Illustration: Rocco Fazzari She denied the account then and now. In light of recent developments, Bishop's credibility is threadbare. The earlier story seems consistent with her established behaviour. The material that has streamed into public this week establishes her as a serial abuser of the public purse, a devotee of expensive charter flights, and a woman with a tremendous sense of entitlement to other people's money. As a junior minister in the Howard government, for instance, she spent $140,000 of taxpayers' funds over four years from 1998 to 2001 on chartering aircraft. That's over and above all the regular commercial flights and RAAF VIP flights she took. And it was seven times the sum spent by two equivalent Liberal ministers at the time, Tony Abbott and Joe Hockey. Her sense of entitlement was evident as a much, much more junior figure. A childhood friend, the businessman and aviator Dick Smith, recalls the little club the two played in as eight or nine year olds in the bushland of Roseville Chase on Sydney's North Shore:

"I was a nothing then," Smith once told the Fairfax reporter John Huxley. "I'm afraid I was a bit of a failure as a kid. But Bronnie ... well, she was the treasurer of the club. "I don't recall that she was ever exactly elected, but when we turned up for meetings at our cubby house, made from this old, smelly pigeon loft, she would collect all the threepences and sixpences. I reminded her of this when I met her recently and said, 'I hope you made the books balance.' I'm sure she did." Smith might have been more careful with his threepences if he'd known then what all of Australia knows now. Bronwyn Bishop is the archetype of political arrogance. In the 2 weeks since we learnt that she had charged us $5227 last November to take a helicopter the 75 kilometres from Melbourne to Geelong to tout for money for the Liberal Party, two reactions have prevailed. The country has been outraged at her hubris. This tells us about Bronwyn Bishop's behaviour. But also mesmerised by her flameproof imperviousness. This tells us about Tony Abbott's. Bishop's intransigence is crippling the government. Why does Abbott put up with her?

"I think if there is one lesson that every single politician must have had reinforced by all of this," said the Prime Minister on Friday, "it is that you cannot get away with exploiting the rules." But that's precisely wrong. She has gotten away with it. She's still Speaker of the House. She still enjoys all the privileges of the position. She's still paid a salary of 341,000 taxpayer dollars a year. And she's still in a position to claim other expenses which, for the second half of last year alone, were another 498,000 taxpayer dollars. And she's still Speaker because Abbott is choosing to keep her there. The job is in the gift of the government, which means, in effect, the Prime Minister. And what the Prime Minister has given, he can take away. The Leader of the House, Christopher Pyne, has urged his Coalition colleagues to "hold firm". But "hold firm" in defence of what? With a different character in the chair, Pyne might be able to make the case that it's in defence of the principle of the Speaker's independence.

But in Bishop's case, that's laughable. By her behaviour in the chair, Bishop has renounced any claim to independence. She is an unabashed partisan. Bishop's intransigence is crippling the government. Why does Abbott put up with her? On Friday he emerged as her spokesman and apologist, putting himself and his government at her feet. The ecclesiastically named duo entered the House together in a pair of byelections in 1994 for the adjoining northern Sydney seats of Warringah for Abbott and Mackellar for Bishop. The two were already close and they became closer yet as federal MPs. Paul Keating, prime minister at the time, greeted them as a "young fogey" and an "empty vessel". The nicknames, chuckle material at the time, have turned out to be searingly insightful. But at the time, John Hewson was Liberal leader. He'd lost the "unlosable" 1993 election. He was on the way out. The Liberals needed a new hope. John Howard wasn't ready to run again. And Bishop was touted as the party's great saviour. It's hard to believe today that the polls once rated her as preferred Liberal leader, that she was the most talked-about politician in the country, that she was the hero of the "Bronnie for PM" campaign.

But her caravan, driven by saturation media coverage, came to an abrupt halt on the night she won Mackellar. She took the Liberal share of the vote backwards. She's fallen at the first hurdle. Abandoned by that fickle friend, the media, and without a serious policy purpose, "Bronnie for PM" was dead on arrival. Bishop has been politically loitering, with intent but no purpose, ever since. So is Abbott acting out of personal loyalty? Partly, yes. And partly because he thinks that he's giving the rest of his party a lesson in loyalty. The Prime Minister feels vulnerable to a party-room coup, and he should. His polling is dreadful and his performance worse. Abbott's leadership was "finely balanced" in the Liberal caucus, one of his more supportive MPs said privately this week.

Abbott thinks that if he is to demand the loyalty of his party, he should show loyalty to his allies. Which is a fine sentiment, but a prime minister has larger loyalties. He has responsibilities to his party, his government and his country. By defending the indefensible in Bishop's misconduct, he betrays all of those. This, paradoxically, is making his grip on the prime ministership weaker, not stronger. The other reason he lets this wound keep bleeding is his conception of its nature. Abbott takes the view, and it's the orthodoxy on both sides of the aisle, that expenses scandals are inevitable but transient. Like a squall of bad weather. If so, the smart thing to do is to wait it out. But in this case, and in this moment in Australian political life, this is a misreading. The first clue is that an expenses scandal will usually blow over in two or three days. This one is entering its third week and is still building, not receding. Partly because Labor and the independents will not recognise her standing when Parliament resumes and will challenge her. The House will become unmanageable. The second clue is the force of public reaction. Australians are deeply discontented with Abbott, with his government, with Bill Shorten and Labor, with the entire political system.

Brian Head, a professor of public policy at Queensland University, sends his students out to probe the reasons for public disenchantment with politics: "When there are examples of poor practice and poor judgment, it draws attention to the self-justification, the selfishness and the deception" that the people loathe, says Head. "Politicians who hide behind rules while they feather their own nests risk the reputation of the whole political class." Bishop's little matter is not a passing squall but a lightning rod for the accumulated anger and frustration of a country that feels betrayed by both sides and all parts of the political system. John Hewson this week wrote that a political party able to offer a solution could become a "third force" in politics based on a pledge of honesty. By coincidence, the independent senator Nick Xenophon is proposing reforms to fix the entitlements system. Xenophon, who buys $99 suits at Lowes and refuses to travel business class, is planning to travel to London to study Britain's reforms. Paying his own way. He outpolled Labor at the last election and he's planning to run candidates for the Nick Xenophon Team at the next. New Zealand's Prime Minister, John Key, brought the clarity of an outsider to Australia's situation with his observation in Friday's Financial Review: "How come, generally speaking, Australians are a bit down in the mouth at the moment? And I think it's not an economic issue, it's a confidence issue," Key diagnosed.

"Australia hasn't had a recession since 1991, but they are sort of displaying the physical ... temperament that they are sort of in recession, even though they are not. And in a way, we've got a bit of a contrast over here." Australia is suffering not an economic recession but a political one. The difference, of course, is leadership. Key is a conservative leader who is trusted and supported to make serious reforms. The confidence he generates carries his country's economy. Abbott is a conservative Prime Minister who is neither trusted nor supported. He is a source of despair among the business community and a depressing factor on investment. Last week it was the NSW Premier, Mike Baird, who showed real leadership on tax reform when Abbott was running from it. This week, it was Mike Baird who showed real leadership on national cohesion in calling for good sportsmanship on the AFL field while Abbott was in hiding over the Bishop scandal. Abbott's failures of leadership are compounding, taking his government towards paralysis and the economy towards stagnation.

Key and Baird are the contrasts that illuminate his failure. His frozen immobility in dealing with Bishop is just a small but telling indicator of a general failure of leadership. The cost of the odd chopper is nothing compared to the cost to the country. Peter Hartcher is the political editor.