on Thursday night that threats to his leadership were real and that a bold move was needed to head off the growing likelihood of a revolt.

An unauthorised intervention by a prime ministerial staffer; a bit of overbriefing from someone releasing incomplete detail prematurely, without a proper explanation of or emphasis on the ‘poison pill’ provisions; a highly charged atmosphere, with mounting speculation of a challenge from Dutton; and journos with eggbeaters at 20 paces saw everything spiral. It was a disaster. Attempts to quell a revolt with a policy backflip, supposedly being negotiated quietly, suddenly became public. It exacerbated the tensions. It looked like cabinet was being usurped, while those MPs who had agreed to the NEG on the basis that the targets would be legislated were furious that all their objections and concerns were being overlooked to placate a rebellious few. Perhaps if regulation had been the option from the get-go, it wouldn’t have been so bad.

If Hastie was angry, Pitt and Wilson were even angrier. As was Scott Ryan. Unlike Hastie, Pitt thought that regulation rather than legislation was ‘adding fuel to the fire’. He thought the prime minister had realised he was in deep trouble and was trying to avoid a showdown with the rebels. Pitt reckons that not only did it make matters worse, but it showed Turnbull’s tin ear.

To Wilson, the idea of having a minister determine the target without recourse to parliament, which was how he read the stories on Friday night, was anathema. It would vest enormous power in a minister, giving him or her the power to increase tax rates without getting the necessary legislation through parliament.

Wilson’s condition for supporting the NEG was that it would be legislated. He messaged the prime minister, saying it was a ‘red line’ as far as he was concerned. He made it clear he that was not threatening anything, but it was critical to his continued backing that the NEG be legislated.

‘On Friday night when I read it, my head was about to explode,’ Wilson said later. ‘I spent Saturday trying to get to the bottom of it. I never got clarity.’

On Sunday, Wilson was fielding calls from the media, so he was thinking hard about how to respond to something he regarded as ‘quite serious for me’.

‘It was a big deal,’ he told me later. ‘Not just because I felt it was disrespectful. I felt it was a fundamental principle.’

He needn’t have worried. Next day, the policy changed again, and then all of them got overtaken by events.

Turnbull had called an urgent meeting of cabinet for Sunday night. By 5.00 pm on Friday, the only two people who had not responded were Dutton and Greg Hunt, with Steve Ciobo also threatening to be a no-show. Turnbull’s office told Dutton’s office that he had to attend the meeting and that they would be sending a VIP aircraft to get him. They were convinced by then that something was up. Dutton says there was ‘no conspiracy’ involving him and Ciobo – once regarded as one of Turnbull’s closest allies, but who was a close mate of Dutton’s. Dutton said he had a family event and was always going to catch a 7.00 pm commercial flight. Ciobo’s earlier flight had been cancelled, so they were planning to fly down together. Sally Cray told Ciobo there was a seat for him on the VIP to Canberra, too, and that he and Dutton could plot and scheme together all the way to Canberra. She was semi-serious about that. She was deadly serious when she warned him via text that if things blew up, Scott Morrison could end up prime minister by the end of the week.

Ciobo resented the insinuation that he was involved in Dutton’s plans, and offered to do what he could to calm things down. While he knew the drums were beating, and while their mutual friend Michael Keenan knew something was afoot and heartily approved, Ciobo insists he was not involved.

Until that flight to Canberra on the Sunday night, that is. Ciobo says Dutton went through it all with him on the way down. He told Ciobo that he had more than 50 per cent of the votes in the party room. He told him he had the numbers to beat Turnbull. Even more importantly, Dutton told Ciobo that he had Cormann’s full support.

Dutton insisted to Ciobo that night and the next day that he and Cormann had ‘gamed’ the whole exercise, that he and Cormann had masterminded the campaign, and that together they had worked out who would go where and what would happen immediately after the coup. Ciobo was to tell people later that this was a critical factor in his decision to support Dutton.

Turnbull had also invited cabinet ministers to dinner at The Lodge that Sunday night before the formal meeting. With leadership speculation at fever pitch, the dinner was switched to the Explorers Room in the cabinet complex at Parliament House so ministers could come and go – or not – without being caught on camera. It was a spectacularly awkward affair in that small room adorned by portraits of famous explorers.

Cormann was a no-show. While that only made Julie Bishop more suspicious about all of them and their motives, the prime minister’s office had known in advance that Cormann would not be there, and believed at that stage that his reasons were genuine.

Dutton didn’t say much at the cabinet meeting. Pyne says he never heard Dutton say in any private or public forum that he was opposed to the NEG. Other cabinet ministers confirm this.

Pyne was bemused by Dutton’s lack of engagement. But he put it down to the fact that Dutton had been a policeman – a typical Queensland cop who thinks everyone is guilty of something, so doesn’t talk much, implying that still waters run deep when they don’t run all that deep at all.

Pyne and Turnbull had discussed the leadership a number of times during the week leading up to the emergency cabinet meeting. Pyne thought Dutton was ‘utterly unelectable’, rating at single digits in the popularity stakes. Like himself. And he bursts out laughing when he tells me this. He could not understand how anybody with such a low rating could even think of launching a challenge. ‘None of the normal people in the party room thought they could win with him as leader,’ Pyne says. Turnbull shared Pyne’s view: Dutton was unelectable. He did not believe for a moment, and never had, that anyone, including Dutton, could seriously think Dutton was leadership material.

Pyne did not like Dutton’s Ray Hadley interview on Thursday saying he would quit cabinet if he disagreed with policy; he did not like Friday morning’s Telegraph story; he did not like the fact that it took so long for Dutton to respond to it; and he did not think Dutton’s tweet killed it. He thought it was ‘lukewarm’ and said the barest-possible minimum.

Pyne had concluded it was time for the government to stop self-lacerating over the NEG. He told his colleagues at the meeting, ‘We can keep dragging our bloodied stump across the political firmament, leaving a trail of gore behind us, or we can cut our losses and move on.’

Dutton said nothing. Pyne thought, no, he is not getting away with not being called on to commit to the new cabinet position, which was effectively to abandon the NEG. So Pyne addressed himself directly to Dutton. ‘Peter, the one person who has not spoken is you. You are the one person we need to know whether you support the cabinet position or not?’ Dutton said he agreed with it.

Pyne also asked Dutton bluntly what he expected them to say when the media asked them about his leadership ambitions. Dutton replied that they should refer them to his tweet, which he reckoned had quashed the story. Others joined in, but Dutton denied anything was happening.

At the cabinet meeting the next day, Julie Bishop also addressed the herd of elephants stampeding around the room. Bishop urged her colleagues to get on with it and to set their differences aside.

Turnbull held a press conference with Morrison and Frydenberg on Monday before question time in parliament to announce that the NEG was on life support, that the emissions component would neither be regulated nor legislated, that the states should press ahead with the reliability guarantee, and that the federal government would concentrate on measures to get prices down, in line with recommendations from the Australian Competition and Consumer Council.

Under questioning, Turnbull said the emission target would be legislated, but would not be presented to parliament while it was obvious that the votes were not there to get it through. In Turnbull’s view, this was not tantamount to killing or dumping the NEG, but leaving it as a live option if or when it became clear that the rebellion had been quelled and the numbers were there to pass it.

The press conference wound up with a question to Turnbull, asking him if he had spoken to Dutton and if he had his support.

Turnbull replied, ‘Yes, absolutely. Peter Dutton was at our leadership group meeting this morning, and he was at cabinet last night. He’s a member of our team; he’s given me his absolute support.’

That last bit was a dead-set clue. Whenever a politician pledges his or her absolute support, you definitely know it’s on.

It was a mess. The differences in the party appeared irreconcilable. To Trent Zimmerman, it looked like Turnbull was doing everything possible to avoid doing a deal with Labor. ‘He was scarred by the events of 2009,’ Zimmerman said. He thought Turnbull was being seen to bow too often to the right, and should have ploughed on. ‘Make or break would have been better,’ he said.

When Zimmerman said that to a cabinet colleague, he was told that Turnbull’s strong view was that he did not want to be in a position where he could not rely on his own numbers.

Whereas Zimmerman thought Turnbull was giving in too much to the right, others thought he was giving in to the left: to Ben Morton, it looked like a repeat of 2009, when Turnbull was looking too eager to give in to Labor’s demands. After question time that day, under persistent questioning from Labor, during which Turnbull said that the NEG would not be presented because the government didn’t have the numbers in the parliament, Morton says he didn’t have a clue what the government’s energy policy was.

Although most MPs believed the situation was dire, they did not think anything major was imminent. They knew the monkey-podders were agitating, even more than usual, but they did not think Dutton was ready to make his move. While there were those urging him on, others had assumed that the stories over the weekend were beat-ups.

Tim Wilson was the only backbencher I spoke to who thought, as he went into Tuesday’s party meeting, that given the choices he faced, Turnbull himself might pull on a leadership spill.

There was one other person who thought Turnbull might bring it on, and that was Peter Dutton.

Dutton knew that Turnbull loved the element of surprise. Dutton rang a couple of close colleagues, including, I believe, Cormann, on Monday night to see what they thought. The consensus view of Dutton’s friends was that it was unlikely because, as Dutton so colourfully put it, ‘He would blow himself up.’