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Labor’s new ministry is the result of a months-old factional deal to appease the Victorian Right – although the prime minister ‘signed off’ on the controversial sackings. By Jason Koutsoukis.
Exclusive: Albanese ministry decided three months before election
About three months out from the election, Deputy Prime Minister Richard Marles summoned senior Labor Right powerbrokers to a closed-door meeting where they settled how the faction would handle the ministerial vacancy created by Bill Shorten’s exit from politics. “Albo had said to Marles, ‘Look, I don’t really want a messy fight over his replacement. Can the Vic Right do me a favour?’ ” one Victorian Labor Right source tells The Saturday Paper.
The favour, Marles relayed, was that the Right would hold off from claiming Shorten’s vacancy and that the former Labor leader’s ministerial responsibilities for the National Disability Insurance Scheme and Services Australia would be split between the then social services minister, Amanda Rishworth, and Finance Minister Katy Gallagher.
“Marles then said: ‘The prime minister has asked us, as the Victorian Right, to take a hit,’ ” the Victorian Labor Right source says. “ ‘So, we’re agreeing that the Vic Right stay at three [ministries] and Shorten’s portfolio gets abolished. But let’s be clear, we want an agreement from you [the national Right] that after the election we get our fourth ministry back, okay?’ And everyone in the room agrees. Three months ago.”
While everyone in the room believed Albanese would win the election – or at least hang on to minority government – what no one saw coming was a landslide.
With those new seats came a wave of new MPs from Albanese’s own Left faction. The prime minister – a veteran of factional warfare since the early 1980s – had helped engineer this by keeping a close eye on preselections, with the clear aim of expanding the Left’s claim to a share of the 30 ministerial portfolios.
That’s exactly how it played out: the new caucus numbers gave the Left an extra ministerial spot, lifting its share from 14 to 15, while the Right’s dropped from 16 to 15.
If the Victorian Right – which had also grown its numbers in caucus – was set on reclaiming its fourth ministry, someone else in the Right would have to make way.
“So the people who took a seat off the New South Wales Right was actually the Left, not Richard Marles. And did the NSW Right go to the Left and say, ‘We want to keep all our ministers?’ Of course they didn’t,” says the Victorian Right source.
“With typical New South Wales arrogance, they turned around to the Victorian Right and said, ‘We’re ratting on the deal. We want to keep our representation at the same level and you can only have three spots.’ And of course, we said, ‘No, we will have our fourth spot back, thank you.’ ”
Instead of adding a fourth to the existing three Victorian ministers – Marles, attorney-general Mark Dreyfus and Housing Minister Clare O’Neil – Marles decided to make a further change to the Victorian Right’s ministerial cohort.
At 8.30pm on Wednesday, May 7 – two days before caucus was due to elect the new ministry – Richard Marles called the 68-year-old Dreyfus to tell him he was out.
When caucus met on the Friday morning, Daniel Mulino, the member for Fraser, and Sam Rae, the member for Hawke and a former Victorian ALP state secretary, were elected to the outer ministry. Mulino will serve as assistant treasurer and Rae has been named as minister for aged care and seniors.
While that restored the Victorian Right’s four ministerial positions, only two, Marles and O’Neil, are in cabinet. This is down from the four cabinet slots it held during Labor’s first term.
With Marles enforcing the Victorian Right’s claim to four ministerial slots, and the Left filling its 15 ministries, that meant someone else on the Right would have to go.
The only state faction over-represented in the ministry was the NSW Right, where industry and science minister Ed Husic ended up being forced out.
“We will take absolute responsibility for necking Dreyfus, okay? Time for renewal. And we wanted our fourth spot back. So, Dan and Sam go in,” says the Victorian Labor Right source. “But NSW? They didn’t have the guts to tell Ed, ‘Oh, by the way, we did a deal three months ago to give the Victorians back their fourth spot’, and they just didn’t want to take responsibility for axing Ed.”
Husic didn’t hide his frustration at being dumped from the ministry – or who he thought was behind it. He made clear he didn’t blame the prime minister or his NSW Right colleagues, but Richard Marles. He said the deputy prime minister had “plunged the knife” and acted as a “factional assassin”.
“Let’s be clear: Albanese signed off on Ed’s removal and it was the NSW Right – not the Victorians – who carried it out,” a second Labor source close to Marles tells The Saturday Paper.
Marles, the source maintains, was aware that Albanese was using him as a hatchet man and that he would likely wear the blame, but he accepted it as part of a deputy leader’s job, which is to protect the leader at all costs.
“When Ed complains that the deputy prime minister should be some kind of statesman, he’s missing the point,” the source says. “The deputy’s role is to take the political hits so the prime minister can stay above the fray. That’s how it works. But none of this would’ve happened without Albanese giving the green light.”
The uproar over the brutality of Labor’s factional carve-up – the backroom deals, the vanishing ministers, the quiet revenge – might sound dramatic. In Labor circles, however, it’s par for the course.
Of the party’s likely 122 caucus members, just two – Andrew Leigh and Alicia Payne, both from the ACT – remain proudly non-aligned. They are political unicorns in a system dominated by factional muscle.
The spectacle of blood on the floor, bruised egos and precisely executed betrayals was Labor doing what Labor does – deciding power the Labor way. This is especially the way of the NSW Right, long regarded as the party’s most ruthlessly pragmatic faction.
Years after being deposed in favour of Bob Hawke in 1983 – a move engineered in part by NSW Right supremo Graham Richardson – former Labor leader Bill Hayden summed up the experience with characteristic acid: being called “mate” by someone from the NSW Right, he said, was “like receiving a bunch of flowers from a member of the mafia”.
The irony deepens when you consider that it was Richardson who, less than a decade later, did the numbers to roll Hawke, still Labor’s most successful leader, in favour of NSW Right stablemate Paul Keating – the same Paul Keating who delivered a blistering denunciation of the Albanese government’s treatment of Ed Husic and Mark Dreyfus.
A similar outcry followed the 1990 post-election reshuffle, when Labor icon Barry Jones was sacrificed by his own Centre-Left faction in a numbers squeeze between Left and Right. “Geography, simple arithmetic and bastardry,” Jones said at the time, listing the reasons for his dumping. It was, he added, “a bit of a payback” for being too outspoken – words that now echo uncannily in the aftermath of Husic’s fall.
Another minister dumped following the 1990 election, Peter Duncan, whose Left faction colleagues in South Australia voted not to re-elect him to the ministry, also hit out at the “pragmatists” who had forced his removal.
“At their best, certainly in the Hawke government, factions make decision-making processes more orderly and they promote stability,” Labor historian and executive director of the John Curtin Research Centre Nick Dyrenfurth tells The Saturday Paper. “They’re important in terms of policy and idea generation and can create what I call a competitive tension between left and right. At their worst, they’re a vehicle for patronage.”
Among the dangers of excessive factionalism, Dyrenfurth believes, is when it prevents talented people from entering parliament at all – or when talented people are blocked from rising to the ministry or cabinet. Horsetrading between factions can also prevent the Left and Right from engaging in the ideological battles that help develop robust policy.
The Albanese government has been defined by discipline and cohesion, a party more united than it has been in decades. Yet in that settlement, something else has been subdued: the competitive tension between Left and Right that once made Labor ideologically sharper, more unpredictable – and, at times, more ambitious.
“One of the observations I’d make of the first-term Albanese government is that there was acquiescence from the Left,” says Dyrenfurth. “The Left didn’t play the role it traditionally has – that of the party’s moral conscience. But with a Left prime minister in Anthony Albanese, that restraint has gone the other way – the Left have become far more cautious in criticising the government.
“You didn’t hear the kinds of objections that were raised during the Rudd–Gillard years, or especially during the Hawke–Keating years. My core critique is that the ideological convergence between the broad Left and Right factions has dulled the party’s edge. It’s a bad thing for Labor.”
While no one disputes Dan Mulino’s talents – he has a doctorate in economics from Yale – figures in the Victorian Right are frustrated by the characterisation of Sam Rae as little more than a factional numbers man. They say that to describe him as a political mechanic installed in the ministry to serve Richard Marles’s long-term leadership ambitions ignores Rae’s professional record, his political acumen and how his background and working life reflect core Labor values.
“I do understand that Sam’s been painted in the general commentary in disparaging terms, which I think is incredibly unfair,” says James MacKenzie, the chair of Slater and Gordon and a long-time friend of Rae’s. “Look at the three things that matter in politics – people, policy and political nous – and Sam ticks every box … There are not too many people in the Liberal party room – let alone Labor’s – who understand the cost of capital the way Sam does. I worked with him at PwC on policy issues. He knows how to turn strategy into results.”
The events that have followed Albanese’s triumphant May 3 election – the backroom deals, the late-night phone calls, the not-so-quietly orchestrated exits – were hardly clean. The bruises will take a long time to heal. Yet the choreographed unity held. The prime minister, a veteran of the machine and no stranger to the logic of power, was able to stay above it all – at least at face value.
The Victorian Right got its fourth minister. Mark Dreyfus and Ed Husic got the knife. Anthony Albanese got what he wanted: no open war.
In all, it was just the Labor way.
This article was first published in the print edition of The Saturday Paper on May 17, 2025 as "Exclusive: Albanese ministry decided months before poll".
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