Sussan Ley has struck a conciliatory tone with climate rebels in her partyroom, suggesting a shift from the party's long-held net zero position could be on the cards.
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Liberal infighting over climate policy has reignited this week as frontbencher Andrew Hastie vowed to move to the backbench if the coalition held firm to the bipartisan position of net zero emissions by 2050.
As the party reviews the policy, the federal Liberal leader said she held misgivings with the position over cost.
"We will not have net zero at any cost because the cost can be too high," Ms Ley said on Wednesday.
"And right now, it looks like the cost is too high when you consider what this government is about to do with its Paris targets."
The federal government is expected to reveal its 2035 target on the road to net zero this week.
She dismissed another question on the possible fallout if Mr Hastie supported Nationals MP Barnaby Joyce's bill to repeal net zero and whether she would have to ditch or modify the 2050 pledge.
"All of my colleagues are participating in the discussion on energy right now, as they should," she said.
"I love it when people have strong views and express them."
Mr Hastie, seen by some as a future leader, denied quitting the shadow ministry would trigger a challenge for the party's leadership and conceded his view was in the minority among colleagues.
"I'll serve where I'm serving as home affairs shadow right now and I'll continue to serve until such a time as I can't," he told Sky News on Wednesday.
"But energy policy is something I care about."
Mr Hastie said his relationship with Ms Ley was "fine" but added: "We're not besties on the phone every day".
Treasurer Jim Chalmers capitalised on the bubbling tension, declaring the Liberals were run by a "weird collection of cookers and crackpots".
"Nowhere is that more obvious than when it comes to net zero," he said.
The spat overshadowed Ms Ley's first major economic speech as leader on Wednesday, where she hoped to shift the political debate toward Labor's fiscal management.
Arguing Australians' reliance on the welfare system has "swung too far toward dependency", Ms Ley foreshadowed a tougher coalition stance.
"It has become almost taboo in politics to suggest that not everyone is entitled to every government benefit," she told the Committee for Economic Development of Australia.
"True compassion is sustainable compassion.
"A welfare system that attempts to be all things to all people will eventually collapse under its own weight and that outcome would hurt the most vulnerable most of all."
Ms Ley claimed Labor was locking the nation into "permanent" dependency on the government, sending debt soaring to $1.2 trillion, threatening its top-line AAA credit rating and leaving future generations to pay.
She noted spending will reach 27 per cent of gross domestic product in 2025/26 - the highest level outside of recession since 1986 and up from 24 per cent since Labor came to office.
"We are essentially running a peacetime economy on emergency fiscal settings," Ms Ley said.
"That is obviously not sustainable."
In its first term, Labor produced two budget surpluses before posting a $42 billion deficit in March, just before the federal election in May.
Fuelled by increased spending, including in health and disability services, there is no forecast return to surplus in the forward estimates.
Australian Associated Press
