THE Nationals will be stripped of the trade portfolio in government for the first time in almost 60 years because they are deemed too protectionist to spearhead an aggressive free trade and foreign investment agenda planned by Liberal leader Tony Abbott.
The decision, which has the approval of Nationals leader Warren Truss, has angered other Nationals who feel the minor Coalition partner is being increasingly sidelined.
Some warn that if the party is pushed too far, it could fuel a split between the partners like that which occurred in Western Australia.
The Nationals lost the trade portfolio in opposition when Brendan Nelson was leader after the 2007 election. It is held by Liberals Deputy Leader Julie Bishop, whose primary job is foreign affairs spokeswoman.
This week, Mr Abbott said that if he won the election, Trade and Foreign Affairs would remain separate ministries.
Ms Bishop would retain the senior role of foreign affairs while a Trade and Investment portfolio would be created with a heavy emphasis on attracting foreign investment and bilateral free trade agreements.
Senior Coalition sources told The Australian Financial Review that although the Nationals had held the trade portfolio in government since John “Blackjack” McEwen in 1956, the party’s oft-stated difficulty with foreign investment and trade liberalisation led to the decision to put a Liberal into the portfolio.
“It’s not going to be a Nat. You need [someone who is] not a protectionist,” one source said.
Most likely, the Trade and Investment spot will be filled by finance spokesman Andrew Robb. This would allow Mr Abbott to promote Senator Arthur Sinodinos to finance.
One Nationals MP said Mr Abbott and Mr Truss risked causing a split because the policy approach being embraced by the Coalition leadership would lead to more independents being elected in bush electorates.
He said the Nationals were already unhappy with Mr Abbott’s $5.5 billion a year paid parental leave scheme, which he called “a heap of shit”, and the proposed $2.5 billion a year company tax cut.
Also, Mr Abbott’s big-picture infrastructure promises were focused on major road projects to alleviate congestion in the capital cities.
“None of this does any good for our people,” he said.
Taking trade from the Nationals would send further negative signals, warned another.
“They could create a schism between the two parties,” he said.
“We could step away from the Coalition like they did in WA.”
The Coalition’s trade policy will be released later in the election campaign but Ms Bishop has outlined the philosophy in an article for the Lowy Institute.
It says: “Our focus will be on economic diplomacy” which involves ramping up foreign investment, signing free-trade deals with China and Japan, and making deals with others in the region.
“While our standard of living relies on the capacity of our producers and manufacturers to export our goods and services across the globe, we need to capture the opportunities presented by the growing economies in our region,” she said.
“A key pillar will be a renewed focus on finalising Australia’s current free-trade agreement negotiations and building a network of bilateral and regional FTAs to broaden and diversify our trade relationships.”
“Australia and New Zealand both commenced FTA negotiations with China in 2005, with New Zealand concluding its negotiations in 2008 while there has been little appreciable progress on an Australia-China FTA under Labor.”
Ms Bishop says the “ongoing failure” of the Doha negotiations to forge a global free trade agreement “makes it more critical for Australia to build a strong web of bilateral and regional FTAs”.
On Wednesday, Mr Abbott softened his previous pledge that there would be no changes to his frontbench if the Coalition wins the election. He has opened the door for some change, including shifting Mr Robb.
The Financial Review also understands that current opposition spokeswoman for ageing and mental health, Concetta Fierravanti-Wells, and spokeswoman for employment participation, Sussan Ley, may be removed and replaced by Senator Michaelia Cash and MP Kelly O’Dwyer.
It is understood Mr Abbott is unhappy at Senator Fierravanti-Wells, who, as a leading player in the NSW Liberal Party’s hard right faction, put into the marginal Labor seat of Greenway the gaffe-prone candidate Jaymes Diaz, against Mr Abbott’s will.
Greenway is the most marginal Labor seat in Western Sydney. Mr Diaz, who failed to win in 2010, will struggle again to take it from Labor and Mr Abbott is not impressed.
A JWS/Financial Review poll showed Mr Diaz was unpopular with voters and Labor was just ahead in the seat.