Grattan on Friday: Abbott’s lucky to have a damaged Shorten

Bill Shorten has emerged from the royal commission with wounds that are not mortal for his leadership but serious enough to set it back. AAP/David Moir

Bill Shorten’s appearance at the royal commission into union corruption has not only damaged him but diverted a good deal of attention from the signs of serious division and tension at senior levels of the Abbott government.

To go to the latter first: the week saw Agriculture Minister and Nationals deputy leader Barnaby Joyce explode with anger after a Chinese coal-mining project in his New England electorate was approved; Communications Minister Malcolm Turnbull none-too-subtly call out Tony Abbott’s hyperbole on Islamic State; and both Turnbull and Joyce furious about Abbott’s ban on ministers appearing on Q&A (which some hope might be lifted now the ABC has released tough terms of reference for the inquiry into the program).

The decision on the Shenhua mine rested with Environment Minister Greg Hunt, not the cabinet, which may have given Joyce the feeling of greater licence to denounce it. Even so, his language was distinctly un-ministerial. “I think it is ridiculous that you would have a major mine in the midst of Australia’s best agricultural land,” he said on Facebook.

Joyce’s office maintains his failure to make an expected joint appearance with Abbott in Grafton was a genuine scheduling problem – given his mood, it might have been a good thing he wasn’t there.

To add to Joyce’s angst, former independent member for New England Tony Windsor is making noises about possibly recontesting the seat. Even the threat is enough to raise Joyce’s blood pressure dangerously.

Joyce seethes publicly; Turnbull brings more calculation. Joyce confronts; Turnbull provokes. Tuesday’s speech to the Sydney Institute was a repudiation of how Abbott has handled much of the national security debate – never mind that Turnbull insisted they were on the same page.

Don’t overestimate the IS threat was one Turnbull message, when Abbott says it’s coming for everyone. Remember that people equally committed to defeating terrorism can differ about appropriate measures, Turnbull said, when Abbott casts any disagreement as laying out the red carpet for terrorists. And there was a lot more.

Discontents are rife in the higher reaches of the government, but it is Shorten, not Abbott, who is currently under immense pressure.

Shorten emerged from two days at the royal commission with wounds that are not mortal for his leadership but serious enough to set it back particularly when, despite Labor being in front in the polls, he has not been doing well personally. The revelation he failed to declare that a company which had an enterprise bargaining agreement with his Australian Workers Union (AWU) had financed his campaign director for the 2007 election looked bad.

It’s true that many politicians make mistakes and have to update declarations. But in this case it appears worse because the man was employed by the company, and then by the union, so making the situation less transparent; the EBA relationship could be seen as a conflict of interest; and Shorten made the disclosure only in the last few days. This timing left him open to the claim that he acted when he knew the matter would become an issue at the commission.

The commission heard a lot about the AWU receiving side payments from companies with which it had EBAs. The general accusation was that workers got less than they should because of the cosy relationships between employers and the AWU, which yielded payoffs and more members for the union. Shorten rejected conflict-of-interest allegations, maintaining he and the union did their best for the workers, though sometimes circumstances limited what could be done.

Especially damaging was commissioner Dyson Heydon telling off Shorten for his style of answers. While Heydon framed his criticism in terms of the witness’s own interests and as “a prima facie view”, he was accusing Shorten of being political and talking around questions.

“A lot of your answers are non-responsive,” Heydon said. “You, if I can be frank about it, have been criticised in the newspapers in the last few weeks and I think it is generally believed that you have come here in the hope you will be able to rebut that criticism or a lot of it. I’m not very troubled about that, though I can understand that you are, and it’s legitimate for you to use this occasion to achieve your ends in that regard. What I’m concerned about more is your credibility as a witness.

"A witness who answers each question ‘yes’, ‘no’, ‘I don’t remember’ or clarifies the question and so on gives the cross-examiner very little material to work with. It’s in your interest to curb these to some extent extraneous answers.”

It is being widely speculated that these comments suggest Shorten’s performance as a witness will attract negative comment in the commission’s report, quite apart from whatever is found on questions of substance.

Asked later about Heydon’s casting doubt on his credibility, Shorten said pointedly: “He has a job to do, I get that, it’s Tony Abbott’s royal commission.”

Shorten was reinforcing Labor’s fundamental argument about the commission – that it is Abbott’s expensive witch-hunt against him. In attempting to tend the wounds he is left with, Shorten and Labor will dwell on the obviously political nature of the inquiry.

But that won’t stop a critical report, if that’s what comes at the end of the year, inflicting more harm as the election nears.

What’s out there from the evidence provides a lot of grist for the media and Labor’s opponents. But there is not any instance of illegality, and various company cases are confusing, able to be argued different ways. That may both help and harm Shorten – some people will give him the benefit of the doubt, others will take the “smoke must mean fire” position.

One-time ALP national secretary Bob Hogg has called on Shorten to resign, asking on Facebook: “Is the concept of conflict of interest beyond your understanding?”

Quite a few in the caucus will be feeling a high degree of frustration that the Abbott government is very vulnerable while Labor has relatively ineffective firepower. But Shorten is protected by the party’s rules, the lack of an alternative and the searing that leadership instability previously inflicted.

In the immediate aftermath of this week’s injury, a test of Shorten’s resilience will be whether he can get the focus onto the government’s weak spots. Then he has to manage the ALP national conference at the end of the month. He can’t afford that to turn bad.

Listen to the latest Politics with Michelle Grattan podcast with guest, Race Discrimination Commissioner Tim Soutphommasane, here or on iTunes.

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