Australian PM under siege as party rebels seek fresh leadership vote

[August 22, 2018]  By Colin Packham

CANBERRA (Reuters) - Australian Prime Minister Malcolm Turnbull clung to power on Wednesday as rebel Liberal party lawmakers pressed for a second leadership contest just a day after he narrowly survived a challenge from former home minister Peter Dutton.

Turnbull, whose Liberal Party is the senior partner in the coalition government, had won a party-room vote by 48 to 35 on Tuesday, but the unconvincing victory had left him vulnerable to another challenge.

Australian media reported that party rebels were petitioning for another vote as early as Wednesday, and needed just 43 signatories to force a fresh contest. If successful, Turnbull is likely to be ousted without completing three years in power, and Australia will have to pick is seventh leader in a decade.

Dutton said he was canvassing for support to take another tilt at Turnbull, possibly as early as this week.

"I'm speaking to colleagues," Dutton told 3AW Radio. "If I believe the majority of colleagues support me then I will consider my position," he said.

Amid mounting uncertainty over Turnbull's premiership, Governor-General Peter Cosgrove canceled travel plans and will remain in Canberra this week, a source familiar with his schedule told Reuters.

Cosgrove is British Queen Elizabeth's representative in Australia and would need to be on hand to swear in a new prime minister if Turnbull was ousted, or to accept Turnbull's request to dissolve parliament if he decides to call an early election.

The next election is due by May.

Australian newspapers echoed the frustration many voters feel over the constant leadership changes.

"It would be kinder to voters and more in the national interest if Mr Turnbull drove to Yarralumla (Cosgrove's official residence) and called an election a year early," The Sydney Morning Herald wrote in an editorial.

"The big risk is that he might be shafted even before he got to the end of the driveway," it said.

'UNEQUIVOCAL LOYALTY'

The opposition Labor Party has gleefully watched the Liberals internal conflict deepen, with the growing prospect of an early election.

Labor used Question Time in parliament on Wednesday to ask seven of the nine Cabinet ministers who voted for Dutton whether they still supported Turnbull.

All seven had tendered their resignations to Turnbull, who refused them in an attempt to show unity and later said he had been given "unequivocal assurances of continuing loyalty". Dutton and one other opponent were allowed to leave the ministry.

Keen to bring rebel politicians back into the fold, Turnbull on Wednesday also dumped his unpopular plan to cut corporate tax rates to 25 percent from 30 percent.

Australian Prime Minister Malcolm Turnbull arrives for a party room meeting at Parliament House in Canberra, Australia, August 21, 2018. AAP/Lukas Coch/via REUTERS

His plan echoed that of U.S. President Donald Trump but, with record corporate profits and stagnant wage growth, the policy has proved widely unpopular with voters.

"It is clear that the policy was never going to be an election-winning one. There has been some concern within the backbench about policy, it will show them that he is listening," said Rod Tiffen, emeritus professor of political science at Sydney University.

The upper house Senate rejected the policy on Wednesday and Turnbull said soon after he would no longer pursue it.

"We will not be taking the tax cuts for larger companies to the next election," he told reporters in Canberra.

FRACTURED PARTY

Despite Turnbull offering an olive branch, further political instability is all but guaranteed in the final two days parliaments sits before it breaks until September.

The turmoil has upset Australia's financial markets, with the main stock market down nearly 0.5 percent on Wednesday to a nine-day low.

Turnbull came to power in a party-room coup in September 2015 over former premier Tony Abbott, who also survived an internal leadership contest before his eventual defeat.

A social liberal and multi-millionaire former merchant banker, Turnbull rode an early wave of popular support but he has struggled to appeal to conservative voters and only narrowly won an election in 2016.

Progressive supporters have also been disappointed as they watched government policies shift to the right as Turnbull tried to appease a powerful right-leaning backbench.

Dutton, a hardline conservative who carved out his reputation overseeing Australia's harsh immigration policy, is unpopular with moderate voters, raising the possibility that a third, centrist candidate might still emerge.

(Reporting by Colin Packham; Editing Paul Tait & Simon Cameron-Moore)

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