The Baillieu crisis is good for Abbott

A 'chaos' narrative of the type dominating federal politics doesn't fit Ted Baillieu's resignation. Most likely, his move will look shrewd by the time of the federal election.

The Victorian Liberal Party appears to have pulled off a spectacular trick – every bit as daring as pulling a tablecloth sharply from under a set table of crockery. And as with that old trick, the strong likelihood is that nothing is broken, and every cup except former Premier Ted Baillieu is in the same place as before.

The breaking news story of Wednesday evening caught everyone by surprise. After a couple of shocking weeks – a disappointing opinion poll result, the leaking of secretly taped conversations suggesting corrupt actions by senior Coalition figures, and the rising pressure of a Liberal backbencher who may be about to be charged for rorting expenses – Ted Baillieu just walked out and told cameras he'd had enough.

There is near unanimity that the affable Baillieu is a lovely chap, a man of principle, and (therefore) not cut out for politics at all.

His party is attempting to hold back a tide of public opprobrium following deep cuts to TAFE funding, a pay dispute with school teachers, and the ugly war with federal health minister Tanya Plibersek over health funding shortfalls.

So when 'colourful' backbencher Geoff Shaw resigned from the Liberal Party yesterday, thereby reducing the government's majority to one vote, Baillieu was obviously not too hard to convince that he should go. A party room meeting decided that long-standing MP and former opposition Denis Napthine should take over the top job.

Goodness. It all happened so quickly.

Nonetheless, it's likely that in the days ahead this move will be seen as very shrewd. It leaves 18 months for Napthine to rebuild the Coalition's electoral hopes, and more than six months for the affair to blow over before Tony Abbott makes his final sprint for the Lodge in Canberra.

The initial press reaction has, understandably, been to reprise the 'chaos' narrative that has dominated federal politics, to claim the Victorian government is in crisis and likely to collapse.

That might be so, but is less likely than most think. Geoff Shaw's motivation for resigning is not 100 per cent clear, but seems to be based on a desire not to be part of Baillieu's government. With Ted gone, there is speculation he will be coaxed back into the fold.

If the Coalition cannot do that, then opposition leader Daniel Andrews is right to say that every piece of legislation will potentially be held to ransom by Shaw who, reportedly, sees the legalisation of abortion in Victoria as a wrong that needs righting. Whether those reports are correct will come out in the weeks ahead.

So yes, there is a wild card in all this. However, there are good reasons to think that most objects will land back on the table just as they were.

Firstly, Napthine has ministerial experience across several portfolios, has been in parliament since 1988, and even weathered two years as opposition leader before being deposed by Robert Doyle in 2002. He's a safe-ish pair of hands who is unlikley to attract too much attention during Abbott's tilt for the prime ministership in Canberra.

Secondly, while the government he will lead is unpopular, it is one of only two governments in Australia continuing to forecast budget surpluses – the other being the Barnett government in Western Australia, which goes to the polls this Saturday. And unlike Western Australia, Victoria has balanced the books despite state tax revenues spiralling downward for some time.

Having a budget surplus, yet being hated by voters, might not seem such a good thing, until one considers the federal-state relationship. Napthine will have one strong message to sell, running something like this: "We've made the tough choices to balance the budget, and hoped the federal government would help that process – but they've frustrated us every step of the way!"

Blaming the feds alone won't help, but Napthine can then follow up with: "When Tony's in the Lodge everything will be okay – trust me!" (Cue nervous giggling.)

Abbott won't have pots of money to help boost the ailing Victorian economy (which has been in recession for nine months), but he will at least offer to smooth relations over health funding and GST distributions. Plus, despite the straitened times, he may still promise federal money for key infrastructure projects.

Nobody knows what Geoff Shaw will do next, and what level of support, if any, he offers the Napthine government from the cross benches. That said, Shaw is no friend of Labor's, and if one had to bet on what will happen between now and the November 2014 election, the collapse of this 'government in crisis' should get long odds.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles