View from The Hill – It's time for Turnbull to put his authority on the line

As Prime Minister Malcolm Turnbull struggles with the National Energy Guarantee, the Liberals are in an existential moment – no less dramatic because in recent history, they’ve made a habit of such moments.

Are they going to allow a toxic combination of revenge politics, anti-climate change ideology, panic over the Longman result, and sheer muddle-headedness kill the chance of giving certainty to energy investment and tear down or mortally wound their prime minister?

One pro-Turnbull backbencher describes it as a “hostage situation”, with a small number “holding the nation to ransom”. By and large, the backbench is happy with the NEG, this backbencher affirms.

Turnbull now should put his authority on the line over his energy policy, which he’s augmented by concessions and extra price measures.

This doesn’t mean asking for a vote on his leadership, but perhaps it should mean breaking the normal practice of operating by consensus and instead taking a formal vote on the policy at Tuesday’s Coalition parties’ meeting.

Yes, it would be a big risk. Some sources do say there is leadership stirring going on in Liberal ranks. (Certainly, News Corp appears to be helping fuel the situation – it’s a nice irony that a lot of trouble is coming from the government’s favourite media organisation, not the one it so dislikes, the ABC.)

It would be better for Turnbull to take on his enemies than allow his position to be eroded progressively on their timetable, which reportedly is to wait until September, after another bad Newspoll.

If he can’t hold the situation at this point, his grip is only going to get weaker quite quickly.

Turnbull, Treasurer Scott Morrison and Energy Minister Josh Frydenberg have spent the past few days cobbling together initiatives in an attempt to appease mutinous backbenchers. This comes less than a week after the NEG had majority support in the Coalition party room.

Turnbull looks weak and desperate, but had little choice because he could not afford a number of MPs crossing the floor.

The proposed changes include regulating rather than legislating the 26% target for emissions reduction in the electricity sector.

To counter his earlier warnings about a Shorten government easily increasing the target if it were set in regulation, Turnbull said in a Sunday social media video: “we will introduce a new law that ensures that before any new emissions target is set, or changed, the energy regulators and the [Australian Competition and Consumer Commission] must advise what that means for your electricity prices.

"This will ensure that any government who wants to change this, has to tell you up front what the cost will be.”

The revamped package also includes provision for a “price expectation”, with companies that don’t meet it facing penalties, plus a range of other market interventions on power companies.

“We will set a price expectation which should be the most anyone pays,” Turnbull said.

“And if the prices remain too high, we’ll implement the toughest penalties, until you’re getting value for money.

"We will not hesitate to use a big stick, as we did with gas, to make sure the big companies do the right thing by you, their customers.”

These measures will satisfy some critics within the Coalition. They don’t satisfy Abbott – and an unknown number of others.

The dissidents last week included some Nationals but the pragmatists in that party, which had its federal council in Canberra on Friday and Saturday, are anxious for a settlement (that includes a gesture to coal). Nationals cabinet ministers have been embarrassed, however, by being out of the loop as Turnbull crafted his concessions.

All that’s happened vindicates, incidentally, the Labor states and ACT declining to sign on to the NEG until after the party room finalised its position. Those jurisdictions, and federal Labor, have had one of their demands – having the target set by regulation – met, thanks to the dissidents.

After the reports of the change, Abbott was quickly on 2GB on Saturday to stir trouble.

“On Tuesday, in the party room, we were told it is absolutely essential to legislate the Paris target, because if we don’t legislate it Labor can just increase it willy-nilly, and last night it seems we’ve dumped the idea of legislation, for god knows what reason,” he said. “It’s no way to run a government, making absolute commitments on Tuesday and breaking them on Friday”.

While once again declaring he was about switching policy rather than leader, he also posed the question: “Can you change the policy without changing the leader?” Asked if there was going to be “a leadership attempt”, he said: “I don’t know”.

And that takes us straight to Peter Dutton, whose performance last week was highly provocative.

On Thursday Dutton played footsie on 2GB about his possible route out of cabinet. On Friday the Daily Telegraph said he was being asked to challenge Turnbull. On Saturday that paper’s headline was “Dutton Ready to Roll – Minister considers Turnbull challenge …”.

Dutton stayed silent all Friday. Only on Saturday morning did he tweet: “In relation to media stories today, just to make very clear, the Prime Minister has my support and I support the policies of the Government. My position hasn’t changed from my comments last Thursday.”

As they say, too little, too late. Dutton’s long silence had encouraged the speculation. His colleagues will judge (some will know) whether this was political misjudgement or disloyalty.

Turnbull is faced with a highly volatile situation. But how to handle it?

Firstly, Turnbull and his ministers need to get a package out on Monday that can be delivered (do some of the extra measures require state legislation?), is free of glitches, and provides insurgents with minimum opportunities for floor crossing. Cabinet ministers were discussing this over dinner on Sunday night.

Secondly, Senate leader Mathias Cormann, Dutton’s very good friend, should tell his mate, as they take their 5.30 am constitutional in Canberra’s cold, that allowing others to trail his coat is not appropriate behaviour for a cabinet minister.

Cormann might usefully make a couple of other points. Leaders who come to power by the sword often end badly. And if there were a leadership contest, who would know what surprise result might eventuate (who, in 2009. thought it would be Abbott who’d defeat Turnbull)?

Thirdly, Turnbull needs to get strong, articulate backbench supporters of the NEG out there countering the substance of the dissidents’ policy arguments.

And finally, he should press the party room into a decisive stand.

Chancing his arm might at worst backfire, leading quickly to his losing his head. But if so, he would have lost it before too long anyway.