by John Howard
Not since its formation in 1944 had the Liberal Party of Australia faced a federal election in less propitious circumstances. Its 40-year coalition with the Nationals had been brutally broken. It had, for months, been racked by leadership speculation and, due in no small measure to these two factors themselves, had not completed enough policy work to go to the people with a comprehensive program, credibly costed.
Early on 2 June 1987, Ian McLachlan telephoned me in Canberra to say that he was having absolutely nothing further to do with the Joh campaign. McLachlan’s flirtation with Joh had hurt us a lot. He was a credible figure. No end of effort had been made to encourage him to endorse the federal coalition. Yet he had stubbornly refused, saying that he didn’t think that we had the bottle to take the tough decisions needed if we got into government.
Alexander Downer, who had only been elected in 1984, had three months earlier publicly offered to vacate his very safe seat of Mayo to make way for McLachlan as a Liberal candidate. It was a big thing for Downer to do. He had his heart set on a long political career but was motivated by his deep affection for the Liberal Party and driven by his alarm at the spectacle of disunity presented by the Liberal and National parties. There had also been the Carrick offer.
Whatever had been his prevarication in the past, by 2 June McLachlan had become quite angry. He told me, after a meeting with them, that the Queenslanders had done no serious work. They had no policies to speak of. His disillusionment gave me some hope. It was sorely needed.
The Queensland Premier had been in California when Hawke announced the election and was thus caught quite unprepared.
John Stone also telephoned me that same day. He had secured a spot on the Nationals’ Senate ticket for Queensland. John would be the main architect of Joh’s taxation policy and was the one person who gave some nationwide credibility to the Queensland push. John had always been quite an admirer of Bjelke-Petersen. In his call he hinted that the Queenslanders knew that the ‘Joh for PM’ campaign could not succeed. He said that they wanted to see me as soon as possible, to discuss ways of working together to defeat the Hawke Government.
So it was agreed that Joh and his senior National Party people would see me at my home in Sydney later that evening. They had been in Melbourne during the day, where the abortive meeting with Ian McLachlan had taken place.
Accompanied by Tony Eggleton, Liberal federal director, and Grahame Morris, my chief of staff, I went to Sydney for one of the more remarkable political meetings of my entire life. ‘They’, to whom Janette referred, did not include the man himself. At the last minute Bjelke-Petersen, who had come to Sydney, had decided to sit it out, either at the airport or at some hotel. In the lounge room of my home, I found three emissaries from the north. They were Sir Robert Sparkes, the formidable president of the Queensland Nationals, his likeable and friendly deputy, Charlie Holm, and the state director, an advertising man called Fred Maybury. They hurriedly tried to explain Joh’s absence. Then we began our discussion about what was to happen.
They were an interesting trio. Holm was a traditional Country Party man from rural Queensland. ‘He’s the sort of man you would buy a horse from,’ remarked my wife later. He was seen by most people as an honest broker. Sparkes had played a major role in building the National Party organisation and had a good political brain. He had never been enthusiastic about the ‘Joh for PM’ campaign and only signed up quite late in the piece, when he realised that the momentum had gathered so strongly that it could not be ignored. Fred Maybury, given his advertising background, was completely obsessed with market research. He had been an enthusiast for the Canberra push by Bjelke-Petersen from way back.
They hadn’t come to apologise but to acknowledge, grudgingly, that the game was up. They accepted that the Liberal and National parties, facing an election on 11 July, needed to cobble together as much unity as possible, even though it was the 11th hour.
Maybury had brought an armful of research material with him. He plonked it on the lounge room floor. Given that the die was already cast, I didn’t quite see the point of this. The bizarre feature of the evening was that he kept telling all of us that it would have been possible for Joh to have made it, if it hadn’t been for what he saw to be the perfidy of the NSW Nationals.
He was right, but I was the last person to think that the NSW Nationals had done the wrong thing. To me, they had been heroes. For all the political skills and strategic planning of which the Queensland Nationals were alleged to have been capable, they had ignored the most fundamental step needed to achieve their goal. They had not enlisted the support of the National Party organisation throughout Australia for the ‘Joh for PM’ campaign. Without this they never had any hope. Doug Moppett and his colleagues had outsmarted them.
The real rabbit killer to the ‘Joh for PM’ campaign had been delivered at a meeting in my office in Canberra just a few weeks earlier. Then an agreement was struck, not only to maintain the decades-old joint Senate ticket between the Liberal Party and the National Party in New South Wales, but to implement a strategy that would cripple Joh in New South Wales.
That meeting was attended by Doug Moppett, the chairman of the NSW Nationals, his state director, Jenny Gardiner, Bronwyn Bishop, president of the NSW division of the Liberal Party, Dr Graeme Starr, the state director of the Liberals, as well as Tony Eggleton, Ian Sinclair and me.
Moppett had shown genuine strength in the face of the Queensland push. From the beginning he had been scathing about what his northern confrères had in mind, and contemptuous of the way in which they had undermined his federal leader, Ian Sinclair. He and Jenny Gardiner shared the historic warmth of the NSW Nationals towards cooperation with the Liberals.
I had always strongly supported close cooperation with the Nationals. The reaffirmation of the joint NSW Senate ticket was very important. Equally important was our agreement that if any ‘Joh for PM’ Nationals stood against sitting Liberals, then the NSW Nationals would campaign against the Joh Nationals in support of sitting Liberal candidates. In similar vein, the Liberal Party would support sitting Nationals and Nationals endorsed by the party organisation in New South Wales against any ‘Joh for PM’ Nationals. This tight electoral pact was designed to shut out the Queenslanders. It succeeded.
Although Sparkes and Holm said very little, Maybury bitterly complained about what the NSW Nationals had done. It was quite extraordinary, because he was venting his spleen to someone who thought that the NSW Nationals had behaved honourably and in the best traditions of close coalition harmony. I thought that Doug Moppett, in particular, had displayed tenacity and strength where many others melted away.
We talked at our Wollstonecraft home for about an hour and a half. The message out of the meeting was clear. The ‘Joh for PM’ campaign was finished, but they thought it had all been rather unfair, because if the rest of the National Party had come on board it might have been successful!
Given all that had happened over the preceding few months, I felt considerable relief. There still remained the awkward issue of a meeting between the Queensland Premier and me. We all knew that without that meeting and a declaration from the two of us that we would work together, there was no hope of stitching up even a façade of unity for the election campaign. They wanted me to go and see Joh in Brisbane in the next few days.
After Sparkes, Holm and Maybury left, I held a council of war with my two Canberra colleagues and Janette. Despite all the rough edges, and the possibility that I would be criticised for going cap in hand to someone I had called a ‘wrecker’, we all agreed that it was more important to achieve the public outcome we wanted than worry about personal dignity. To have any hope at all in the election we needed to put as much of the Coalition disunity behind us as possible. We could not even begin to do this unless Bjelke-Petersen and I had been seen to have mended fences.
I went back to Canberra that night with Grahame Morris and Tony Eggleton. The following day was devoted to a series of phone calls between me, Sparkes and
Stone.
In my discussions, I told both Stone and Sparkes that whilst I accepted that a visit to Brisbane was necessary I would not undertake it in the absence of a guarantee that Joh would come good on acknowledging that his Canberra fantasy was over. They gave me those guarantees. I remained dubious but arranged to fly to Brisbane the next day.
There was a lot of fog at Canberra Airport the following morning, but that was not the real reason for my delayed departure on the RAAF jet. Maybury had rung Eggleton very early to say that Joh was having second thoughts — more likely that Maybury had persuaded Joh to have those second thoughts. At one point Maybury rang my home looking for me. He spoke to Janette and told her that the whole thing was off. Agonising phone calls followed, with my speaking to Sparkes, Maybury and finally Joh. I obtained Joh’s word. His press secretary, Ken Crook, even read out the news release Joh would issue.
I finally left for Brisbane. The meeting with the Queensland Premier was awkward but it achieved its purpose. A statement was issued which declared our determination to work together to defeat the Hawke Government. Deference was paid to the Queensland Nationals’ views on taxation, without compromising anything which the Liberal Party might say on the subject during the election campaign. Bjelke-Petersen’s demeanour was of a man who knew that his great dream would not be realised.
When I returned to Canberra, the house was still sitting. There were predictable cries of derision from the Labor side of the house that I had behaved weakly towards Bjelke-Petersen. I was happy to wear all of that. Hawke even moved a censure motion against me; that was going too far. He sounded rather foolish. A week earlier I would not have thought anything like what had been achieved in the previous 48 hours was remotely possible. Against all the odds of recent months, I now gave the Liberal Party just a faint chance of winning the election racing towards us. But the odds against us were colossal.
The really fatal blow to our 1987 election campaign was the discovery by the Labor Government of a double counting error in the Liberal tax policy after that policy had been released on 10 June at Box Hill in Melbourne.
Savings from cutting expenditure on certain programs were also included in savings from reducing payments to the states which, in turn, had included some payments under those same programs. The mistake involved several hundred million dollars. The tax policy document had been largely prepared in my office but also with the involvement of the relevant shadow ministers. All had been working under near impossible conditions, but when parties make mistakes of this kind, they have to carry the blame. No excuses are permitted. It was our mistake, and when it was exposed, it did us irreparable damage. If the policy had been prepared under different conditions, then adequate time would have been available for further checking, and I am sure that the mistake would not have arisen.
I had to go through the painful experience of calling a press conference, admitting the error and endeavouring to explain that the tax commitments we had made elsewhere in the policy could be properly funded in another manner. I did the best I could but the damage had already been done. Although he did not tell me at the time, Tony Eggleton later let me know that a private poll conducted for the party by Gary Morgan not long after the tax error was discovered showed that the Coalition was 18 points behind Labor.
Although it was of little ultimate consolation, the rest of the campaign went remarkably well for the Liberal Party. Bob Hawke refused to debate me, which barely earned a rebuke from the press.
The Liberal and National parties achieved a nationwide swing of 1 per cent. The final result on a two-party-preferred basis was 50.8 per cent for Labor to 49.2 per cent for the Coalition; we had actually shaded the ALP on the primary vote. Unfortunately for the opposition parties, the swing had not been evenly distributed, and despite the nationwide swing in its favour, the Coalition suffered a net loss of seats to the ALP. The Liberals won the suburban seats of Lowe in Sydney and Chisholm in Melbourne, but lost Michael Hodgman’s seat of Denison in Tasmania as well as the Queensland seats of Forde, Petrie, Hinkler and Fisher. Labor also captured the Northern Territory from the Country Liberal Party. Hawke increased his majority from 16 to 24 seats.
The cumulative leadership difficulties within the Liberal Party, the broken coalition as well as the policy mistakes had severely damaged our chances. It was, nonetheless, clear from a regional analysis of the poll that electors had especially punished the Queensland Nationals. Not only did both parties lose seats in Queensland but the loss of the Northern Territory could also be attributed in no small part to the Queensland connection.
The ‘Joh for PM’ push destroyed more than the Coalition’s prospects in the 1987 election. It began the Queensland Premier’s own political decline. Not only had he been unsuccessful in his bid for Canberra but, in the process, had done much gratuitous harm to what was still seen as his side of politics in its bid to unseat the Hawke Government.
In a few short months he went from being a political Messiah to someone whose best years were behind him. To all but his most ardent followers Joh increasingly became a political liability.
For all the damage he had done to our prospects in the 1987 election, I recognised the huge contribution he made to his state as Premier. At his state memorial service in Kingaroy, some 18 years later, on 3 May 2005, I said, ‘The reality nonetheless is that he made a massive contribution, a defining contribution, to the growth and the expansion of the state of Queensland.’
The ‘Joh for PM’ campaign had wrecked our chances of winning in 1987. I must acknowledge though that disunity in the Liberal Party helped create a vacuum on the anti-Labor side of politics. This encouraged Joh and his supporters to think that they could successfully indulge their ludicrous political fantasy. A completely united, strongly performing Liberal Party would not necessarily have aborted the Joh push but at the very least it would have given its architects greater pause to think.
17
THE COUP
After the election Andrew Peacock stood for the leadership against me and I defeated him by 41 to 28. He was then easily elected as deputy leader and immediately became shadow Treasurer. Thus began a period of time in which we worked together in quite close professional harmony.
There was a strong feeling within the party that I should be given a fair go. Most accepted that the period leading up to the election campaign, particularly the rupture of the federal coalition, had presented me with an impossible task at the 1987 election and although we had lost seats, the Liberal vote had held up better than might have been expected. Also, due in part to the influx of new MPs from both the 1984 and 1987 elections, there was greater support for my brand of economic policy. Peter Reith, Alexander Downer and Julian Beale had entered in 1984; John Hewson in 1987.
The period from the 1987 election until the end of 1988 was one of calm and unity within the Coalition, with one exception. That was the debate on Asian immigration. After the 1987 election the leaks stopped, and gradually the Liberal Party assumed the appearance of unity. The federal coalition was re-formed, and the federal influence of the Queensland Nationals greatly diminished.
The double-dissolution election had not given the Hawke Government control of the Senate, so the opposition was able to kill off the Australia Card by threatening to block any regulations made under Australia Card legislation, using its majority in the Senate. The Australia Card needed regulations to operate. Bob Hawke did not mourn the loss of the Australia Card.
1988 was significant for the heavy defeats inflicted by the Liberal Party or Coalition whenever there was an electoral contest. Yet in overall terms, the Coalition still finished the year without clear political dominance over the Government. This was because it proved impossible for me to break completely free of doubts regarding my leadership tenure.
There were four by-elections federally. On 6 February Michael Pratt won the seat of Adelaide from Labor, with a two-party-preferred swing of 8.5 per cent. The following month there was a 9 per cent two-party sw
ing to the opposition in the safe Labor seat of Port Adelaide. On 9 April, the conservative voters of Queensland in the Darling Downs electorate of Groom showed what they thought of the antics of the Queensland National Party the previous year. The Liberal Party captured the seat with a 21 per cent swing in its favour away from the Nationals. There was a solid 5.2 per cent drift from Labor. In October of the same year in the seat of Oxley, vacated by the newly appointed Governor-General, Bill Hayden, there was an 11 per cent primary swing against the Labor Party, although it retained the seat. It would take the disendorsed Liberal Pauline Hanson, in 1996, to claim this Labor stronghold from the ALP.
On top of the federal swings there was the Liberal victory in New South Wales, with Nick Greiner ending almost 12 years of Labor Party government.
With Andrew Peacock and me working together, the new leadership flash-point became John Elliott. He had become the federal president of the Liberal Party just after the 1987 election and immediately set about making plenty of statements on policy matters. This was difficult for me and indeed for Andrew Peacock as most of the statements Elliott made were about economics. He regularly advocated the introduction of a broad-based consumption tax. That was something that had never been completely taken off the table, but the timing and political handling of it was entirely a matter for me and the parliamentary leadership.
Media interest in Elliott was huge. He was a boisterous, larger-than-life character, and there was a naïve, even childish, belief within some journalistic and business circles that what the country needed was a key business figure to have a ‘sabbatical from the boardroom’, go into parliament for a couple of terms, fix the country and then return to business. To these simplistic souls, it was all as easy as that. The two people who fitted this bill and who were most frequently touted were John Elliott and Ian McLachlan. The interface between business and politics is both frequent and very important. Understanding business is a crucial ingredient to being a successful politician in government, particularly at a senior level. Likewise a pragmatic understanding of the political process will always serve a businessman well. My experience, however, has been that an easy exchange from business life to the political and vice versa is often elusive. Understanding another’s craft is one thing; practising it successfully is something entirely different.