Costello questions what the Turnbull government can achieve

Former Liberal treasurer Peter Costello has raised questions about how much the Turnbull government can achieve given its political situation, and warned of the risk of a defection.

Costello said he had no doubt the government, which has a majority of just one seat, could survive last through the term. But “what will it be able to do? Will it be able to do the big things, like repair the budget, secure the financial position or will it just have to go along with events?”

It would need a working majority within its own side and would also need to find one in the Senate or “the quality of the government will be at risk”, he told the ABC’s Four Corners program Malcolm Turnbull: Man on a Wire.

Costello said the government’s first preoccupation would have to be internal management. Its main problem was that any one or two of its own side could make or break a particular legislative issue.

The biggest danger was that a government member “will threaten to go independent. You know, it’s a very alluring prospect. ‘I’ll threaten to go independent, I’ll get a whole lot of lolly for my electorate, right, and I can still preserve the government if I need it.’ And this is the risk on any particular issue at any particular time – not that these people will cross the floor, but that they’ll threaten to go independent on you. And you are beholden to them.”

Former minister senator Eric Abetz, who was dropped by Malcolm Turnbull, said that “clearly a wafer-thin majority requires the prime minister and the leadership not only to reach out to the crossbenchers but also all elements within the Liberal-National Party coalition, because I am sure they must realise it will only take one person or two in the House of Representatives to cross the floor to defeat government legislation.”

Turnbull has established a group in his office to liaise not just with the crossbenchers but with government backbenchers.

Costello also suggested Tony Abbott still harboured leadership ambitions. Abbott “would think to himself, well others have stayed on and come back”. He did not think Abbott “plans to be a backbencher for the rest of his life”.

Abbott reiterated in an interview with the program that “the Abbott era is over”.

Abetz said Turnbull had made a “strategic error” in not putting one of the senior conservatives – Abbott, Kevin Andrews, or himself – back in cabinet “to run a good ship”, comparing this failure unfavourably with how John Howard had reached out to all elements in the party. It would have been "gracious” if Turnbull had included Abbott, he said.

Abetz said these conservatives “will do whatever we possibly can, albeit from the backbench, to ensure that good Liberal Party principles are upheld, good Liberal Party policy is implemented, and to ensure that Labor does not win the next election”.

Abbott repeated his call for the reform of the NSW division of the Liberal Party to empower the membership and break the hold of factions. He said control by factional warlords, some with commercial interests in dealing with politicians, made for a “potentially corrupt position”.

“The best way to see off the factionalists is to open up the party,” he said.

Former federal treasurer of the Liberal Party Michael Yabsley, a Turnbull supporter, said the NSW party was run by factions and there was a very strong association between the factions and at least a couple of lobbying firms.

He urged intervention from Turnbull to democratise the NSW party. Abbott said he understood Turnbull supported the democratisation of the party.