‘A strike against Malcolm Turnbull, Scott Morrison and Peter Dutton’: cabinet furious after leak

PM is holding his ground

Senior ministers believe a cabinet leak that revealed the Turnbull government considered reversing its opposition to a banking royal commission was designed to damage Malcolm Turnbull, Scott Morrison and Peter Dutton and create chaos in the government.

Prime Minister Malcolm Turnbull once again slammed the door shut on a banking royal commission on Wednesday, while Treasurer Scott Morrison admitted “that cabinet from time to time would consider these sorts of issue”.

Reports of the leak suggested Mr Turnbull and Mr Dutton canvassed a shift to support the inquiry, whereas Mr Morrison argued against the move. Cabinet ministers contacted by Fairfax Media were furious about the leak to News Corp, with one suggesting “someone is trying to create tensions between us that are not there” and another insisting “there is no animosity in cabinet”.

A second cabinet minister said it was correct some ministers had canvassed dropping the government’s opposition to an inquiry –  and that it would have been extraordinary had it not been discussed, given a push for the inquiry from the Nationals – but the discussion had actually been “workman-like and calm”.

A third minister said that “people are seeing this as a strike against the PM, Morrison and Dutton. This does not play well for any of them and just creates tensions. It has been interpreted as a third party”.

Mr Turnbull said on Wednesday that “we’re not having a banking royal commission…what we are doing is taking action right now. We are establishing a one-stop shop so people can get their complaints resolved. Greater regulation, greater accountability”.

There is a growing recognition among MPs in the Coalition government that Mr Turnbull’s position as Prime Minister, given he has now lost 23 Newspolls in a row, could be terminal.

Cabinet ministers have sounded out backbench MPs about who they would support if there was a need to change leaders.

But according to MPs in and outside the ministry, from across the conservative and moderate factional divide, there is little appetite for a change of leader because of the high transaction cost that would entail.

The byelection in the seat of Bennelong is shaping as a key test for Mr Turnbull: if Liberal John Alexander is beaten by Labor candidate Kristina Keneally in the relatively safe seat, which would also reduce the Turnbull government to just 74 of 150 seats on the floor of the House of Representatives, then “all bets are off”, as one MP put it.

Several ministers told Fairfax Media that, in hindsight, it may have been easier for the government to back a banking inquiry rather than spend political capital defending the unpopular major banks.

The discussion in cabinet came against the backdrop of Nationals senator Barry O’Sullivan preparing a bill to establish a commission of inquiry into the banks, which will have the same powers as a royal commission but report to the parliament, not the executive.

To establish the inquiry, 76 votes would be needed in the lower house to suspend standing orders and pass the bill, meaning two Nationals would have to cross the floor and side with Labor and the crossbench. George Christensen has already indicated he wants to do this and another MP, Llew O’Brien, is a 50-50 prospect.

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