Napthine bracing for battle of his career

Denis Napthine fronted the Liberal Party room, reeling after one of the most tumultuous days in recent Victorian political history. He was about to become Victoria's accidental premier.

Denis Napthine fronted the Liberal Party room, reeling after one of the most tumultuous days in recent Victorian political history. He was about to become Victoria's accidental premier.

"March 6 was my birthday," he recalls. "At 7pm Ted announced he was stepping down. I was elected and I addressed the party that night."

The magnitude of the challenge looming was not lost on the country vet as he stood before his shell-shocked colleagues. He would need to create a sense of momentum by demonstrating tangible results. He would need to strike the right chord with the public and address a series of festering internal and external issues.

Above all, he would need to do it all swiftly. Victoria's 47th Premier had little choice but to roll up his sleeves and move on. This was the message he conveyed to the party room. "I genuinely thanked Ted for his leadership and outlined that we needed to be much stronger in terms of communicating with the public," Napthine told The Age this week. "We did have a plan and a vision and a strong direction for Victoria."

After almost nine months as Premier - one year out from the November 2014 election - has Napthine succeeded in addressing these challenges? And what are the Coalition's prospects as it enters the final year of this political cycle?

The challenges are again piling up. The hospital system remains under stress, jails are full to bursting thanks to a populist tough-on-crime agenda that apparently failed to plan for rising prisoner numbers. Booming population growth has left Melbourne with an increasingly choked road and public transport network. The government's apparent solution - the $8 billion toll road tunnelling across the inner north - has left it vulnerable to claims it has abandoned public transport. The economy remains patchy and the government has little scope to ramp up debt or spending to buy its way out of trouble without jeopardising its prized AAA credit rating.

This is not where Napthine would have hoped to be at this stage. Polls suggest the government, which is relying on the vote of problematic Frankston independent Geoff Shaw, faces the prospect of becoming Victoria's first single-term government since 1955.

As 2012 drew to a close and Parliament began to wind down for the long summer hiatus there was a growing sense of despair in state government ranks about the Coalition's prospects under Ted Baillieu.

MPs were starting to openly complain about what was seen as a failure to sell the Coalition's message. Communication had also broken down internally, with senior colleagues warning of a "culture of secrecy and paranoia" and serious structural problems from within the premier's office. As one senior MP put it, the premier's office was not even operating on a basic need-to-know basis, with senior ministers "often the last to know". Baillieu, many in the party believed, was on track for a thumping loss.

Early in the new year Jeff Kennett - theoretically one of Baillieu's closest allies - added to the sense of panic after publicly criticising the government's communications strategy as "far from good enough".

On the morning of March 6, The Age published a report saying Baillieu was "one or two more stuff-ups" from a leadership spill. The "stuff-up" came that very day with an explosive announcement by Shaw that he would resign from the parliamentary Liberal Party to sit as an independent because he had lost faith in Mr Baillieu's leadership. In an instant, the Coalition went from a one-seat to a no-seat majority in Parliament, leaving it badly diminished.

In the immediate aftermath, Baillieu was defiant, vowing to continue governing "with decisiveness and with courage". At some point during the day his resolve collapsed. At 7pm Baillieu emerged, looking heartbroken, to announce he was resigning as premier "in the best interests of the government".

Details of how Baillieu transitioned from defiance to defeat that day are sketchy. According to one version, upper house MP Philip Davis - who had acted as a power broker when Napthine was ousted as opposition leader in 2002 - told Baillieu he should fall on his sword to avoid a messy leadership spill. While this is true, those close to Baillieu insist Davis' intervention had little bearing on his thinking, claiming the decision came after discussions with close colleagues.

His decision to quit was only voluntary in the sense that Baillieu wanted to avoid a bloodbath and depart on his own terms. A spill would have likely created a divisive contest between ambitious frontbenchers Michael O'Brien and Matthew Guy. The danger was voters would draw a comparison with federal Labor and its disastrous decision to knife Kevin Rudd as PM. According to those close to him, Baillieu's decision to go quietly was seen as the "least worst" course.

Baillieu's single caveat was that his job must first be offered to his friend and ally Denis Napthine. The party room agreed. Napthine was seen as an experienced hand who was widely respected in the party. He represented a compromise that would keep any recriminations to a minimum. Virtually no one predicted his ascendancy. The irony was that when Napthine was replaced by Robert Doyle as opposition leader just before the 2002 election some of the criticisms levelled at him by his detractors echoed those made of Baillieu: he was criticised for being a poor communicator, for being wooden, for mishandling the media, for failing to consult with his own party.

In the 11 years since, according to colleagues, Napthine has improved immeasurably. So much so it is difficult to find a Coalition MP with anything negative to say.

He is lauded for his approach to internal management, including trusting his ministers to make decisions without micro-management. He is also seen as an "instinctive" politician with a sharp intellect who is particularly effective in the regions. He can be charming and goofy, but also combative and aggressive. Kennett says Napthine has injected new life into the government. "There is a very real energy that wasn't there previously and that is more to do with Denis' better appreciation of how a cabinet works, delegating responsibility and an ability to relate to individuals," Kennett says. "He has clearly demonstrated ... he is enjoying the job, which is attractive to voters."

After coming to office, Napthine quickly batted away a series of political challenges including lifting TAFE funding, restructuring the public service and finalising public sector wage deals. Yet Napthine enters the critical final year of the political cycle far from comfortable.

A recent Newspoll had the Coalition losing the next election, with a two-party-preferred vote of 47 per cent compared with 53 per cent for Labor. A previous poll had the government on 49 per cent, to Labor's 51. Liberal strategists, however, say internal polling shows the two-party-preferred vote favouring the Coalition 52 to 48 per cent.

But if the Coalition has challenges, Opposition Leader Daniel Andrews is failing to capitalise, with his net approval rating mired in negative territory.

"The Napthine government is rated very highly on issues such as infrastructure, economic management and law and order," a senior Liberal says. This may be true, but the government is struggling in other areas, including health and education. It is also battling community concern it is backing a single road project at the expense of public transport, health and education.

Monash University political scientist Paul Strangio says history is on Napthine's side - there have been very few single-term governments in Victoria's political history. But other evidence would suggest this is now far from certain. In particular, Strangio says the Geoff Shaw saga has seriously undermined Napthine's authority, particularly last week's decision by Shaw to vote against the government's business program because of a lack of confidence in Speaker Ken Smith.

Although Napthine seemed to turn the government's position around initially, according to the polls the government is now virtually back where it was under Baillieu, Strangio says. "What happened last week in Parliament was a significant escalation of the whole Shaw imbroglio, such that the government's authority is being tested ... This is more than just a distraction."

Nor do Victorians seem to be warming to the Abbott government. What impact this will have is unclear, although there is some nervousness within state ranks.

The danger, as some see it, is that the federal government's political cycle is now badly out of sync with Victoria's. Abbott, who has had a wobbly start, is talking about the need for cuts and prudent financial management as Victoria is entering an election year. There is unlikely to be much federal largesse next November when the state election is due.

The outlook for the state economy remains tentative, although the jobs market is holding up and Victoria is the only state with a AAA credit rating. Institute of Public Affairs executive director John Roskam says the government deserves credit for delivering budget surpluses and maintaining Victoria's credit rating. But he warns reform is urgently needed, particularly with the state so reliant on manufacturing.

"Victoria can't really afford to wait for Tony Abbott to move on industrial relations in his potential second term," Roskam says. "We're particularly susceptible to the structural issues facing the national economy because of our high wage costs and an inflexible industrial relations regime."

The economic challenges facing the Napthine government will be felt keenly in traditional manufacturing hubs such as Geelong, clobbered by the loss of 300 Qantas aircraft maintenance jobs at nearby Avalon airport, Ford's decision to shut down production in the city in 2016 and other cuts.

Then there is Geoff Shaw, who holds the balance of power and, consequently, holds Napthine over a barrel in the Parliament.

The challenge, as Napthine is fond of saying, is to govern as though the Coalition has a 20-seat majority. This is easier said than done. Shaw is due back in court on February 17 on 24 charges for allegedly misusing his parliamentary vehicle. The media circus will continue and the government's legislative agenda will continue to depend on him.

Napthine says he will continue to negotiate with Shaw to get legislation passed but says he won't be "distracted in any way by shenanigans in Parliament by the behaviour of an independent".

This could be wishful thinking. If there was ever a definition of political distraction, it is Shaw. Just as old problems have been batted to one side, new ones have continued to bank up. Such is the nature of modern politics. But as he enters the final round, Victoria's accidental Premier has proven to be far more effective than his predecessor at dealing with inevitable problems. "We are going to fight for every vote, fight for the whole 12 months to convince people we are delivering for people of Victoria," he says.

Whether this will be enough is the big question of 2014.

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