MALCOLM TURNBULL NEW OPPOSITION LEADER

UNCLAS SECTION 01 OF 02 CANBERRA 000915

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV AS
SUBJECT: MALCOLM TURNBULL NEW OPPOSITION LEADER

REF: CANBERRA 901


1. (SBU) SUMMARY: In a leadership vote by the Liberal Party
federal caucus on September 16, Shadow Treasurer Malcolm
Turnbull beat incumbent Liberal Party Leader Brendan Nelson
45-41. He is now the head of the Liberal Party and
Opposition Leader in the Parliament. After former Treasurer
Peter Costello stated on September 11 that he had no interest
in the Liberal leadership (reftel),it was generally assumed
that the ambitious Turnbull would challenge Nelson before the
end of the year. Nelson, sick of leadership speculation and
hoping to catch Turnbull offguard, called for a vote on his
leadership. The result is a defeat for the Right Wing of the
Liberal Party, as well as for Costello, who campaigned for
Nelson. Turnbull must now attempt to unite a divided party
and choose a shadow ministry. END SUMMARY

NELSON SHOCKS COLLEAGUES


2. (SBU) At 5:00pm on September 15, Nelson shocked colleagues
by calling a Liberal Party caucus meeting for 6:30pm that
day. At that meeting, Nelson gave an emotional speech in
which he lashed out at the "undermining" of his leadership
and called for a tougher stance opposing the Government's
plans on emissions trading. He announced that he would be
declaring the leadership vacant at the following morning's
regularly-scheduled caucus meeting. Later that evening,
Turnbull confirmed he would be standing. The hastily-called
ballot was evidently a tactic to catch Turnbull off-guard and
limit his ability to accumulate support. Turnbull had just
returned on Sunday, September 14, from a family holiday in
Europe and he reportedly had no intention of launching a
leadership challenge for at least two weeks. He had judged
that it would be in his interest to be a team player during
the media fallout from this week's launch of the Costello's
memoirs.

GAME ON


3. (SBU) With less than a day until the ballot, Turnbull and
his supporters refrained from addressing the media, instead
assiduously working the phones to gather numbers. Nelson
made few calls to supporters, relying primarily on his caucus
speech, which both camps agree was one of his best. Several
MPs publicly declared their support for Nelson, including
Costello supporter (and former Costello adviser) Senator
Mitch Fifield. Nelson's supporters argued that with Costello
no longer looming in the background, Nelson deserved time to
prove himself in "clean air." Costello himself, who has made
no secret of his dislike for Turnbull, voted for Nelson,
although he did not publicly reveal this.

TURNBULL TAKES OVER, NELSON GOES TO THE BACKBENCH


4. (SBU) Following a short meeting of Liberal MPs and
Senators at 9:00am on September 16, it was announced that
Turnbull had defeated Nelson 45-41. At his press conference,
Turnbull said he believed in the Liberal values of
opportunity, freedom and fairness. He declared the role of
government is to help people achieve their best, as opposed
to Prime Minister Kevin Rudd who "believes government knows
best." Turnbull also attacked the Rudd government's lack of
"strong leadership" on the economy. He said he had asked
Nelson to accept a position in the new shadow cabinet but the
former Opposition Leader had declined the offer.

GOOD NEWS FOR THE LIBERAL PARTY


5. (SBU) COMMENT: This change will help the Liberal Party.
Nelson showed no likelihood of improving in the polls, and a
victory by him would not have ended leadership speculation.
Qvictory by him would not have ended leadership speculation.
Importantly, the media appear to regard Turnbull, unlike
Nelson, as a serious contender. Turnbull was authoritative,
forceful and persuasive at his press conference following the
vote and he appears to many observers to have the intangible
qualities of leadership that Nelson lacked. On the other
hand, the impatient, abrasive Turnbull could learn from
Nelson's consultative approach with his colleagues.
Turnbull, having won by such a slim margin, will have to try
to unite the Liberals, something Nelson (who defeated
Turnbull by a similar margin last year) was unable to do.


6. (SBU) COMMENT CONTINUED: Turnbull is very popular with the
business community and his election as leader (along with the
ascension of the Liberals in Western Australia) should
dramatically improve Liberal Party fundraising. Turnbull is
a strong supporter of Australia becoming a republic, and in
the 1990s famously led the republic fight, ultimately losing

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to then Prime Minister John Howard. As Costello noted today
at an event promoting his memoirs, a majority of Liberal
Party members are monarchists and Turnbull will have to
reconcile his beliefs with theirs, if he decides to pursue
the issue. Turnbull, a social and economic liberal, will
most likely stick closer to the government than Nelson did on
climate change and social issues, but he will look for ways
to differentiate the Opposition's position on emissions
trading. His main weapon against the Rudd government will be
economic management.


MCCALLUM