Well that was fun!

We should also point out that David Littleproud was going to have to lose two shadow ministers which was not good for his numbers in the party room so pulling the nuclear cord (in more ways than one) has saved him from some internal issues as well.

As more than one Nat has said to me in the last couple of hours “this is beyond stupid and also we will do absolutely nothing but probably expose who our weakest members are” so that is something!

Thank you to all who joined us for what ended up being a very lol-worthy afternoon. We will be back with you soon. Until then, you can find me in the New Daily tomorrow on this issue and as always – take care of you. Ax

Can the Liberals win without the Nationals?

Sussan Ley:

We are always strong when we work together. In 1996, the Liberals could have governed without the Nationals, and John Howard took a strong and principled approach that the Coalition mattered in the long-term more than one term in government where the Liberals effectively could have given without the Nationals. That is exactly the approach I will take.

And she is outty.

What about the Nationals wanting to be able to freelance on Coalition policy even if they were part of the shadow cabinet?

Sussan Ley:

Cabinet solidarity is very important and unless I, as leader of the Liberals, could be sure about that, it was important that we didn’t take those next steps. And as I’ve said, I wasn’t assured of that with issues that may divide both members of their party room and members of our party room in the future.

So it is not a new set of arrangements that fierce debates are had both within party rooms and within and around the shadow cabinet table and the cabinet table. Having participated in many myself over the years, I know this.

But then you come out as a united front and you present a united agenda to the Australian people. And it’s important that when we do that, people know that we’re acting as a team in their interests because while today is a lot about internal processes, we must never forget that we are here for the people who voted for us and those who did not, to present a very strong, positive alternative agenda that meets them where they are, and to continue to work incredibly hard for the Australian people every day.

Sussan Ley says her door is always open (the Coalition is looking more and more like a couple that breaks up and then has to keep living in the same house but in different rooms)

It was important for me to have a full party room meeting. Obviously that was via teams. There’s so much is these days. But just to inform, very frankly what the steps I took were the approach that I had and that was supported by my leadership group that’s in place now of Senator Ruston, Senator Cash and Deputy Ted O’Brien.

So we were as if you like the four of us working through the different iterations and suggestions and discussions between David, I and obviously his party room.

So it was important for me to transmit to my party room what happened. And I had, you know, strong messages of affirmation, but I did want to explain that this was not something that I did peremptorily or with any sense of satisfaction. It really wasn’t. It really isn’t. I am disappointed, I do want the Coalition to come together, and obviously this means for the Liberal Party that the shadow ministerial positions will be filled by liberals. And I have much talent in my party room. But that, if you like, is secondary to the fact that we won’t be forming a coalition, but we want to and we remain open to it.

Sussan Ley:

I don’t actually see the Coalition as a way of the two parties being shackled together. I really believe that the Coalition is stronger together. I am a committed coalitionist. When I came into that party room in 2001, the Coalition consisted of John Howard as Prime Minister and John Anderson as deputy Prime Minister. And I saw how well it worked when it worked together.

But I do pay tribute to my Liberal Party colleagues in this room now, and their intention to work constructively for the future with new and different policies, but never stepping away from our timeless values.

Our policies may change our values never will. But we need to give that process due diligence. And I, as leader, want to harness the real initiative, interest, talent and the smarts of so many.

In my party room we want to contribute to a strong public policy agenda that meets the Australian people, where they are recognising the enormous loss that we suffered

Sussan Ley is now out

The Liberal Party must respect modern Australia, reflect modern Australia and represent modern Australia, and Australians sent us a clear message at the last election and we are listening. We will take the time to get this right.

We’ll listen, we’ll step up, we’ll modernise and we will rebuild. And it is with that undertaking from my party room and with my conviction and determination to get it right with respect to policies that I had front and centre with my conversations with David.

And while I have enormous respect for David and his team, it is disappointing that the National Party has decided today to leave the Coalition. But the most important thing I want to say is this the nationals door remains open and our door remains open and we look forward with optimism to rejoining at some point in the future.

And as David and I left today, we agreed that he and I would continue to meet regularly and to talk because we have much in common. We both have a big job to do to take the fight up to Labor. Now, as liberals, we do respect the decision that the nationals have made and our door remains open. Now the nationals sought specific commitments on certain policies, and they’ve talked about that this morning and our perspective is not about the individual policies themselves, but the approach that we said we would take to our party room about policies. Nothing adopted and nothing abandoned.

So at this point in time, I asked the Nationals to respect those party room processes. And similarly, I would respect their attachment to the policies that they announced as very important to them. But our approach, nothing adopted and nothing abandoned.

So we offered to work constructively with the Nationals, and we asked for that respect in return, in good faith, I proposed that we stand up a joint shadow ministry consisting of Liberal Party shadow ministers and National Party shadow ministers, and that we go forward in a united way and that we then work separately on policies, as we should, in our separate party rooms and come together articulating what those policies are at the right time, over the course of the next term.

The National party did not agree with that approach.

Is Michele Bullock confident this is the right move?

I think we what we can say is directionally, we’re confident that was the right thing to do. How confident are we that we know what’s going to come and what we might have to do in the future? That’s, I think, where the uncertainty comes in. And also, as I said earlier, the unpredictability. But it is hard to be confident.

We do have to try and look into the future forecasts, figure out where we think things are going to go. But it’s difficult means we have to be agile and it means it means we have to be alert to the risks. And these days, and, you know, my central bank counterparts are the same. Everyone’s talking about. We need to be thinking about how we’re using what we call the soft data. So this is like surveys, liaison things that might give us a bit of a handle on how businesses are thinking, how consumers are thinking, you know, overseas, we’ve seen quite a quite a lot of uncertainty finding its way into businesses and consumers.

Not so much here at the moment. I have to say. So these are the sorts of things we’ll need to be alert to. But yes, more uncertainty than usual. But I still think in those circumstances we can say we’re confident we did the right thing

Does RBA Governor Michele Bullock think there will be a recession? Maybe. If everything internationally (that means Trump) goes to absolute sh*t.

Bullock:

If you look at our scenario analysis, it does suggest that in a really bad outcome, there would there could possibly be a recession. Yes. But that’s in the very extreme circumstance. And again, it was to try and give ourselves some sort of spectrum of outcomes that we might be looking at at the moment. We’re not looking at that, but we need to be alert.

Monetary policy is a tool that takes a long time to work. Economists like to say it has “long and variable lags”. This means that rather than setting interest rates for today’s economy, the RBA needs to set them for what the economy is going to be next year.

This of course makes conducting monetary policy really difficult. But it has been obvious for more than a year that inflation had been controlled.

The big spike in inflation has largely been caused by international supply side impacts and inflation across the globe has gone up and come down at roughly the same rate.

But today’s interest rate cuts won’t fully impact the economy until next year. This is why we have been so hard on the RBA. They have been too slow to cut rates.

Interest rates are currently at levels that are call ‘restrictive’. This is more central bank talk that means interest rates are high enough that they are slowing the economy.

With inflation under control, the RBA needs to move interest rates to a neutral rate as soon as possible. Neutral means rates are neither slowing nor expanding the economy.

Back to Jim Chalmers now where he is asked about how long he thinks the Coalition split will last and says:

I think it remains to be seen how long this lasts. It is a seismic event in our political history. I think that’s really clear. And I think it shows that the most basic elementary test here has been failed and failed and fallen at the first hurdle. And so, as I said before, I mean, it is rare.

But as I said before, it’s consequential because the divisions in the Coalition were unable to be reconciled. And I think it does show that the former coalition parties learned nothing from the election result. They’ve learned nothing from the last three years. They’re focused inwardly on themselves while the Albanese government is focused on governing. So it’s a nuclear meltdown. They are a smoking ruin. And I think developments today made that really clear.