TO THE
BITTER
END
For Norm Hartcher
My first tutor in politics, and the man who taught me how to laugh.
The dramatic story behind the fall of John Howard and the rise of Kevin Rudd
First published in Australia in 2009
Copyright © Peter Hartcher 2009
All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher. The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10 per cent of this book, whichever is the greater, to be photocopied by any educational institution for its educational purposes provided that the educational institution (or body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act.
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National Library of Australia
Cataloguing-in-Publication entry:
Hartcher, Peter
To the bitter end: the dramatic story of the fall of John Howard and the rise of Kevin Rudd / Peter Hartcher
9781741756234 (pbk.)
Includes index.
Rudd, Kevin, 1957–
Howard, John, 1939–
Australia. Parliament—Elections—2007.
Political campaigns—Australia.
Political leadership—Australia.
Australia—Politics and government—2001–
324.99407
Typeset in Adobe Garamond 12/15pt by Midland Typesetters, Australia
Printed and bound in Australia by Griffin Press
10 9 8 7 6 5 4 3 2 1
Prologue The Last Supper
PART ONE Shock
1 Don’t Punch the Old Man
2 ‘We Are Stuffed’
3 A Night of Long Cigars
4 Madness Maddened
PART TWO Awe
5 Man of Steel
6 Overreaching
7 Overheating
8 Overruling
9 Daddy Turns Nasty
10 Pissed Against the Wall
11 The Primate Model of Ruling
12 ‘There Was No Way He Had the Numbers to Topple Me’
13 Beware of Thyself, Old Man
PART THREE Vengeance
14 A Very Determined Bastard
15 Exterminate
16 Brand Rudd
PART FOUR Defeat
17 A New Model For Old Governments
18 ‘Shit, We Have to Do Something’
19 The Wizard of Oz
20 ‘A Profound Failure’
21 Don’t Think of an Elephant
22 Splurging Into Oblivion
23 The Victorious Principle of Similar Difference
Note on Sources
Acknowledgments
Index
Two days after losing the 2007 election, John Howard phoned Peter Costello. The outgoing Prime Minister wanted to invite his deputy to The Lodge for a final gathering of the Howard ministry. Wags quickly dubbed it the Last Supper.
Improbably, John Howard’s social invitations to Peter Costello had become something of an issue in the affairs of the land. The 2007 biography of Howard by Wayne Errington and Peter van Onselen had disclosed that the Prime Minister had invited a number of his ministers and their spouses to dinner at The Lodge over the years, but never the Costellos.
This detail, innocuous on the face of it, became news because it hinted at the subterranean strains between the two men who had been running Australia. ‘It doesn’t worry me,’ Costello said at the time the book was published. ‘I’m just as happy eating fish and chips on a beach.’
And an invitation to The Lodge carried a bitterly sardonic flavour for Costello. The official Canberra dwelling of prime ministers since Stanley Melbourne Bruce took up residence in 1927, Costello had been craving The Lodge for years. His ambition had been thwarted. Despite his pleas, public and private, Howard had refused to quit the prime ministership.
Even now, Howard was not going to any special lengths to reconcile with his Treasurer. The Prime Minister was only observing proprieties—it was a lunch for the entire ministry. But Costello did not even go so far as observing the proprieties.
‘I’m not coming to lunch,’ Costello replied on the phone. ‘We have just been voted out. There’s no point going to The Lodge.’
Three months later, Costello’s successor as Treasurer, Wayne Swan, was able to report that he and his wife, Kim, had been invited to dine with Kevin Rudd and his wife, Therese Rein, at The Lodge and at Kirribilli House. The two Queenslanders had not always got along. But their relationship had been repaired and they were now working well together. Swan remarked: ‘So we have already exceeded the Peter Costello–John Howard benchmark.’
It was September 2007. The Federal election was to be called in a little over a month. John Howard and a handful of his top lieutenants sat down to a secret briefing in the genteel commonwealth offices in Melbourne’s Treasury Place. Joining them was the Liberals’ advertising campaign team. The meeting was to review the ad campaign for the election that loomed.
The party’s pollster, Mark Textor, gave the gathering grim news. The Howard Government was facing a tough struggle for re-election. It looked terminal. The balding, blunt-talking Textor ran a presentation demonstrating why.
His research with focus groups of voters found entrenched perceptions of the Howard Government. Certainly, the positive views of happier times persisted. Australians still regarded Howard as a man who had the courage of his convictions. But harsher attitudes had developed since the last election.
Consistently now, Textor said, the Howard Government was seen as out of touch, too old and too tired. When participants turned to see how the Prime Minister was taking this news, they discovered that Howard had dozed off.
Out of touch, too old, too tired.
Asked about this incident some months after the election, Howard said in an interview, ‘In twelve years, the odd Cabinet minister would have closed his or her eyes for a minute, myself included. But no one ever went to sleep.’ He denied that he had dozed off in this particular meeting: ‘Absolute tripe,’ he called it.
Another participant said that not only had it happened but it had made a big impression: ‘There were ad people in the room who hadn’t seen Howard for a couple of years, since the last campaign, and they were amazed. People went out after the meeting into the corridor and said to each other, “Wow, did you see that?”.’ Voters’ perceptions would be difficult to change because, it seemed, they were right.
· · ·
It was in this phase of the election that the previous Labor Prime Minister of Australia decided to offer some political advice to the next Labor Prime Minister. With the informal electoral contest well under way, yet with the formal commencement of hostilities still to come, Paul Keating phoned Kevin Rudd. His counsel? To get more aggressive.
The tip was well meant. It was also rejected. ‘You’ve got to throw a few punches,’ Keating told Rudd in the course of a long phone conversation. He wanted to see Rudd hurt John Howard.
That was in character. One of Keating’s many aphorisms was, ‘If you’re in politics, you’re in the conflict business’. It had always been his style to throw the most direct and damaging blows he could. Many years earlier, a livid Keating had sworn on the front steps of the old Parliament House in Canberra that he would make Howard wear his leadership of the Liberal Party ‘like a crown of thorns’. The then treasurer was enraged because he suspected that Howard had condoned a political attack on his private life. His anger then had been almost uncontainable.
Kevin Rudd politely thanked Keating for his advice, but privately he counselled intimates to follow another course entirely. Rudd was much impressed by the wisdom he had heard years earlier from Tony Blair. As a fresh backbencher in the Federal Parliament, the Queenslander had been part of a delegation of Australian Labor politicians to meet the then Prime Minister of Britain. Blair explained that he had taken power amid considerable unease about British Labour—the party had been out of office for a long time, it was still associated with trade union radicalism, and it had been subjected to a Tory campaign of demonisation. So, the new British Prime Minister said, he had decided to be guided by the need to supply the British public with three vital commodities—reassurance, reassurance and reassurance.
Rudd’s essential approach to taking power from John Howard was to let the sixty-eight-year-old expire gently of natural causes rather than try to beat him to a bloody pulp.
Rudd’s campaign was certainly vigorous, but he would never openly savage Howard. Throughout, he respectfully called the older man ‘Mr Howard’. So did Labor’s TV ads. In the so-called Emma Jane ad, a mum in her suburban kitchen complained about the rising cost of living, concluding with the line: ‘You’ve lost touch, Mr Howard. No offence, but you’ve just been there too long.’
Labor’s focus groups of voters had evidently turned up precisely the same sentiment as Mark Textor’s had for the Liberal Party. Howard was still held in some popular regard, but he had been around too long and was now out of touch. Howard was shrivelling as a result of his own misjudgments and his sheer longevity.
The Liberal Party’s confidential research showed that there were three principal reasons why the Howard Government was likely to lose the election. This proved to be accurate. The party’s findings were later made public by Howard’s successor as leader of the Liberal Party, Brendan Nelson, who had not seen them while he was a minister in the Howard Cabinet. Howard was secretive with party research and withheld the most sensitive work from all his colleagues, including his deputy.
But five months after the election, Nelson said: ‘I’ve seen the research now. There were three reasons the Government lost. First was longevity. It was the longevity of Howard, Costello and Downer, but Howard in particular. Second was Work Choices. A significant number of people voted Labor for the first time, and Work Choices had a lot to do with that. Third was our approach to climate change.’
Each of these liabilities was self-inflicted—longevity of the leadership, Work Choices and climate change policy. The Howard Government was not demolished—it imploded. Rudd’s task was to position himself as the reassuringly competent alternative. When the Government fell, it would fall to him.
The Labor Party’s campaign team summarised it succinctly in its mid-2007 strategy review: ‘Many people are ready to switch to Labor. Need to REMIND them of the benefits, then REASSURE voters who have switched to us that they have made the right choice.’
Rudd was confident that he was on course to win the 2007 election. He was chiefly concerned not to frighten voters with bellicosity, but to reassure them with his trademark calm. The biggest risk to Labor’s prospects, the party leadership concluded, was that Howard might do something dramatic to breathe new life into the fast-fading Government. ‘My psyche after the 2004 election was that we couldn’t take anything for granted,’ said Labor’s campaign director and national secretary Tim Gartrell. ‘We were so battle-scarred, and John Howard was a tough old dog. He was a master.’ Would he once again take Labor by surprise with a dramatic manoeuvre?
The Labor campaign had a Costello contingency plan, a team of officials on standby researching Costello and developing lines of attack against him. In the event that the Coalition suddenly changed its leader, Labor was determined not to be left surprised and naked. It had an alternative strategy for campaigning against a Prime Minister Costello.
When John Howard read the poll published on Tuesday, 4 September 2007, at the beginning of the week of the Sydney APEC summit, all the energy drained out of him and all his fight left him. For only the second time in his thirty-three-year career, he fell into profound despair.
Howard was famously relentless. He once summed up his success in politics as a case of ‘persistence more than luck’. One of his nicknames was the Eveready Bunny. And he loved a fight. ‘We always took the view that you always act as if you’re in opposition and your back’s to the wall—and you fight accordingly,’ his long-time chief of staff, Arthur Sinodinos, recalled. Another of Howard’s nicknames, courtesy of US President George W. Bush, was the Man of Steel.
He had been girding himself for the greatest fight of his life, his last election campaign. He was going to attempt something only one other prime minister had accomplished—a fifth consecutive victory. Only his hero, Sir Robert Menzies, the founder of the Liberal Party, had succeeded. But now Howard’s hopes turned to ash.
He had expected the Australian public to rally around him as they approached the choice between their long-serving leader and the arriviste Kevin Rudd: ‘I didn’t contemplate retiring in early 2007,’ Howard told a political intimate. ‘I mean, it was obviously going to be tough, but I thought, We’ve still got six or seven months, and he’ll make mistakes and he’ll run out of puff. And, as we get closer to the election, people will say, Well, we don’t mind [Rudd], but not just yet. We’ll give him another run around the course, another run in the paddock, before we vote for him.
‘And that, in the end, they’d stay with us. I mean, that was my thinking right through until the end, towards the end.’
It was not until this day in early September—just eighty-two days before the Australian people sent him to electoral oblivion—that it struck Howard with full force that a majority would not stay with him after all. Howard had lived through terrible polling before and had always triumphed in the end. His Government had been lagging in the polls all year, yet his confidence in his own powers did not desert him until now. ‘I guess around September,’ he said, ‘I started to think that it was never going to shift.’
On that day, recalled his closest confidant in politics, Foreign Minister Alexander Downer, ‘he spoke to me on the phone on the Tuesday and he asked me to meet him’.
With twenty foreign leaders arriving in Sydney for the Asia-Pacific Economic Conference (APEC) summit, it was a frenetic week for Downer. He was at his Sydney hotel, the Quay Grand in Macquarie Street, in a meeting with his Coalition colleague, Trade Minister Warren Truss and some APEC officials when he took the Prime Minister’s call. He finished the meeting and walked the few blocks to meet Howard at the Commonwealth Parliamentary Offices at 70 Phillip Street, the discreet office space provided for all Federal ministers when they are in Sydney. He found his leader in a state of despondency.
Downer recalled: ‘On the Tuesday his thinking was, We are stuffed—we’re going to lose the election and I’m going to lose Bennelong.’ To lose his own seat would be a signal humiliation for any prime minister. So Howard had decided to retire. He wanted to canvass scenarios for doing so. He wanted to talk about the details of timing and succession. And perception management.
The polls had been flashing an angry red for the Howard Government for over a year. But even from a desperately bad start, the Newspoll in The Australian that morning showed a breathtaking deterioration of support. A fortnight earlier, the same polling firm had given the Government just 45 per cent of the two-party preferred vote to Labor’s 55. But now the Government’s support had apparently shrunk to a shocking 41 per cent against Labor’s 59.
Opinion polls do not pretend to be predictors. They are instant snapshots of sentiment, not crystal balls. Even if most polls were, this one would not have been a plausible indicator of the election result. There were two reasons for this. First, in the history of the modern two-party system, which took shape in 1949, no party had ever won more than 56.9 per cent of the two-party preferred vote—a record set in 1966. Further, this latest Newspoll result was well out of line with the findings of the other three major polling companies.
Yet politicians, despite all their protestations to the contrary, live and die by the polls. Most receive them with the gravity of a judicial ruling. Especially in the run-up to an election, Howard’s moods from day to day depended on the opinion polls. Although he successfully concealed it from public view, Howard suffered intense mood swings. He frequently vented his frustrations on senior staff, yelling and shouting. The greatest single cause of Howard anger, according to several of those who worked intimately with him, was poor polling. The polls ruled Howard’s emotions.
The oscillations of the Prime Minister’s moods were so punishing on those around him that they had persuaded Arthur Sinodinos to leave Howard’s employ the year before, after more than a decade as his most important aide. Sinodinos, the man some had called the real Deputy Prime Minister, later explained why he decided to make the 2004 election his last in the service of John Howard: ‘During a campaign, we would track seats overnight,’ he said. ‘We tracked about sixteen a night in the 2004 campaign. What would happen normally is you’d get these big deviations, and the PM’s mood reflected the deviations. So one day he’s up; the next day he’s down. So, behind the scenes it was a bit of a rollercoaster . . . This is just a personal thing, but I just felt: look, we’ve done four of these, and it’s all been very good and we’ve all had a great time but, emotionally, I didn’t think I could go through another campaign.’ Sinodinos told the other members of the Prime Minister’s staff of his decision on election night 2004, and acted on it in December 2006. Howard’s most valuable adviser left him just as his most dangerous adversary, Kevin Rudd, arrived as Labor leader.
On that Tuesday morning, 4 September 2007, Howard was deeply depressed. He no longer had Sinodinos to counsel him. An Australian prime minister has a private office with some thirty staff; now that he was in a funk, Howard consulted two of them about the prospects. He spoke to Sinodinos’s replacement as chief of staff, Tony Nutt (formerly the Liberal Party’s director in South Australia), and to Aileen Wiessner, his longest-serving staff member, who normally provided a communication channel to Liberal Party backbenchers. Howard later summed up their responses to him in three words: ‘I said, “How are we going?” And they said, “Not good, boss.”’
Now Howard turned to Downer. But when the Foreign Minister arrived, he found that the Prime Minister’s mind was made up. As Howard put it after the election, ‘I was quite pessimistic. Yeah, I was.’ How did he decide to bring Downer in at this juncture? ‘Downer and I had talked very frankly about our position all through the year, because I communicated more directly with him than probably anybody else. But Alexander, until this period, remained very upbeat—he kept saying, I am very confident it’s going to turn. But after this poll, we had this meeting, and he was quite pessimistic: “Oh, I was speaking to people at the weekend, and there seems to have been a shift, and it was all very glum in Melbourne.” This was the sort of conversation we had. And I said: “Well, you know, I am quite pessimistic, and I think I am going to be struggling to hold my own seat.”’
If Bennelong was lost, so was the election.
As Downer remembered the meeting: ‘We were talking about whether he should stand down at the end of APEC. Stephen Harper, the Canadian Prime Minister, was visiting Parliament the next Monday. The question was whether [Howard] should stand down on the Tuesday or the Wednesday—that was the basis for the conversation.’
Australia’s second-longest-serving prime minister thought he would be gone in a week, eight days at the most. Prime Minister Peter Costello would lead the Government to the election.
· · ·
The Prime Minister now embarked on an exquisite piece of role playing. At the very time when he was seeking to negotiate his way out of power, he was hosting a meeting that had brought to Sydney the greatest concentration of power ever seen in Australia. As he crafted a despairing exit from leadership, he was acting the part of a triumphant world leader. While he prepared to surrender all ambition for himself, he played a pantomime of being hugely ambitious for his country and the greater Asia–Pacific.
Political leaders everywhere are accomplished at operating in parallel universes, with their public performances often at odds with their private machinations. In his classic exposition of the precepts of statecraft, the 16th century Florentine diplomat and political adviser Niccolo Machiavelli wrote: ‘For a long time I have not said what I believed, nor do I ever believe what I say, and if indeed sometimes I do happen to tell the truth, I hide it among so many lies that it is hard to find.’
Yet, even by the standards of political duality, John Howard in September 2007 set out on a breathtakingly grand example of subterfuge. Posing as the man leading the powers of the Asia–Pacific to a vibrant future, he secretly set out to arrange his retirement. Alexander Downer, reading from his own diary of that week, recounted how he and Howard worked furtively on the Prime Minister’s retirement plan in spare moments snatched from APEC’s grand summitry: ‘On the Wednesday we had a signing ceremony with George Bush, and Howard and I had a chat about it [Howard’s resignation] after the meeting with Bush. On Thursday, after the signing ceremony with Hu Jintao, and before the lunch with him, we spoke again.’ At that lunch, Rudd had stolen the show by speaking Mandarin to the Chinese President. ‘We decided,’ continued Downer, ‘that I should consult the Cabinet colleagues that night.’
Most of the ministers in Howard’s Cabinet would be at the APEC business summit in Sydney that night. Downer would take the opportunity to gather them together in secret to ask their views about Howard’s leadership.
Although it was presented to them as a consultation, in reality the meeting was conceived as a device to begin Howard’s departure. Howard could not appear simply to lose heart and walk away, despondent, and leave his party in an impossible position. He needed a specific catalyst he could cite. He needed a justification. Or, as he explained after the election, he wanted the option of an exit: ‘My position essentially was that there was no way that I was going to unilaterally go. Because by then my departing would not have made any difference to the outcome. And it would just be seen as an act of cowardice. People would have said, John Howard thinks he’s going to lose. He can’t bear to be defeated, so he’s running away at the last minute and he’s going to give poor old Peter [Costello] the hospital pass and, gee, that’s a rotten thing to do. But, on the other hand, a lot of the colleagues, if they felt especially strongly and if they were willing to own a request for me to go—and the public would know that I was being asked to go—then I’d have gone. I’d have gone without any fuss. I mean, it gave me an exit.’
With the conditions he attached, he was seeking more than an exit. He wanted a blameless one. By asking his ministers to take responsibility for removing him, he was also asking them to take responsibility for the length of his tenure to date. Howard had been Prime Minister for four thousand days—four thousand opportunities to choose the date of his own retirement. Now his Cabinet was being asked to take responsibility for his failure to take up any of them. In the likely event that the Government should lose, Howard wanted his ministers not only to carry the full burden of blame but to grant him immunity from being called a coward.
Now, at Howard’s suggestion, Downer was to canvass opinion among the members of Howard’s own Cabinet. The Prime Minister was asking the Cabinet—the national executive which he himself had appointed—to decide whether he should remain in the prime ministership.
Downer had already taken the precaution of phoning Peter Costello on Wednesday. Before dispatching the king, he wanted to be certain that the crown prince was available. Costello had publicly coveted the prime ministership for almost as long as Howard had been in it. In 1999, he’d said he had only ‘another budget or two in me’. Still, it was five minutes to midnight and the black maw of political oblivion was frighteningly near. Downer needed to know whether Costello was prepared to lead the Coalition in this moment of despair.
As Costello recalled, Downer ‘said he couldn’t be sure, but he thought Howard might stand down, that Howard had told him he couldn’t win the election and he couldn’t win Bennelong’. The Foreign Minister said something like, ‘He’s thinking of going—I can’t be sure, but I think he will. Are you prepared to be leader if he stands down?’
Costello’s reply: ‘Yes. It’s a hard ask, and it’s very late in the day, but yes.’
He later ruminated: ‘Downer sounded as if he was going to do it. Part of me said, We’ll believe it when we see it. Another part of me thought, Better get ready. I was absolutely determined to do it. Downer said he would be off in the next forty-eight hours.’
The Treasurer started making preparations to assume the prime ministership at short notice, to lead a Government that, according to every available indication, had come to the end of its life. It would demand an epic effort. ‘I began preparing a reshuffle, policies, speeches. I think I spoke to the federal director [of the Liberal Party, Brian Loughnane]. He was out of the loop, he didn’t know what was going on. I spoke to my staff and my colleagues. This was very much on, and the reason I thought it was on was that Howard went to Downer. You don’t go to Downer and say, “Find out if they want me to go.” Otherwise, why would you do that if you weren’t going to go? And you must know this would become public. If your intention was to fight on, it would be highly damaging for this to become known . . . This had moved, it had got a huge head of steam, and the reason Downer was not concerned about leaking was that he thought it was going to happen.’
As Howard and Downer were seeking to build their political ejector seat for the Prime Minister, Tony Abbott happened to stumble upon them. On the day Downer phoned Costello, Health Minister Abbott was at a lunch organised by the Forestville branch of the Liberal Party in his seat of Warringah, in northern Sydney. The guest speaker was Janet Albrechtsen, a conservative partisan who had used her column in the Sydney Morning Herald and more recently The Australian to barrack tirelessly for Howard. The admiration seemed to be mutual. Howard had appointed her to the board of the Australian Broadcasting Corp. But, dispirited by the same Newspoll result that had crushed Howard, Albrechtsen had come to the same conclusion as her hero.
‘I sat next to her and she said she was thinking of urging Howard to retire,’ Abbott recalled. He tried to dissuade her. ‘Sure,’ he said. ‘We are in a difficult position, but why would you dump an incumbent for an inferior choice?’ But Albrechtsen was adamant. ‘Neither of us could convince the other.’
At the end of the event, Albrechtsen told Abbott that she wanted to do Howard the courtesy of telling him she would express this view in her next column. He offered to pass on the message, and phoned the PM later that afternoon: ‘I’m sorry to bother you, but I think I should tell you about a conversation I had with Albrechtsen.’
Abbott was surprised to find that the Prime Minister was considering the very course of action he had just been arguing against. ‘Then we had a very frank fifteen to twenty minute conversation.’
‘Let’s shed ourselves of preconceptions and see what is best done in the circumstances,’ was the way Abbott characterised it. ‘And certainly he was open to the idea of going, provided it was really in the interests of the Government and provided it was the clear wish of the colleagues.’
After the election Howard recalled that, at this moment, Abbott momentarily lost his rock-like faith in his leader’s powers and concluded that Howard should, indeed, retire: ‘Tony Abbott, for a very brief period, thought I should go.’
Howard then asked Abbott to open up a process parallel with the one Downer was running. ‘He said to me, “I have asked Alexander Downer to take soundings and I would be happy for you to take soundings.”’
The two men felt a genuine affection for each other and shared a close ideological alignment. In the election’s aftermath Abbott would be one of the very few members of Howard’s Cabinet who continued to see him and lunch with him. Howard was Abbott’s hero; Abbott was the Prime Minister’s protégé. So, as with Downer, Abbott was a man the PM felt he could trust.
Howard evidently wanted to leave no stone unturned in seeking the approval—or, perhaps, the permission—of his colleagues for his resignation. He was prepared for some confusion and some duplication, it seems, in the process. And what would be the benefit? It would confirm to Cabinet members the seriousness with which he was considering his future. It would inevitably generate more activity, more speculation, more angst and, therefore, more momentum. Abbott would also create a second channel by which Howard might be able to gauge the accuracy of what he heard through the first. He could not have predicted, however, that Downer and Abbott would take their soundings in different oceans.
Downer and Abbott, although given the same mission, approached it with wildly different methods. Abbott’s was idiosyncratic; Downer’s was methodical. Abbott spoke to selected individuals one-on-one; Downer organised a meeting. Abbott consulted only three Cabinet colleagues; Downer sought the views of practically all. Most strikingly, Abbott chose whom to consult quite randomly—he cheerfully approached people outside the Cabinet and the party, and even consulted strangers at a barbecue for recovering drug and alcohol addicts. Downer limited his circle to Cabinet ministers.
Abbott started by phoning Nick Minchin, a force on the conservative end of Liberal politics and a former state secretary of the party in South Australia. ‘In my view we are headed for defeat,’ Abbott recalled Minchin saying, ‘in my view we should have changed leader a year ago, but it’s too late now. And, besides, I don’t think Peter Costello would do it.’
Abbott decided he’d better phone Costello to check, as Downer did on the very same day, to ask whether he was prepared to lead the party in such straitened times. He got from the Deputy Leader the same message that Downer did. According to Abbott, ‘He said it should have happened twelve months ago, and it would be a poisoned chalice. But obviously, if he vacated the position, I would do it.’
Abbott next called Downer, one Howard-appointed canvasser now canvassing the other. ‘Downer said to me, “It’s a fine judgment. But I think, on balance, it’s better that we make the change.”’
Then Abbott took the project out of the Cabinet, out of the Liberal Party and off the reservation. He took it all the way to Gorman House, a detoxification unit for alcohol and drug abusers in inner-city Darlinghurst, Sydney. The centre is run by St Vincent’s Hospital. Friends of Abbott connected with Gorman House were pressing the Health Minister for funding for its vital work in rehabilitating desperate cases, and he had agreed to a visit. ‘There was a barbecue there and I was helping,’ Abbott said. ‘There were some semi-recovering alcoholics and worthy helpers. So I canvassed their views: Should we keep John Howard or change to Peter Costello? What do you guys think?’
Politicians rely heavily on the opinions of voters convened in focus groups by market researchers. Abbott’s ad-hoc focus group was not a scientific exercise in political polling, but he certainly could not be accused of restricting himself to elite circles. Their consensus, in Abbott’s words: ‘Yes, you guys are in trouble, but we like John Howard and we’re not keen on Peter Costello.’
On his way home from the barbecue, Abbott phoned two longstanding friends, one Labor-inclined and the other a conservative; both thought a switch to Costello would be a change for the worse. Next, he asked the opinion of his wife, Margaret. ‘She said it would be so unfair to John Howard, and Peter Costello is just not well liked.’ That sealed it for Abbott. ‘I phoned Howard and told him I’d discussed it with Downer, Minchin, Costello and some random people, plus three people whose judgment I value. I said, I’ve come to the firm view that it would be lunacy to make a change.’
Heartfelt as this opinion may have been, it was quite useless to Howard. All it told him was something he already knew—that Tony Abbott was the staunchest of his allies. Months later, after the election, Abbott would be punished by the Parliamentary Liberal Party for his loyalty. One of the reasons he decided not to stand against Brendan Nelson and Malcolm Turnbull for the leadership was that Liberal MPs told him they could not vote for him because he was ‘Howard’s mate’. What Howard did not learn from Abbott was the state of sentiment in the wider party. Nor did this assessment provide him with a mechanism he could use to trigger his resignation. It gave him a warm feeling, but not much else. Abbott intended to phone Downer back to tell him his view, but the line was busy and then he got sidetracked: ‘It was on my mind to call Downer, but of course I never bloody-well did.’
Downer worked more methodically. As soon as the official lunch for Chinese President Hu Jintao was finished, he drew aside the Deputy Prime Minister. According to the power-sharing conventions of the Coalition, this post automatically went to the leader of the National Party who, at that moment, was Mark Vaile. ‘I said to him the PM was interested in knowing people’s thoughts [about the leadership],’ Downer recalled. ‘Vaile said the situation was dire and that we were probably not going to win. He said, We will leave it up to you Liberals, and we’ll go along with your decision.’
Next, Downer phoned those Liberal Party members of the Cabinet who were not planning to be at the dinner that night. Even though he personally was convinced that Howard was at the end of his run and should go, he still wanted to invite them all to the meeting he was convening. He wanted to get the broadest possible authority to begin Howard’s removal. Diminished though he may have been, Howard was still the greatest living figure in conservative politics—second only to the Liberals’ founder, Robert Menzies, in the pantheon. Downer did not want to be seen as a lone assassin.
He called Abbott, Communications Minister Helen Coonan, Mal Brough, the Minister for Families, Community Services and Indigenous Affairs, and the Leader of the Government in the Senate, Nick Minchin, who was simultaneously the Finance Minister. ‘Coonan said we were doomed,’ Downer remembered. She could not make it to the meeting in Sydney because of a commitment in northern New South Wales. She asked for time to consider Howard’s situation and promised to call back. Mal Brough couldn’t make it to the meeting either, but made plain his view that Howard should go.
When Downer rang to invite Minchin, the Finance Minster’s first reaction was to oppose the exercise. ‘I told Downer it was a bad idea because it would leak,’ Minchin recalled. ‘But he said, Howard wants me to get the view of others and the best way to do that is when we are all together in Sydney.’ Minchin said he would not be in Sydney and would not be at the meeting. He explained his attitude to changing the leadership, just as he had put it to Abbott: Howard should have gone a year earlier, but it was too late now. And, ‘I stressed to Downer that, if you have this meeting, if you have this resolution, it must be of Howard’s own volition—it must not be seen as Howard being pushed. I asked Downer to convey to the meeting my view that it was far too late to change. And if there was any change, it had to be on the basis that John was acting of his own volition.’
While Abbott had neglected to phone Downer back, Downer now phoned Abbott to invite him to the meeting in Sydney. But the Health Minister had his phone switched off while he gave two speeches in Brisbane and then repaired to a bar. He missed the call.
Downer approached all the Cabinet ministers who were going to the APEC dinner. ‘He tapped everyone on the shoulder and said, Come to this meeting about the leadership,’ recalled the then Environment Minister, Malcolm Turnbull. It was to be immediately after the APEC business summit dinner, in Downer’s hotel room at the Quay Grand Suites, on the other side of Circular Quay from where they were dining.
‘I was astonished that we’d be having this meeting,’ said Turnbull. ‘I thought it was a bad idea, that we would be door-stopped’ by inquisitive journalists wanting to know why an ad-hoc after-dinner Cabinet meeting was being held in the Foreign Minister’s hotel room. But no reporters noticed the convergence of ministers that night. ‘I told Downer that I felt that events were being put in train that had a certain inevitability about them. Downer said, No, no, the PM wants us to have this meeting.’ The PM himself, however, would not be there.
Now Howard carried off one of the most theatrical parts of his double life as the despairing leader looking for an exit and simultaneously the exuberant host of the Asia–Pacific powers. At the APEC business leaders’ dinner, John the Janus-faced addressed about 400 of the world’s leading corporate chiefs. A vast hall at the Overseas Passenger Terminal at Sydney’s Circular Quay had been decorated with swathes of pastel draperies for the event. Massed candles cast golden light. A string quartet played.
It was the crowning event of the so-called Business Summit of APEC, itself a sideshow to the main event. This was the closest members of the private sector were allowed to come to the twenty-one APEC leaders, a privilege for which they’d paid $5000 each (spouses were not invited).
The Prime Minister’s office had pressed his Cabinet ministers to attend, and nine of them were strategically seated, one to a table, to give the business leaders the best possible access to the executive arm of the Australian Government. The guests on that cool and cloudy Thursday, 6 September 2007, believed the dinner was bringing a busy day to an elegant end. But that evening was not notable so much for what happened at the dinner but for the extraordinary political proceedings that followed.
Still, even to those unaware of the approaching weirdness, the dinner was an event pregnant with political meaning. ‘It was a fascinating moment,’ recalled Geoff Brennan, a Canberra lobbyist, ‘because here was a very successful prime minister now suffering badly in the polls, heading into an election, and in four days the big landmark event of APEC would be behind him. What would he do?’ Brennan, who was also executive director of the APEC Business Advisory Committee, went on: ‘Howard gave a fighting speech. A couple of senior business people said to me afterwards that it was a good, rousing speech, like a coach at half time.’
The fight in his speech consisted in urging APEC to uphold free trade and lead the way towards a solution to climate change. This was the standard APEC host’s embrace of the agenda items du jour. But was there any fight left in Howard himself? At the beginning and end of his speech he spoke of his excitement. ‘It is,’ he began, ‘with a sense of excitement—if somebody who has been in politics for thirty-three years can continue to use that expression, and I do with great enthusiasm—it is with a sense of real excitement that I welcome all of you here.’ He concluded, some fifteen minutes later: ‘It’s an enormously exciting opportunity for anybody in a leadership position to be playing a role in shaping the future of what is the economic epicentre of the world.’
As Howard publicly enthused about his excitement in the leadership position, privately he had been setting out the terms for relinquishing it. Howard was posing as rampant in public, yet in private he was acknowledging that he was politically flaccid. And he was one of only ten people in the room who knew that Downer, while physically present, was focused on alerting the remaining ministers to the imminent meeting where they would consider whether to keep Howard as leader.
After the dinner, the ministers made their way to Downer’s hotel while trying hard not to advertise the fact. Joe Hockey, the Minister for Employment and Workplace Relations, chanced to walk out with John Denton, chief executive of the law firm Corrs. The two men had worked together at Corrs years earlier. Denton took the opportunity to tell Hockey how unimpressed he was that the Prime Minister had recently taken a shot at his wife’s TV show.
Denton is married to Jane Turner, the actor who plays Kath in the hit TV comedy Kath and Kim. The most recent episode of the show had made play with the Federal Government’s unpopular industrial relations policy, Work Choices. Kath’s son-in-law, Brett, came home from work and broke the news that he had been sacked for taking an unscheduled toilet break. But his employer later took him back:
BRETT: They’ve rehired me. Little less money, much worse conditions.
KATH: Oh bloody Howard! I’d like to take away his toot breaks and see how he feels in his jolly lower house.
This was exactly the sort of tactic some employers had been using to cut staff entitlements, although it was illegal under Work Choices to fire workers so as to rehire them on poorer terms. But Howard hadn’t appreciated the political commentary. ‘It probably just reflects the prejudices of the scriptwriter and perhaps the actors,’ he had said.
Denton thought it was precious and paranoid of the Prime Minister to complain about a comedy that merely reflected current social attitudes. He remembers Hockey saying, ‘Don’t worry about it, mate, don’t worry. What I didn’t realise at the time was that he was clearly on his way to the Quay Grand.’
Joe Hockey was about to immerse himself in discussions about Howard’s tenuous future as leader. The Prime Minister had a great deal more to worry about than Kath did. Kath’s popularity, after all, was assured.
It was around 10.30 p.m. by the time all nine ministers arrived and found a seat in Downer’s suite. The Foreign Minister lit a cigar, a habit of his for decades. As he remembers it, he propped open the door to the balcony in an effort to spare his colleagues from choking on the smoke.
Ranged around the room were Joe Hockey, Malcolm Turnbull, Philip Ruddock (Attorney-General), Brendan Nelson (Defence), Julie Bishop (Education, Science and Training), Chris Ellison (Human Services), Ian Macfarlane (Industry, Tourism and Resources) and Kevin Andrews (Immigration). There were brief preliminaries. Downer thanked everyone for coming and reported that he had made phone contact with the absent Liberal Party members of the Cabinet—Abbott, Minchin, Coonan, Brough and Costello—about the matter he wanted to raise. Costello had not been at APEC and, in any case, Downer already knew his views about the leadership. The Foreign Minister said he’d had some conversations with Howard over the last two days at the Prime Minister’s instigation.
Downer then came to the point. His next remark hit the group with the force of an incoming howitzer shell: ‘The Prime Minister thinks we will lose the election and he thinks he will lose Bennelong.’ Downer explained that Howard had asked him to gather the ministers’ views. According to participants, he said Howard wanted the matter resolved as soon as possible.
Here was their leader—the man who had taken them to four election victories and appointed them to their high posts, the man to whom they owed everything—sending a signal of despair. Most telling was his doubt that he could hold Bennelong. Howard had held his seat since 1974. At the last election, his winning margin had been 4.1 per cent. This made Bennelong a bellwether seat. With a uniform swing against it of 4.8 per cent, the Government would fall. It was likely that, as Bennelong went, so would go the country.
If Australia’s second-longest-serving prime minister—the political magician of the era, the man who had dispatched four Labor leaders—wasn’t confident of holding his own seat, then how could anyone in his government have any confidence about anything? Those present also gave weight to Downer’s use of one word in particular—‘resolved’. If the Prime Minister wanted the matter resolved, this strongly implied a decision or action. That could only mean that Howard was looking to be endorsed, or replaced. The group realised that, whatever the Government’s objective chances of winning, their leader was suffering a crisis of confidence.
What followed was an unusually open and honest discussion about their leader, their party and their prospects. But underlying the entire session was the shocking revelation that their leader was in some kind of funk. One participant mused aloud: Is the PM asking for permission to retire? Is he asking us to save him from himself? ‘Overall, it comes down to the Prime Minister’s state of mind—you want a leader who thinks he can win,’ another minister remarked later.
The discussion ran for two hours. Downer drank wine, Turnbull beer, and the teetotaller Ruddock took soda water. At one point, Downer and Hockey excused themselves and stood on the balcony smoking cigars. After the meeting, Kevin Andrews walked back to his hotel and wrote notes ‘because I didn’t think that kind of meeting would happen very often’. A summary he later made of those notes reads, in part: ‘The discussion was broad ranging. Philip Ruddock was against any change. Downer reported that Tony Abbott was of a similar mind. On the other hand, Joe Hockey and Malcolm Turnbull were in favour of immediate change. Hockey argued that the Bennelong campaign would be a distraction throughout the campaign for the PM. Hockey was pessimistic about the PM’s chances of retaining the seat.’
Any discussion of Howard’s retirement axiomatically involved a debate about his successor. ‘There were very mixed views’ about the alternative to Howard, namely Peter Costello, according to Andrews’ notes. No other alternatives were suggested. ‘Some were of the view that [Costello] would be the best bet, while others were more sceptical. Some recounted negative experiences of dealing with the Treasurer.’ Kevin Andrews himself was one of these, Downer said in a later interview.
There were, plainly, deep reservations about Costello from the people who knew him best. Some were confident they could win under Costello; others were dubious. Some thought they would lose the election regardless, and they would only have damaged their next-generation leader for no good purpose.
If the Newspoll that had so shaken Howard had also shown a marked deterioration in support for him personally, there would have been an irresistible case for removing the leader. But there was a complication. Even as the polls showed the Government lacked enough support to be re-elected, Howard’s personal approval rating was holding up. While the Coalition’s primary vote was a poor 37 per cent in that poll and its share of the two-party vote a record low 41 per cent, Howard’s approval sat at a respectable 46 per cent. He seemed to be the reasonably well-regarded leader of an unpopular government.
In the Nielsen poll, published by the Sydney Morning Herald and The Age, Howard’s approval rating was 50 per cent. Malcolm Fraser, Bob Hawke, Paul Keating and Kim Beazley had all rated much lower than that in the terminal phases of their leadership terms. ‘Howard’s problem is that he’s popular, but he’s not as popular as the other guy [Kevin Rudd],’ John Stirton, the Nielsen pollster, said at the time.
The further complication for the party was that the polls also showed Peter Costello to be less popular than his leader. And this was the nub of the Liberals’ problem. There was not one scintilla of polling evidence that the Australian electorate liked Costello any better than it liked Howard. True, a Nielsen poll had scored Costello’s approval at an extraordinarily high 70 per cent; but this was his rating as Treasurer, not as alternative Prime Minister. In another Nielsen poll, taken in April 2007, the suggestion of a hypothetical leadership change from Howard to Costello caused primary support for the Coalition to fall from 37 per cent to 35 per cent.