Last Tuesday should have been an excellent day for the federal Liberal-National coalition opposition and its leader, Malcolm Turnbull.

On Tuesday the Reserve Bank of Australia announced a 0.25 percent increase in official interest rates (an increase the commercial banks quickly added to their interest rates within days).

The government tried to put a positive spin on this outcome by arguing that it confirmed the soundness of the Australian economy and the success of its stimulus package.

The Opposition argument all along has been that both the stimulus package and the great outpouring of government money in infrastructure projects ran the risk of putting upward pressure on interest rates. The Reserve Bank’s decision to raise rates confirms the Opposition’s argument.

So, on the day that rates were raised, the Coalition should have been on the attack and Mr Turnbull should have been in the luxurious position rarely accorded to an opposition leader of being able to say ‘I told you so’.

However, instead of seeking to return the electorate’s attention back to the economic debate, the Liberal and National parties were in the midst of a leadership crisis.

Moreover, the crisis was brewing over what the opposition should do about the Rudd government’s Emissions Trading Scheme (ETS) that is due to return to the parliament in November.

To recap: the fate of the ETS in the parliament is important because its defeat for a second time might give Kevin Rudd the opportunity to call an early election.

Mr Turnbull clearly seeks to avoid giving Rudd any such opportunity and has proposed that the Liberal party use its Senate numbers to try to influence the government’s legislation.

The hope would be to impose some Liberal perspectives on the government’s program in exchange for having the necessary bills passed before Mr Rudd attends an international forum on climate change in Copenhagen in December.

All of this is quite prudent. Turnbull would know that, once the enabling legislation passed the parliament, the ETS would then become the government’s problem.
The opposition, meanwhile, could concentrate its efforts on one of its potential strengths, namely, economic policy.

Turnbull’s problem is that there is a conservative rump in the coalition that does not accept that an ETS is inevitable.

In a sense, these people are not accepting the outcome of the 2007 election. The Labor party clearly campaigned on this matter and received a mandate to pursue climate change policy.

The point here is that those in the Liberal and National parties who are so fundamentally opposed to the idea of an ETS that they are prepared to send the Liberal party into a crisis over its leadership, are displaying an extreme form of self-indulgence.

In the case of people like Wilson Tuckey, this is based on the fact that he holds a very safe Liberal seat and so will not experience the electoral consequences of his public campaign to embarrass Malcolm Turnbull. Barnaby Joyce is another of Turnbull’s critics, but he isn’t even in the Liberal party.

In doing this, Tuckey, Joyce and a handful of others are risking the future of their colleagues who hold marginal seats, for they will be the first to go when voters swing to Labor in large numbers at the next election in reaction not to the ETS, but to the spectacle of the Liberal party being in such disarray over its leadership.

The wiser course of action would be for these Liberals and Nationals to accept the result of the 2007 election, and follow Turnbull’s very wise strategy of using the coalition’s advantage in the Senate to mitigate what they see as the worst aspects of the program, but, in the end, let the thing pass and let Mr Rudd and his colleagues take responsibility for their ETS.

If, as seems likely, the Australian economy is about to be hit with recurring interest rate rises, the Rudd government ought to be looking at a difficult period ahead. By wasting their time in trying to stave off an ETS, the coalition conservatives are simply damaging their own parties’ electoral prospects.

Dr Economou is a senior lecturer in Politics at Monash University.