Lazarus Rising

by John Howard

  Labor was understandably bitter at the failure of the Bjelke-Petersen Government to follow normal custom and replace the deceased Queensland ALP senator Bert Milliner with his chosen Labor replacement, Mal Colston. The Labor Party was foolishly stubborn in rejecting the initial request of the Queensland Premier to submit three names from which a choice would be made.

  The upshot was that Whitlam was left with only 29 senators supporting him against 30 from the Coalition when the crucial Senate vote to defer supply was taken in mid October. Patrick Field, Bjelke-Petersen’s chosen replacement for Milliner, did not participate in the vote, but this did not alter the fact that if normal practice had been followed, the vote would have been tied at 30 each and supply blocked rather than deferred.

  Several months earlier, the NSW Coalition Government had likewise chosen Cleaver Bunton, an Independent, to replace Lionel Murphy, who had been appointed to the High Court. This did not have the same consequences as the Queensland appointment because Bunton voted with Whitlam on the supply issue.

  In 1977 the Australian people voted overwhelmingly for a constitutional change, effectively guaranteeing that when a casual vacancy occurred in the Senate the replacement would come from the same Party as the former senator.

  Unlike May 1974, Whitlam did not call an election. He was determined to prevail, asserting that as governments were formed by the party having a majority in the lower house, the Senate had no right prematurely to terminate a government so formed by forcing an early election. Politically, he had no option. He would face annihilation at an early poll. Fraser’s biggest challenge was to hold the Coalition together as the weeks of deadlock dragged on.

  His argument was as simple as Whitlam’s. Our Constitution gives co-extensive powers to the Senate and House of Representatives, so the government of the day needs the approval of both houses to spend money. As the Senate had not given that approval, the Government could not continue to function and should call an election to resolve the issue. Politically, Fraser had to maintain his position. He knew that he would win an early poll, just as Whitlam knew he would lose it. Stripped of rhetorical excesses, it was a titanic clash of political wills between two determined men. A compromise was never likely once the Senate had deferred supply. Fraser did offer to pass supply if Whitlam agreed to hold an election the following May. This was rejected.

  Once the two protagonists had staked out their ground, interest focused on who might blink first, and increasingly, as the weeks passed, how or when might the Governor-General act. Whitlam’s operating assumption was that Kerr would always do as he was told. He badly misread his choice as Australia’s effective Head of State. Kerr would be no cipher. No one understood this better than John Carrick. In the days that followed the deferral of supply, he said to me several times, ‘John Kerr will want the judgement of history. He will do the right thing by the office.’ Carrick had known Kerr for a number of years, and well enough to divine that he was not in any way beholden to the Labor Party.

  John Kerr was called ‘Old Silver’ at the Sydney bar because of his impressive mane of white hair. Bob Ellicott knew him well. They had been barristers together. He shared Carrick’s opinion that Kerr would want to be seen as having done his Constitutional duty. On 16 October, Ellicott published a prescient legal opinion of what Kerr might have to do; in it he raised the option of dismissal of Whitlam and his ministers as a way through. In a drama which involved many lawyers (mostly from the Sydney University Law School), Ellicott emerged, courtesy of this opinion, as the real star.

  Tirath Khemlani, the Pakistani commodities dealer who had been put in touch with the former Minerals and Energy Minister Rex Connor when the latter was on the hunt for overseas loan moneys, landed in Canberra in the middle of the imbroglio, wanting to see the opposition. Ellicott and I were given the job of talking to him and getting details of his contact with Connor. It was disconcerting; if Australia wanted to borrow large amounts of money for development purposes, it beggared belief that it would not act through traditional banking channels. Khemlani was at most a fringe operator, and Connor’s behaviour had made Australia look foolish. Bob Ellicott and I found Khemlani a likeable man when interviewed at the Wellington Hotel, Canberra, but we didn’t see him and Australia borrowing abroad as a natural fit.

  Canberra had a beautiful sunny day on 11 November, not a cloud in the sky. The view down from the War Memorial (surely the most impressive monument of its kind in the world) must have been as spectacular as ever, so ordered and serene. Sir John Kerr must have felt anything but serene as he attended the Remembrance Day service, having already resolved upon a course of action which would result, almost certainly, in him being the only Governor-General in Australia’s history to dismiss an incumbent Prime Minister.

  What followed is central to the political folklore of Australia. Judgements made are set in cement. It had been a defining political clash between two implacable foes. It fell to John Kerr to find a solution which referred that clash to the Australian people for resolution. He did just that, at immense personal cost.

  The money was fast running out; Whitlam wanted a half-Senate election, which would resolve nothing; Fraser would not relent. So Kerr, recognising that it was, above all, a political stalemate, remitted that stalemate to the people for adjudication. It was a thoroughly democratic solution.

  When Whitlam called on him to advise a half-Senate election, Kerr asked Whitlam if he would advise a general election, that being the only action which would secure Senate passage of the supply bills, thus resolving the deadlock. Whitlam refused to give that advice, whereupon the Governor-General withdrew Whitlam’s commission as PM, handing him written reasons for his decision.

  Kerr immediately commissioned Fraser as caretaker PM, on condition that he advised a general election; secured passage of the supply bills; and made no appointments or conducted any inquiries into activities of the Labor Government. Fraser naturally agreed with these conditions.

  Earlier in the day, none of us knew this was coming when the scheduled joint party meeting took place, although most sensed that time was running out and something would soon give. Phillip Lynch said, ‘Keep patient; I think things are coming to a head.’ He had just participated in a meeting of party leaders, convened by the PM to see if common ground to solve the impasse could be found. The meeting was a public-relations prelude to Whitlam advising Kerr to call a half-Senate election.

  When the house met, a debate on the supply issue ensued. I continued my normal routine. Leaving the library, I ran into journalists in Kings Hall, who informed me that there would be a half-Senate election, because that is what Whitlam had told his caucus.

  The house rose for lunch at 12.55 pm. After eating I went for a walk. As I returned through the front door of Parliament House, Frank Crean, Deputy PM, hurried, and I mean hurried, past me. We exchanged brief greetings. Later I would learn that he was on his way to a hastily convened meeting at the Lodge to talk to the just-dismissed Prime Minister.

  I also encountered Tony Eggleton, the Federal Director of the Liberal Party. He appeared to be waiting for someone. It was Malcolm Fraser, who was on his way back from Government House, having just been sworn in as caretaker prime minister. Tony gave nothing away, and I did not then know what had happened. Only minutes later I was in the opposition lobby, and the door from Kings Hall swung open and in strode Malcolm Fraser followed by Tony Eggleton; they both disappeared inside the Opposition leader’s office. Fraser and I exchanged greetings on the way through. I noticed that he was holding something in his right hand. I realised later that it was the Bible on which he had just been sworn in.

  The bells rang for the resumption of the house at 2 pm. I went straight to the chamber, and whilst the bells were still ringing Vic Garland, a shadow minister from Western Australia, came up to me and some other MPs and simply said, ‘Kerr’s sacked Gough.’ I was stunned. Moments later Fraser entered the chamber as the bells stopped sounding. I knew that Garland had not been
kidding when the speaker, Gordon Scholes, who knew the procedures precisely, called Fraser, not by his customary title of Leader of the Opposition, but by the title ‘Honourable member for Wannon’. By then Fraser was no longer the Leader of the Opposition.

  Fraser then told the house that he had been commissioned to form a caretaker government and that a double dissolution election would be held on 13 December 1975.

  My lasting memory of the debate which followed — on a Labor no-confidence motion against the new caretaker Prime Minister — was the remarkable control that Scholes, the speaker, kept over the emotionally charged, angry Labor MPs. Only a few hours earlier, they had been told by their Prime Minister that there was to be a half-Senate election. They now faced an election for the whole parliament, which they knew in their hearts they could not win. That election would be fought on the record in office of the Whitlam Government.

  The no-confidence moved by the Labor Party was carried on party lines, with little debate. The sitting was then suspended so that the speaker could call on the Governor-General with the motion, seeking the reinstatement of Whitlam as Prime Minister. Meanwhile, the Senate had met and passed the appropriation bills, thus guaranteeing supply, one of the conditions of Fraser’s appointment as caretaker PM. Incredibly, Labor’s Senate leader, Ken Wriedt, had not been informed of the dismissal and believed that the Coalition had capitulated when it agreed to pass the bills. This was a huge blunder by Whitlam. Armed with knowledge of the dismissal, the Labor Senate president could have delayed the sitting and at least given his party room for a tactical response.

  After our sitting had been suspended, I mingled with a large crowd of angry Labor MPs, staffers and public servants that had gathered outside Parliament House. I ran into Clyde Cameron, who railed to me against what had happened. He predicted an anti-Fraser backlash and said, ‘You won’t win, and even if you do the country will be ungovernable.’ He was wrong on both counts. It was this crowd which, later, gave such a hostile reception to David Smith, the Official Secretary to the Governor-General, when, as tradition required, he read from the steps of Parliament House the proclamation of the Governor-General dissolving the two houses of parliament. Watching over Smith’s shoulder was Gough Whitlam, who then delivered his well-reported declaration, ‘Well may we say “God save the Queen”, because nothing will save the Governor-General.’1

  All of us felt shock and disbelief at what had happened. It troubled me that Kerr had had to intervene. I knew that he would cop intense abuse from Labor supporters. Yet he had been left with no alternative. Only he, exercising the reserve powers of the Crown vested in him under the Constitution, could sever the Gordian knot.

  Opposition MPs gathered in small groups, discussing the day’s events, speculating about the campaign ahead and expressing just a tinge of apprehension about the reaction of the Australia public to such a momentous event.

  That evening Bob Ellicott and I walked together through Kings Hall and came across Jim McClelland, Minister for Labour and Immigration in the Whitlam Government. Known in the Sydney legal profession as ‘Diamond Jim’ on account of his immaculate dressing, McClelland had, as a solicitor, briefed Kerr to appear in disputes involving the Federated Ironworkers’ Association. They had been bitter encounters, and Kerr and McClelland had become good friends. McClelland was very irate and said, ‘You had the Queen’s man in the bag right from the beginning.’ It was a revealing remark. It was untrue but, importantly, betrayed the fact that Labor had operated all along with the belief that because Kerr had been appointed by Whitlam, he would, when the crunch came, do what Labor wanted. It was a monumental miscalculation, for which McClelland, given his long association with Kerr, no doubt felt a special responsibility.

  The next morning, the political analyst Malcolm Mackerras dropped into my office and boldly said, ‘You realise that you are now enjoying your last weeks as member for Bennelong. There will be a massive reaction against Kerr sacking Whitlam, and even a safe seat like yours will be lost by the Liberal Party.’ I both thought and hoped that he was wrong, which of course he was. Thirty-one years were to pass before Malcolm, in 2006 and following a redistribution which made my seat even more marginal, again predicted that I would lose Bennelong. This time his forecast proved accurate. In that three-decade period, both Australia and Bennelong had undergone much change.

  10

  A MINISTER

  After 11 November I did not see or speak to Malcolm Fraser until the triumphant party meeting following his massive victory on 13 December 1975. The Coalition’s majority of 55 was by far the largest in Australia’s political history. There had been almost a clean sweep of seats in Queensland; only Bill Hayden’s Oxley was narrowly held by the Labor Party. Even the staunchly pro-Labor city of Canberra had returned a Liberal in one of its two seats.

  It had been a bitter campaign, before a deeply polarised electorate. The 35 per cent who habitually voted Labor exhibited their hostility over the dismissal by heaping enormous personal invective on Sir John Kerr, and in this they were aided and abetted by Whitlam and his former ministers. The remainder of the electorate, consisting of habitual Coalition supporters and those in the middle, were grateful for the opportunity of voting out what they regarded as the most incompetent government Australia had had, at least since World War II.

  Once an election had been called, debate about the merits or otherwise of the Governor-General’s actions receded into the background, except for those who would resentfully feed on this for the rest of their political lives. The election became a referendum on the performance of the Whitlam Government, and once this was the case, Fraser’s victory was assured.

  Naturally Malcolm Fraser and Phillip Lynch were unanimously re-elected to their respective positions at the start of the Liberal Party meeting following our victory. It was an amazing gathering, full of elation, with a sizeable chunk of the party room comprised of people I had never met before. Not only were our ranks swollen by people who had won seats from Labor, but also by those replacing a number of former members who had retired voluntarily.

  As a shadow minister, I had some hope of becoming a very junior minister in the new government. I guess, like all other shadow ministers, I had done all sorts of calculations in my head about my prospects, and I knew that Fraser wanted a smaller cabinet than the 32 or 33 which made up the shadow ministry. So I was not overly optimistic.

  Just after the meeting ended, John Bourchier, the chief whip, said that the Prime Minister wanted to see me in his office, and I got the clear impression that Bourchier knew I was to become a minister. I felt a keen sense of anticipation and my best hopes were realised when, a short while later, in the Prime Minister’s office, Malcolm Fraser told me that he wanted me to become Minister for Business and Consumer Affairs. I was tremendously excited and couldn’t wait to tell Janette.

  Whilst I thought that I had done a good job as a shadow minister, I knew that it was a fine judgement for a leader when choosing younger members in a new ministry. Malcolm Fraser and I have had our differences over the years and our relationship became very distant after I became Prime Minister, but I will always be grateful for the opportunity he gave me back in December 1975. It was a generous promotion at a critical time.

  Business and Consumer Affairs was a new portfolio arrangement which brought together many of the business regulatory functions of the federal government, including responsibility for the Trade Practices Act, the Prices Justification Act, and the Industries Assistance Commission and also, potentially, for the national regulation of companies and securities. Also included was the Customs Bureau, of which the Narcotics Bureau, carrying the federal fight against drugs, was part. The business community applauded this new grouping of responsibilities. The cluster of duties I had been given attracted intense scrutiny from the business media.

  The Fraser Government inherited a fragile economy. Inflation had soared to 14.4 per cent; unemployment stood at 5.4 per cent; the budget deficit had blown out to a
projected 1.8 per cent of gross domestic product (GDP). Federal government spending had risen by a staggering 46 per cent over the two-year period of 1973–74. The Whitlam Government had been an incompetent economic manager; there was a near universal judgement that it would be a long time before Labor would again be trusted with the purse strings.

  Most of the senior members of the incoming Government — Fraser, Lynch, Anthony, Sinclair, Nixon, Bob Cotton, Peacock and Greenwood — had been prominent in earlier Coalition governments, and were heirs of the Menzies years, which had been ones of stability and prosperity. They had been, also, years of government regulation, an inward-looking Australian economy, high levels of tariff protection and a centralised wage-fixation system. This regulatory, activist role for government had seemed to work during that time. There had been much activity and full employment. Why then should that approach be changed?

  Maintenance of the status quo might have been justified if the world had not changed. The world, however, had changed quite dramatically in the early 1970s. The challenges for the Australian economy were quite different from what they had been previously; different responses were needed. The Whitlam Government had failed totally to realise this. The new Coalition Government would now have the opportunity of doing things differently, and better.