Thursday's capitulation by Malcolm Turnbull and Scott Morrison was a direct result of the Nationals forcing the government's hand.

Labor, the Greens, NXT, One Nation and others guaranteed the numbers needed but without the Nats being prepared to break ranks in both houses, it would not have happened.

Queensland Senator Barry O'Sullivan, who led the revolt, is the type of MP all leaders fear. He is independently wealthy and came to politics after long, diverse and successful careers.

He is not ambitious, cannot be swayed by career-limiting threats, is content on the backbench and does not intend to stay around forever.

Joyce struggled to maintain discipline, mainly because he was hardly in a position to command it. Fairfax Media

So when he got a bee in his bonnet about mustering cross-party support for a commission of inquiry into the banks, there was no stopping him.

The end result was humiliation, not just for Turnbull, but the government at large. The alternative to caving in to the Nationals was to be rolled on the floor of the Parliament next week.

The optics were dreadful. The tail had wagged the dog and even though a royal commission is popular in the polls and the Nationals may buttress a few of their own seats, the government will not be thanked.


The immediate public reaction was one of cynicism, that it was a belated stitch-up between the government and the banks to minimise scrutiny.

"We're led by Barnaby Joyce who crossed the floor more than 20 times," Pitt said.

This is not the first time the Nationals have visited ruin upon Turnbull. In 2009, they precipitated his downfall as Opposition leader by opposing his plans to support Labor's price on carbon. Back then, the Nationals acted as a bloc.

This time was different. The party was leaderless and rudderless thanks to Joyce and former deputy leader Fiona Nash being piffed by the High Court for being dual citizens and the Nationals were split.

The bank push was not unanimous.

Some have no issues with the banks. One, who wished to remain anonymous, expressed concern the royal commission could result in more regulation and a tightening of rural lending practices and potentially higher interest rates.

"I can hardly give you $1 billion from opposition," Chester said, in a warning that the disunity over banks had consequences for all. Glen McCurtayne

Right up until Wednesday night, acting parliamentary leader Nigel Scullion and Infrastructure Minister Darren Chester were trying to cool things down.


This included a meeting that day with Queensland MP, Llew O'Brien, who elevated the issue to serious earlier in the week when he pledged to join George Christensen in crossing the floor in the lower house to enable O'Sullivan's bill to be debated, and ultimately passed.

At what one source described as a heated meeting, which Scott Morrison also attended, O'Brien complained about the state of things in his electorate of Wide Bay, which he inherited from former Nationals leader Warren Truss.

O'Brien was worried about bank jobs being lost in his electorate and what he perceived to be a shortage of road funding.

Former Senator Fiona Nash arrives at the campaign office for Barnaby Joyce to support his campaign for the New England byelection. Alex Ellinghausen

"Truss gold-plated this electorate," O'Brien complained. Chester pointed out Truss held the seat for 26 years and delivered over that period whereas O'Brien had been there five minutes.

As for road funding, "I can hardly give you $1 billion from opposition," Chester said, in a warning that the disunity over banks had consequences for all.

No-one backed down and the government had no choice but to succumb.

In the lead-up to the backdown, renegade Nationals were contributing to the destabilisation by giving Turnbull free advice abut his leadership.


Perennial malcontent Andrew Broad launched a salvo on ABC radio because he was angry the conservatives had been outgunned on same-sex marriage. He was backed by Christensen.

"I concur with my Nationals colleague Andrew Broad. A true leader would have sought to capture the will of the people and protect [religious] freedoms, not this hands-off approach," he said.

Former Nationals leader John Anderson bobbed up in the Sydney Morning Herald to observe such disharmony did not exist when John Howard was at the helm.

Not one cared to mention the contribution of the utter lack of leadership from the Nationals.

Perennial malcontent Andrew Broad launched a salvo on ABC radio because he was angry the conservatives had been outgunned on same-sex marriage. He was backed by Christensen.

As one Nationals MP observed to this column, the banks issue would never have gotten to this point under Truss who was as unspectacular as he was effective.

"Truss was the best leader we never had," he said.

One of two things would have happened, he said. Truss would have contained the revolt or, if unable to do so, he would have approached Turnbull much earlier and advised him to call a royal commission so it would have looked like the government taking the initiative, not being forced.


As all and sundry licked their wounds after Thursday's backdown, it was observed by one senior official "not having Barnaby around was not helpful and neither was his contribution".

This was a reference to Joyce signalling during the week that he expected the Nationals Party room to officially support a commission of inquiry should the government not act first.

On Friday, the day after the government bowed to the Nationals, the Liberals were just overjoyed when NSW deputy premier and state Nationals leader John Barilaro, apropos of nothing, pronounced Turnbull was a dud who should quit before Christmas.

Here's a bloke who is part of the most jellybacked outfit in Australia, the NSW government. Think capitulation on greyhounds and council mergers.

It all just adds to the whole mess. Newspoll is out Monday. It will be bad.

The Liberals were just overjoyed when NSW deputy premier and state Nationals leader John Barilaro, apropos of nothing, pronounced Turnbull was a dud who should quit before Christmas. Kate Geraghty

Joyce will once more be the member for New England but he will be lucky to be able to control his own party, let alone help Turnbull and the Coalition.