Coalition crisis: The week Sussan Ley stared down Andrew Hastie and Angus Taylor

Sussan Ley is not going to be taken out without a fight.

A week ago the Liberal Party leader was written off by pundits, pollsters and many of her MPs.

By Friday, the 25-year parliamentary veteran and gender trailblazer had managed to flip the political conversation from poor poll numbers and a Coalition breakup to the unfairness of a men-in-suits assault on the Liberals’ first female leader. Andrew Hastie had given up and Angus Taylor had put his ambitions on pause.

“She’s tough,” one close ally said. “She will stare down this small group of the disaffected. They continually underestimate her and that is to their disadvantage, not hers.”

Her win-of-the-week came from whoever tipped off a leading paparazzo, Liam Mendes, who photographed Mr Hastie arriving for a leadership summit in Melbourne with an off-brand paunch and housemates-cum-allies Matt O’Sullivan and Jonno Duniam.

Forty minutes of talks with rival Angus Taylor, watched by Senator James Patterson and former MP Michael Sukkar, produced nothing more than an opportunity for Team Ley to complain about an all-male conspiracy on the day of a female politician’s funeral.

Video and photos of the meeting appeared along footage of a memorial service for the late Liberal MP Katie Allen, which was held shortly afterwards at St Paul’s Cathedral. Conservatives quickly realised the contrasting images — Liberals plotting to bring down a woman, while burying another — was a public relations disaster.

Anthony Albanese, perhaps seeking to shore up his weakened opponent, said the meeting was “astonishing”, even though big political funerals have always been scenes for intrigue.

Transformed

Earlier in the week, The Nightly became caught up in the leadership contest. In a group text to Parliament House journalists, Ms Ley’s office did something unusual: it singled out a satirical column, written by me, as sexist for using a domestic relationship analogy to critique her communication choices.

The leader’s allies, including NSW senator Maria Kovacic, joined the criticism, which was rejected by The Nightly’s editors.

“The article itself has been deliberately mischaracterised by some as a personal, gendered attack on Ms Ley,” the paper said. “It was nothing of the sort. It was in fact a political analysis of the leadership crisis she is struggling to contain drawing on the relationship, widely depicted as a marriage, between the Liberal and Nationals leaders, irrespective of gender.”

On Friday afternoon Mr Hastie, who was said to have one third of Liberal MPs behind him, dropped out of the leadership race, citing a lack of support.

By then, Ms Ley’s position had been transformed.

It was clear her conservative opponents lacked the unity or resolve to remove her from power. She had allocated portfolios previously held by Nationals MPs to existing shadow ministers, an important administrative step that acknowledges the Coalition’s termination while making a reunification less difficult.

Nats’ turn

Attention will now turn to the Nationals, where the man Ms Ley’s supporters blames for the debacle, leader David Littleproud, faces his own challenge on Monday. Persisting with the sexist theme, Liberals accuse Mr Littleproud of being aggressive and disrespectful to Ms Ley in private, which may not be surprising given he said publicly “we cannot be part of a shadow ministry under Sussan Ley”.

One source said, despite unhappiness with Mr Littleproud, no credible opponent has emerged to challenge him at a vote called by little-know MP Colin Boyce. “At this stage David’s position is quite safe,” said the source said. “But the situation is very uncertain. Anything can happen. It might flush out someone who wants the job.”

Like the Liberals, many Nationals would like the Coalition reunited soon. Apart from the embarrassment of sitting on the cross benches in Parliament — the seats between the government and opposition — they are conscious of the practical problems: fewer staff to manage the complexity of parliament, including committees that conduct detailed reviews of proposed laws and question senior public servants.

Ex-shadow ministers will suffer big pay cuts and senators will find it harder to be elected without being grouped with Liberals on the Senate ballot papers.

The cost of Labor

For the Labor Party, the timing couldn’t better. Parliament resumes Tuesday, the same day the Reserve Bank of Australia board will decide whether to raise interest rates. Most economists predict the central bank will begin a tightening cycle that looked improbable six months ago. Many Australians will pay thousands more in mortgage payments.

Credible experts argue the government shares the blame, giving a competent opposition powerful material to use against the government. The Coalition’s collapse will deflect attention from the economy and give ministers an opportunity to ridicule their opponents.

On Friday one of Australia’s top economists, Warwick McKibbin, issued a serious warning: the economy is running too fast and official interest rates will have to rise almost 25 per cent (or 0.9 percentage points) to around 4.5 per cent just to stop feeding growth.

“Monetary policy in Australia is currently too loose, and as a result, inflation is high and rising,” the former Reserve Bank board member wrote on social media. “Previous experience suggests that either the accelerator should be released or the brakes should be applied.”

Professor McKibbin was referring to the Budget deficit, which will be deficit for the foreseeable future under Labor’s big spending programs.

Economics is likely to dominate public life at home this year, while Donald Trump’s unpredictability will overshadow world affairs. The backdrop is important for Liberals as they consider whether to take the fateful step of removing their first female leader.

As an ex-soldier, Christian and nationalist, Mr Hastie was presented as the man to lead the Liberals in a political world reshaped by Mr Trump and his fans.

Now Mr Hastie is no longer a contender, Mr Taylor, an economist and Rhodes Scholar, could return the party to what many members regard as its core competency. Or the party could stick with a self-declared leader of the “sensible centre” who refuses to give up in the face of relentless criticism.

Whoever they choose, that person will need show enormous resilience, cunning and willpower to defeat a prime minister with the largest Labor majority in history.