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Australian Prime Minister Malcolm Turnbull arrives for a party room meeting at Parliament House in Canberra, Australia, August 21, 2018. AAP/Lukas Coch/via REUTERS(reuters_tickers)
By Colin Packham
SYDNEY (Reuters) - Australian Prime Minister Malcolm Turnbull survived a leadership challenge by Home Affairs Minister Peter Dutton on Tuesday, government officials said, but the narrow margin of his win did little to dampen speculation about his future.
Turnbull defeated Dutton 48-35 in the party-room vote for the leadership of the Liberal Party, the senior party in the centre-right government coalition, officials said. The vote came after a sharp fall in opinion poll ratings and talk of a challenge that have raised the possibility of an early election.
Seeking to safeguard his leadership, Turnbull called on his party to back him or risk losing the next election to the opposition Labor party.
"We know that instability undermines the ability of any government to get anything done. Unity is absolutely critical," Turnbull told reporters in Canberra.
Labor wasted no time in moving a no-confidence motion against Turnbull in parliament, which could have triggered an election if successful.
The motion failed when all government lawmakers in the lower house of parliament backed their embattled leader despite a prolonged Labor attack.
"If the prime minister's own party does not want him, and nearly half of his party voted against him remaining prime minister, why should the parliament put up with him?" Labor leader Bill Shorten said of the party-room challenge.
Turnbull must return to the polls by May 2019 and could break the impasse by calling an early election. However, a state election in Victoria scheduled for late November is seen limiting him to dates before the end of October if he intended to hold a national poll this year.
"He's always got that in his back pocket. If it looks like there's another attempt to dislodge him, he could try to lock his leadership in by taking the coalition to an election," said Nick Economou, senior lecturer in politics at Monash University in Melbourne.
A spokesman for Turnbull declined to comment on the prospect of an early election.
The political instability could be contributing to falling consumer confidence, an economist warned on Tuesday.
"The decline ... may reflect the impact of the messy political debate locally and the associated slump in support for the current Turnbull government," said ANZ Head of Australian Economics David Plank.
Australia's stock market also fell more than one percent on Tuesday, its biggest drop in five months.
Turnbull declared the leadership open earlier on Tuesday amid a backbench uprising as opinion polls showed the government on course for a heavy election defeat.
His position remains in jeopardy despite surviving Dutton's challenge, stoking expectations of further political instability in a country that has seen six different leaders since 2009.
"We've seen it so often in Australian politics - this two-stage act play in removing a prime minister - and, given how close the vote was, there's definitely more to come," said Haydon Manning, a political science professor at Flinders University in South Australia state.
Turnbull came to power in a party-room coup in September 2015 when he ousted former premier Tony Abbott, who also survived an internal leadership contest before his eventual defeat.
A social liberal and multi-millionaire former merchant banker, Turnbull rode an early wave of popular support but his standing has diminished significantly.
He has struggled to appeal to conservative voters, while progressive supporters have been disappointed as they watched government policies shift to the right as Turnbull tried to appease a powerful right-leaning backbench.
The uneasy unity held sufficiently to secure a narrow election victory in 2016.
However, that fragile peace was broken this week by the weakening of the government's centrepiece energy policy, which had included the imposition of a target of a 26 percent reduction in greenhouse emissions from Australia's energy generators, an issue that has repeatedly divided the government.
Dutton, a conservative who has the support of the powerful right wing of the Liberal Party, resigned from the Cabinet after losing the vote, Turnbull said.
Turnbull said he asked Dutton to stay in his ministerial post but Dutton declined. Treasurer Scott Morrison would act as interim home affairs minister, Turnbull said.
Dutton, a former policeman from Queensland state, can now canvass support from the backbench to mount a potential fresh challenge.
Dutton did not rule out another challenge as he thanked his colleagues for their support. "I have gone through what my job is now and that is to make sure that I can help the coalition win the next election," he said.
By Tuesday evening, five ministers who voted for Dutton had submitted their resignations, according to the Australian Broadcasting Corp. Television.
The most senior of the three, the country's Minister for International Development and the Pacific, Concetta Fierravanti-Wells, said in her resignation letter the party was "moving too far to the left".
"Our conservative base strongly feel that their voice has been eroded," Fierravanti-Wells said.
(Reporting by Colin Packham; Additional reporting by Erin Cooper and Swati Pandey; Editing by Paul Tait)