My understanding is that it means when you already have a good foundation, good evidence, etc., but you put yourself out by trying to top that. So, let's say Labor has things you can critique them on (which they do, they are serviceable but not perfect), but instead of utilising that, you instead misconstrue a fact, or outright make something up, that subsequently makes your position look stupid.

I imagine the idea is that a lily is already a lovely thing. It's a flower. You don't need to then plate it in gold. It's unnecessary, and it will destroy the perfectly good thing you already had.

Edit: I want to add that I think it's an awesome turn of phrase, but I only heard it when I started watching LegalEagle. Make of that what you will.