Business Spectator’s Isabelle Oderberg speaks with former Liberal leader John Hewson after the Liberal leadership vote.

ISABELLE ODERBERG: Big day — the Libs have a new leader. What are your thoughts?

JOHN HEWSON: I hope that this does settle the Liberal Party down between now and the next election. I don’t think Brendan Nelson had clear air, I don’t think he was given a fair chance, and the speculation about Costello, which has run for months and the destabilisation, meant probably that he didn’t get heard and he didn’t get traction. I hope now that they do rally behind Malcolm. He’s better able, I think, to get traction and he’ll take a much harder line against Rudd and he needs an opportunity to do that. The fact that the vote was as close as it was was disturbing, but they’ve got to recognise that if they’re going to have any chance at the next election, they’ve got to pull together and reunify.

You have to go back to the Scullin government to find a government that hasn’t had a second term, although some of the second term elections have been pretty close.

Turnbull’s got one chance, I think, and the probability is against him, history’s against him, but the Rudd government might realistically expect a second term, so he’s got a large task in front of him. He’s not policy-driven, he’s more opportunistic, but he’s probably better able to generate a position that gets traction against Rudd. Rudd has not done anything yet, apart from a couple of symbolic gestures. As people have said, he hit the ground reviewing — that’s not good enough. He’s got to take some decisions and I think that as soon as he starts to take them there will be opportunities everywhere for Turnbull to make a mark.

Particularly in the area of the response to climate change and I think more broadly on a number of issues. So, I don’t know how Rudd will respond. I guess there’s every chance that Rudd may say “we’ll be better to go early” and catch him short and not have to face some of the electoral difficulties that will undoubtedly be there, with an emissions trading system introduced at the beginning of an election year.

IO: You mentioned that Turnbull is not particularly policy-driven, but I’m just wondering whether you’re expecting any policy shifts in any specific areas?

JH: What I would hope, I guess, is that Turnbull should take a harder line on climate change. The suggestion from Garnaut that we can start softly, softly, with 10 or 15 per cent for his target in 2020 is nonsense, against the sort of targets Australia has to meet by 2050. In those terms, I think Turnbull should be taking a harder line, pushing Rudd to do more, setting a high jump bar if you like, against which Rudd will be measured and they would have more significant consequences for business.

Business is great at sort of putting off adjustments, whether it was workplace safety or training or any of the other issues that have dominated the last 20 years. They’ve always shirked them. Business response to climate change has been “fine for everybody else, but not us” and really the adjustments have to be made, the big issues have to be addressed and you can’t play catch-up. The whole process is front-end loaded, so I think it will be an interesting debate, if Turnbull goes out there and argues a stronger case in that area and pushes Rudd to do more, but he may just sit back as Brendan Nelson was doing and say “we won’t lead the world” and so it will be an interesting debate.

IO: Turnbull got 45 votes to 41 — that’s a similar margin to what Nelson got when he came in. I’m just wondering if you know where the turn was…

JH: No, i just think there were a few people that thought Brendan was never going to get there and we’ve just got to give this ship a run. Turnbull’s never going to give up. His people have been destabilising. Turnbull hasn’t been caught short, if you like, doing it himself, but people around him have been doing it. Even on the weekend I saw an Insiders program with Andrew Robb, who is a great Turnbull supporter, saying that Brendan really had limited time to prove himself. Now,that’s not really helpful, coming from his shadow foreign minister. It’s not giving him clear air and it’s creating instability.

They’ll expect, of course, than Nelson forces will sit back and give them a free run and they’ll try to impose somewhat more discipline. They’ll only do that if they lead and if they get traction, so we’ll see what happens. I think Peter Costello’s destabilisation is finished, but he’ll be sitting on the backbench and he’ll be sitting there with that smirk on the entire time, hoping that one day the whole thing falls in his lap.

So I think it’s not going to be easy for Turnbull, but he should be able to get traction on issues relative to Rudd. He’ll be seen as a more equal competitor to Rudd, I think.

IO: When you say that you think Costello is hoping it might all implode and end up in his lap, are you suggesting that he still has aspirations for the leadership of the party?

JH: Absolutely. I think he has had them for a long time and he’s never done anything about them. But you know, I think he’s quite misplaced to imagine that he’d ever be drafted, but you know, if Turnbull had a run, stuffed up, made a serious error or two, and the party had to do something, and he’s sitting there … I mean, you could do a Howard. Howard sat around, sat around, sat around … and in the end he came back and has eleven and a half years as prime minister, so I think, you know, if Costello stays in parliament, he’ll always harbour that secret desire that one day his chance will come.

IO: But you suggest he won’t actually make it in…

JH: He won’t — I don’t think he’ll destabilise, I don’t think he’ll look like he’s going to challenge. If Turnbull were to run and fail, for example, what would the party do? He’d say, “well you could try me?”. (Laughs)

IO: And what’s going to happen to Brendan Nelson now?

JH: Well, Brendan is a very conscientious and passionate guy, as you’ve seen. I hope Turnbull is smart enough to give him a seat in a shadow ministerial commission. He’s basically a team player and I think he should be given a chance to do that. There’s often a tendency to say in the Liberal Party “well, you’ve had your chance, p-ss off”, but I think that it would be very unfair in this case, because I don’t think he had a fair run.

IO: Why did Brendan call the spill?

JH: I think he probably thought he would win. And I think he probably thought that under the circumstances he’d created, the surprise element, might actually help him consolidate his position and that if he won, then everyone would just have to shut up and let him have his time. So, he took a calculated risk and unfortunately for him it didn’t work.

IO: Do you think he’s kicking himself now?

JH: Oh probably, yeah. I think it would be a difficult time for his dog. (Laughs)