Lazarus Rising

by John Howard

  Due to those tensions, the opposition appeared to want it both ways. It favoured reform, but not this one. In the end this did not matter because the unions heavied Bob Hawke into pulling the rug on his Treasurer over the whole plan. The consumption tax was dumped, leaving a compromise which did not embody such far-reaching reform. The opposition could readily oppose this.

  15

  LEADER BY ACCIDENT

  In the weeks which followed the collapse of the tax summit, three things caused Andrew Peacock to confront me on the leadership issue. The first of these was my being guest host on the Nine Network’s Midday Show. This program had an enormous audience, and Andrew Peacock had been invited to host it but declined the invitation. My appearance attracted a lot of interest as I was able to nominate people to be interviewed, and amongst those I selected was Bill O’Reilly, the legendary Australian Test cricketer. Secondly, a chance encounter with David Morgan, a senior Treasury official but later to be chief executive of Westpac, led to an embarrassing moment for both me and Jim Carlton, the Liberal MP for MacKellar. In casual discussion Morgan said to me, ‘Hypothetically, if you were Leader of the Opposition, who would you have as your shadow Treasurer?’ and I replied, ‘Jim Carlton’. It was foolish and indiscreet of me and no doubt fuelled the impression, when the story got out, that I was preparing a list of shadow ministers. This was not the case.

  The final straw was at the National Press Club on 28 August 1985 when I gave the traditional shadow Treasurer’s response to the budget speech. I spoke broadly and passionately about the need for reform in numerous areas, including the maintenance of my commitment to taxation reform. It was widely reported as the speech of somebody who had a policy agenda for the opposition.

  My view was that there was nothing disloyal in performing well as a spokesman for one’s party, even if, on occasions, that performance might outshine the contribution of the leader. At one point a member of Peacock’s staff told my chief of staff, Gerard Henderson, that I should tone down my media appearances because they were overshadowing the leader’s contributions. I thought that rather missed the point.

  I was away on a short skiing holiday with my family, at Berridale at the foot of the Snowy Mountains, when Andrew Peacock telephoned me on 2 September and asked that I return to Canberra the following day to discuss the leadership issue. He made what I thought to be an absurd and naïve request that I rule out challenging him for the leadership.

  Peacock’s action was ill-advised. The party did not want him to be removed as leader, and the last thing that colleagues wanted was a public scrap between Andrew and me. Yet that is what they got because of his decision to require what I was unwilling to commit to. I had not been plotting to depose him, I was not gathering any numbers, and I wished to continue working with him as deputy leader of the Liberal Party.

  When I refused to give a commitment not to challenge, Andrew called a special meeting of the parliamentary Liberal Party to try and oust me as deputy leader. His planning had been poor. Rather haphazardly, he had settled on John Moore, MP for the Queensland seat of Ryan, to be his candidate for the deputy leadership. It was reported that he approached Jim Carlton and Wal Fife, but they had refused to nominate against me. Maybe he was advised that I would capitulate, but of course I didn’t, and set about fighting to retain my position as deputy leader.

  I continued to do media appearances, restating my support for him as leader and my willingness to continue working as his deputy. My media appearances also included continued attacks on Labor’s economic management; some colleagues were impressed by the fact that I kept a focus on the main battle, despite the pressure I was under. I carefully telephoned just about every person in the parliamentary party with the simple plea that I be retained as deputy on the basis of my experience and my willingness to work with Andrew as leader.

  Clearly the Peacock camp had not done a systematic job of canvassing for the numbers. I gave a crucial indication that if I lost the deputy leadership I would go to the backbench. Apart from people strongly committed to Andrew and hostile to me, the colleagues to whom I spoke clearly wanted the status quo. Many were quite embarrassed by the public stand-off, and none to whom I spoke expressed a view that I had been disloyal.

  I received a lot of support from close colleagues and friends. Between midnight and 1 am the night before the ballot, Kerry Packer telephoned me from his property near Scone and asked, ‘Sport, is there anything I can do to help you?’ Loyalty and remembrance of past support was always a strong Packer virtue. During the so-called ‘Goanna’ accusations surrounding Kerry Packer in 1984, when many people shunned him, I had made a point of identifying with him, simply because I did not believe for a moment the allegations raised about him. He never forgot this expression of friendship.

  On the morning of the ballot, I expected to lose. I travelled in a Commonwealth car from the Commonwealth Club to Parliament House, with Pru Goward interviewing me for ABC Radio current affairs. Her first question was, ‘Mr Howard, what does it feel like to be in the last day of your time as deputy leader?’ That turned out to be an accurate prediction, but not in the way that she and most others expected. Although the motion to remove me as deputy was carried, when John Moore and I nominated for the vacant position, I defeated Moore by 38 votes to 32. The outcome stunned me and many others. To this day, I believe a number of people who voted for me as deputy leader did so in the belief that I would continue working for Andrew Peacock as leader. They did not contemplate what was to follow immediately after this ballot.

  Peacock asked me and the other members of the leadership group, Fred Chaney and Peter Durack, to his office. He told us that he was in an impossible position and that he would resign. He then returned to the party meeting, informed those present of his decision, to cries of ‘No, don’t’, and some of ‘Grow up’, and called immediately for nominations to fill the vacancy in the leadership of the party. The only other person to nominate was Jim Carlton, and I defeated him by 59 votes to six. There were seven informal votes. After several ballots, Neil Brown from Victoria was elected as deputy leader.

  The outcome was nothing short of extraordinary. It was a case of a party changing its leader by accident, not by deliberation. Whilst I was naturally happy, indeed exhilarated, to have the leadership, I had not been campaigning for it. True it was that I was ready to parade my policy credentials and to argue publicly for the things in which I believed, but I had not been organising a challenge, and would not have challenged Andrew Peacock in the circumstances then prevailing within the parliamentary party. If Andrew had not lost his nerve and sought to remove me as deputy leader, I am sure that he would have continued as leader until the subsequent election.

  The sudden change in leadership was greeted with much enthusiasm within the party and in many sections of the community. There was widespread press endorsement of me, largely on the grounds that I had been prominent in arguing policy substance. Andrew Peacock gave a gracious and light-hearted press conference in which he rather humorously said that he didn’t know if he had ever wanted to be prime minister. The immediate reaction was one of surging public support for the Coalition and me.

  My honeymoon was very short-lived, however. Starting with the leaking of a shadow cabinet strategy paper prepared by Tony Messner, my newly appointed Finance spokesman, the Coalition leaked like a sieve, until a temporary cessation for the 1987 election. The parliamentary party entered a difficult and divisive phase.

  The poll resurgence did not last long, and some tactical mistakes of mine did not help. For example, I maintained the rather rigid policy position that there should be an immediate deregulation of housing interest rates. This was economically sensible but politically very dangerous. It presented the Labor Party in the South Australian state election held on 7 December 1985 with a real gift. Although the Liberal Party opposition distanced itself from the federal policy, it was easy for Labor to make the link. I should have anticipated this and embraced a gradual approach
on deregulation of housing interest rates — which I was to advocate early in 1986 and which was copied by the Hawke Government several months later.

  Although there were flaws in my leadership style, the larger problem was that I was being targeted from within through a torrent of leaks which undermined my authority, almost on a daily basis. The Coalition ended the year in a very weak political position. The early excitement about my securing the leadership had turned to a sense of puzzlement and drift. The great momentum of September 1985 had dissipated.

  For much of 1986 the party struggled. My poll ratings against Hawke were dismal, and until the latter part of the year the Coalition itself was well behind the Labor Party. Polls became the nightmare of my existence, as is inevitably the fate of any Opposition leader who does not keep himself and his party reasonably competitive with the Government and the Prime Minister. Not only did I rate poorly against Hawke but, as time went by, popularity polls were conducted between me and Peacock; predictably, Andrew Peacock began to move ahead on these measurements.

  One particularly damaging poll, conducted by the Quantum research group, commissioned from Western Australia, was leaked extensively to the Australian Financial Review, which gave it extraordinarily heavy coverage, way beyond what could have been justified by ordinary reporting principles. This included extensive reporting on the morning of a nationally televised address by me. This poll was paid for by a group angry over my anti-tax avoidance action as Treasurer.

  The party was in a real bind. By accident it had changed its leader and a substantial section of the party remained profoundly unhappy about this. For some of them, the honourable thing was to grin and bear it and do their best to be an effective opposition. For a much smaller group, the answer was to embark on regular bouts of destructive destabilisation, which of course had a disastrous impact on my leadership authority and badly damaged the opposition.

  Despite the instability and leadership problems, I was determined to push ahead on the policy front. Thus the Coalition’s new and quite radical industrial relations policy was released by Neil Brown on 11 May 1986. For the first time it provided for individual contracts and made very significant changes to the old centralised wage-fixing system. Getting the policy out and winning wide acceptance for it was quite an achievement given the turmoil within the Coalition parties.

  In the first half of 1986, Paul Keating made his widely reported comment on the John Laws radio program that if Australia did not rectify its terms-of-trade problem, it would end up a ‘banana republic’, which I thought at the time was no more than a throwaway line, not the considered warning to the public it was later claimed to be. The terms-of-trade challenge led to an address to the nation from the Prime Minister, with a response from me, in which I laid out an alternative approach. Despite the fog of leadership speculation, my response won considerable praise from the commentariat.

  The Liberal Party held a most successful federal council in Adelaide, in September of that year. Its conclusion coincided with the publication of a Morgan Poll which showed the Coalition ahead of Labor by six points. For a leader who had been under siege from the opinion polls for close to nine months, this was a welcome relief. Generally favourable publicity coming out of the meeting boosted the spirits of the Coalition as the year moved on.

  Notwithstanding our internal problems, the Coalition had had some notable parliamentary successes. It severely embarrassed Paul Keating over his failure to lodge an income tax return for the previous year. This hurt Keating a lot with ordinary voters. When the document suggesting that Keating had not filed his return came into my hands, I found it hard to believe. So I asked Jim Carlton, the shadow Treasurer, to call on Keating, confront him with what we had and indicate that if the information were bogus then the matter would not be further pursued. It was clear from Keating’s reaction that the information was spot-on. I am glad that I had taken the precaution of checking. That precaution did not for a moment dilute the intense public embarrassment Keating suffered.

  Incredibly, Wilson Tuckey, who was a loud barracker for Peacock, criticised me for such caution, and that criticism found its way into the papers.

  The ongoing controversy regarding the position of Lionel Murphy on the High Court also provided the opposition with the chance to wrong-foot the Government for an entire week in the parliament. Although spasmodic, these events continued to give Coalition members hope and to remind all of us that we had a real show of getting on top of the Government, if only our own difficulties could be put behind us. That remained our principal challenge.

  16

  JOH FOR PM

  On 2 June 1987 I arrived back at our home in Wollstonecraft close to 8.30 in the evening. Janette met me at the door and said, ‘They’re in the lounge room’. She was referring to the delegation from the Queensland National Party. This was the end of a quite remarkable day in the distracting saga of the ‘Joh for PM’ campaign, which did such immense damage to our prospects of winning the 1987 election. The delegation had come to signal an unapologetic surrender in a campaign which had engulfed and enfeebled the federal coalition for close to a year.

  The events of the early days of June 1987 may have ended the ‘Joh for PM’ push, but its ramifications would haunt the Liberal and National parties for some years into the future.

  How did it all come about in the first place? As the Coalition in Canberra, and the Liberal Party in particular, struggled through the early part of 1986, there were murmurs out of Queensland that Joh Bjelke-Petersen, that state’s long-serving Premier, might take a tilt at Canberra.

  Disunity within the Liberal Party and the constant speculation about my leadership encouraged anti-Labor people to believe that an alternative to the orthodox Coalition approach in Canberra was needed. Importantly, Andrew Peacock and Joh Bjelke-Petersen had a warm regard for each other. It stemmed from Peacock’s heavy involvement, as Foreign Minister, in negotiating with the Indonesian Government on border issues affecting Queensland. Joh liked Andrew, who was always ready to sing the Premier’s praises in public. There was also the Russell Hinze factor. Hinze, a senior Queensland minister, wanted to be state Premier, and to do that he had to get rid of Joh. How better to achieve this goal than to have Joh launch himself in a bid for Canberra, irrespective of the outcome?

  Peacock and Hinze had a mutual love of horses, which brought them together. Hinze would frequently deride my standing in the polls, largely in private, but from time to time publicly. There is little doubt that through these difficult days Andrew Peacock was in communication with Joh and Hinze.

  The Fraser years had also provided a hangover. At the beginning Fraser worked closely with the Queensland Nationals and incurred the enmity of Queensland Liberals such as Eric Robinson for being too close to them. This friendship soured. Bjelke-Petersen resented the Fraser ban on sand mining on Fraser Island. He thought Fraser was too friendly with Robert Mugabe and had little time for Fraser’s strong anti-South African stance.

  Then there was the bottom-of-the-harbour tax legislation, which wounded many in Queensland’s so-called white shoe brigade. I learned this from comments made to me years later by people who were in a position to know. Many of them were strong financial backers of the Nationals in Queensland, and the Premier frequently mentioned this issue amongst his litany of complaints about the Fraser Government.

  Also, by virtue of his intervention in federal politics regarding his Gair manoeuvre and the appointment of Patrick Field to the Senate, both of which hurt Whitlam, Bjelke-Petersen always felt that the federal Coalition owed him a lot.

  One of the active proponents of Joh’s Canberra campaign was the developer Mike Gore, a fierce critic of my 1982 bottom-of-the-harbour laws. Many believe that Gore paid for research in 1986 by the Canadian company Decima, which allegedly showed that Joh being part of the anti-Labor push would add considerable value to the conservative cause across Australia. Gore had obtained special legislation from the Queensland Government for his Sanct
uary Cove development. To Mike Gore, Joh could walk on water. Lake Burley Griffin would be no problem.

  Joh Bjelke-Petersen was a rural populist. He placed a premium on development, often without too much regard for competition considerations. When it came to investment in Queensland and the economic growth of the state, he was a corner cutter. This approach achieved results and produced a buoyant Queensland economy, which lasted long after he had gone. Sometimes people were unreasonably enriched in the process, yet the state prospered. As Treasurer, I had several heated discussions with him about my insistence on Australian equity being involved in large coal projects. Sometimes his preference was that the entirety of the projects should be owned by Japanese investors. His priority was investment in Queensland. I supported that too, but I wanted Australians to participate in that investment where Australian equity was available.

  Like all premiers, particularly Queensland premiers, he was happy to beat the anti-Canberra drum. Finishing one very cranky telephone conversation with me regarding a foreign investment decision of mine, he said, ‘Why don’t you just leave us alone and let us run Queensland?’

  The Australian newspaper became a prominent vehicle for the propagation of the Joh cause. The editor at the time, the late Les Hollings, gave huge coverage to anything that Bjelke-Petersen said or did. The paper’s editorial pages championed the causes of lower taxes and reduced union power. That was fine by me, but the underlying theme from contributors like Katherine West and Des Keegan was that I wasn’t quite up to the task and a person with the heft of Joh was needed.

  These were all ingredients which led to the ‘Joh for PM’ campaign. They were not, however, the overriding reasons why it happened. In the end it happened because Joh Bjelke-Petersen himself believed that he could become prime minister. It was not rational, but it was real.