Tony Abbott’s leadership under threat – spill turmoil undermines business confidence

Prime Minister Tony Abbott is facing dissension in Liberal Party ranks

Growing speculation Prime Minister Tony Abbott could be replaced as leader of the Liberal Party as early as next week is damaging business confidence, according to members of the small business community.

Liberal backbencher Dennis Jensen became the first member of the government to publicly call for a leadership spill last night, telling the ABC’s 7.30 program he informed Abbott that he “no longer enjoyed my support” more than a week ago.

Jensen called for Abbott to be replaced as soon as possible because the Coalition is “not governing as we should be”.

“There is not strategic direction, the policy is not consistent and coherent,” he said, adding Abbott “hasn’t made the transition [from opposition leader] to prime minister”.

Backbenchers Mal Brough and Warren Entsch have also spoken out about the need for the government to address the leadership speculation, while former Victorian premier Jeff Kennett said this morning the party’s leadership is now “terminal”.

“I think sadly the realisation has dawned on most politicians that where the leadership of the party is now is terminal,” Kennett told the ABC.

“It needs to be resolved as quickly as possible so that the party can move on.”

Foreign Affairs Minister Julie Bishop and Communications Minister Malcolm Turnbull are widely tipped as the front runners if a leadership spill was called. According to Fairfax, Bishop has ruled out mounting a direct challenge for the leadership but has reserved her right to throw her hat in the ring if Abbott vacates his position and there is a ballot.

Turnbull has reportedly told his colleagues the push for a change in leadership is being led by the backbench and he is speaking with colleagues about the government’s position.

Fairfax reports as many as 30 members of the Liberal Party have indicated they would support a leadership change, following a disastrous result for the Liberal and National Party Coalition in the Queensland election last week and the dumping of the Prime Minister’s signature paid parental leave policy on Monday.

Peter Strong, executive director of the Council of Small Business of Australia, says COSBOA members are “lost for words” and “almost in shock that after years of leadership speculation [under the previous government], we’re seeing the same thing all over again”.

“It affects everyone’s confidence,” Strong says.

“It is very disappointing … it saps the energy out of people. The leaders of this country need to stop and think about their style of leadership, backbenchers too, they’re all part of the game.”

“Maybe we need a national roundtable on leadership because voters have consistently let everyone know that if they don’t like something, they will say so at elections.”

Strong applauded the achievements of Small Business Minister Bruce Billson since the government was elected in September 2013 and says it’s clear Abbott has listened to Billson when it comes to improving conditions in the SME sector.

“Billson wouldn’t have been able to do what he has done if that wasn’t the case,” he says.

But Strong says leadership uncertainty can create a situation where “people with money and influence come in and undermine what’s being done”.

While Strong says the small business community doesn’t want to be “seen to be adding to the problem” by commenting on the debate about who should lead the government, he said having certainty is essential for anyone operating a business in Australia.

Kate Carnell, chief executive of the Australian Chamber of Commerce and Industry, shares the same view, telling SmartCompany this morning the latest ACCI business confidence survey, released on Monday, indicated business confidence and expectations are already low.

“What businesses are telling us is one of the major reasons is their concerns that the government’s capacity to deliver on its agenda is under pressure,” Carnell says.

“Leadership instability is even more toxic than the situation in the Senate.”

Carnell says there is “nothing more destabilising to a government than leadership instability, as the previous government showed”.

“This is really a problem. It is happening at a time when interest rates have been cut, petrol prices are lower, and those things will hopefully be putting more dollars in the pockets of consumers, but leadership instability affects consumer confidence as well.”

“We really need consumers to be confident so business can be confident and employ people.”

Tim Harcourt, economics professor at the University of New South Wales, agrees with Strong and Carnell, telling SmartCompany current political instability is building on the uncertainty created by the government’s failure to pass many of the measures contained in its first budget.

“We still don’t have an Abbott budget after 16 months and obviously the instability at the federal and state level is affecting business,” Harcourt says.

“We had Prime Minister Robert Menzies for 16 years. Now we can’t even keep them for 16 months.”