Nationals extract their pound of flesh from Turnbull

The Nationals, who have previously been suspicious of Malcolm Turnbull, have used the negotiation of a fresh Coalition agreement with the new prime minister to extract a range of concessions.

Turnbull has promised a sympathetic re-consideration of the “effects test” - which lowers the threshold for proof of anti-competitive behaviour by big business - and to transfer water policy from Environment Minister Greg Hunt to Agriculture Minister and deputy Nationals leader Barnaby Joyce.

Announcing the new agreement Nationals leader and Deputy Prime Minister Warren Truss admitted there had been policy differences in the past between the Nationals and Turnbull – who was opposition leader before Tony Abbott. Truss said he was now comforted some of these were resolved.

He said this was the first time there had been a side letter with a Coalition agreement, which deals with the share of ministries. The negotiations, conducted before Turnbull was sworn in, had been intense and there had been concessions gained by the Nationals.

Recently the effects test, a competition policy reform proposed by Small Business Minister Bruce Billson but opposed by Treasurer Joe Hockey, some other ministers and big business, was put aside by Abbott for further consultation because of the divisions.

Truss said the matter would have to go to cabinet but the Nationals supported Bilson’s proposal. The Nationals federal conference at the weekend passed a motion calling for an effects test, which would give greater protection to farmers and small businesses from big companies.

Meanwhile in the Senate on Tuesday Nationals Bridget McKenzie, John Williams and Matt Canavan supported a motion from the Greens calling for an effects test to be included in competition policy. The Liberals opposed it.

The transfer of water policy includes responsibility for the Murray Darling Basin Authority. But Hunt would retain power over water covered by the biodiversity legislation.

Other commitments in the agreement include the maintenance of existing policies on climate change, carbon taxes and emissions reductions targets.

Turnbull has pledged to ongoing funding for communications technology; establishment of a new jobs program for areas of high regional unemployment; support for infrastructure investment including for inland rail; and a plan to overcome financial barriers that regional students have in accessing higher education.

The agreement also covers increasing family tax benefit B payments for stay-at-home parent families with a child below the age of one.

It covers maintaining the existing policy to refer the same sex marriage issue to a popular plebiscite next term. Turnbull had already given this commitment to conservative Liberals as he sought their votes for the leadership.

Shadow treasurer Chris Bowen said day one of Turnbull’s leadership had seen the government split in the Senate over an effects test and the new prime minister do “a dirty deal with the National Party that includes his imprimatur for an effects test”.

Turnbull had “done a deal to hand control of an important lever of economic policy, in the effects test, over to the National Party.

“Here we have this chaotic situation where the Prime Minister, Small Business Minister and the National Party support an effects test, while Liberal party senators have this afternoon voted against it.”

Bowen said the last thing business investment needed was poorly thought-out changes to competition legislation being pushed by the new Prime Minister and the Small Business Minister.

“With a lame duck Treasurer in no position to put an alternative position, the National Party has seemingly won the day and is, again, the tail wagging the Coalition dog.”

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.