McMahon would not listen. He did not agree. Speaking to cabinet on 19 November, McMahon told his colleagues that the trip was ‘very successful in terms of close relation[ship] w[ith] Nixon and Heath — especially Nixon’. He believed that the poor press reception was only because ‘we don’t do enough backgrounding’.24 He would not give up hope that there could come a breakthrough, that the reception would turn around.25 After making a statement to the House about his visits to the US and the UK, he decided to make a broadcast on national television. ‘Both performances,’ reported the British high commissioner later, ‘were depressingly pedestrian.’26
THE problems continued. Amid further ructions with Nugget Coombs, Gorton, and the government’s new arts policy, McMahon could be heard expressing doubts about Howson’s handling of his ministry. ‘For on[c]e [he] blames himself,’ Alan Reid noted. ‘Says he made a mistake.’ Then he was embarrassed when Labor backbencher Norman Foster, citing three instances of it happening, pointed out McMahon’s penchant for altering Hansard.27 McMahon was angered and upset when he heard this. In a performance that left the crew of the plane he was flying on ‘staggered’, he lashed out at his principal private secretary, Ian Grigg, and Reg MacDonald, his press secretary, blaming them for the mess. ‘I will now go through an hour of anguish on Tuesday,’ he said. Gleaning the story afterward, Reid heard that McMahon:
[…] would not listen to anyone and was highly emotional. He wanted the greens retyped before they were issued to the press. MacD[onald] said that this would draw attention to the fact that they were being changed. McM[ahon] wouldn’t listen. According to crew, [he] told both Grigg and MacD[onald] to shut up.28
Then there was a scandal in miniature early in December. Amid efforts to secure a pay rise and an increase in the allowances offered to parliamentarians, following the issue of a report authored by John Kerr, McMahon intervened for what seemed mostly to do with his vanity, and turned it into another example of his panicky leadership. Telling Bunting that he would not consult Whitlam on the deal, McMahon declared, ‘I’m the PM — I make the decisions.’ Then the deal collapsed, and McMahon blamed everyone but himself. ‘Well, the little fellow has made a mess of it again,’ Anthony sighed as he left McMahon’s office, aware that it had set off a fresh round of questions among his backbenchers.29
Then there were world problems. The government’s efforts to present itself as united, professional, and in command of the economy were rebuffed when, in December, the so-called ‘Group of Ten’ — Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, the United Kingdom, and the United States — struck what became known as the Smithsonian Agreement. Intended to allow the world’s industrialised economies to reassess their exchange rates following the August collapse of the Bretton Woods agreement and Nixon’s decision to suspend converting the US dollar to gold, the Smithsonian Agreement posed, for the McMahon government, a diabolical problem. While Australia had not followed the British pound in its devaluation in 1967, its dollar was still pegged to it. Since, under the Smithsonian Agreement, the British pound would rise 8.57 per cent against the US dollar, the Australian dollar would likewise appreciate. McMahon, Snedden, and the Treasury were in favour of allowing this because of its anti-inflationary effects. However, like McEwen had in 1967, the Country Party, under Doug Anthony, wanted the Australian dollar to be devalued, potentially to even remain at parity with the US dollar: as ever, a lower Australian dollar would help the party’s constituency.
What followed was a long, exhausting debate. The discussion went on for three days. Treasury officials, including the newly appointed permanent head, Sir Frederick Wheeler, went in and out of the meeting. The press was excited, its appetite stimulated by wild speculation and a steady stream of leaks and counter-leaks. Trying to prevent this, McMahon forbade his ministers from leaving the cabinet room during his repeated consultations with Snedden and Anthony; trapped inside, bored and tired, ministers gambled and played poker to pass the time.30 The first meeting lasted deep into the morning of 20 December, and left McMahon ‘grey with fatigue’.
Anthony and his colleagues were resisting McMahon’s arguments that Australia had to be part of a concerted world action; concerned by the effect on rural industries and exports, they maintained a consistent opposition to McMahon’s statements. When McMahon suggested that very few people disputed the correctness of the government’s actions in the 1967 devaluation decision, Anthony cut across him immediately: ‘I do.’ When McMahon, pressing for Snedden’s position, said that the government ‘couldn’t survive’ if it stayed with the US dollar, Anthony was blunt: ‘Done like a dime [too] if we went with Treasurer.’31 According to Alan Reid, this kind of intransigence left McMahon:
[…] nearly incoherent. He is reported as having said to his intimates, ‘Christ, Christ we’re in a bloody terrible mess — the coalition could be gone. What can I do? If I give in to Anthony I’m gone, finished. If I don’t, we split.’ Asked if he thought the CP [Country Party] was bluffing he said, ‘No, they’re not — they’re determined to get their way.’ … McM tore into Fraser. ‘He is no bloody help at all. He’s in the CP camp.’ Anthony, Sinclair, and Nixon kept storming into McM’s office. There were numerous conferences between Anthony, Sinclair, McM, and Snedden.32
By the end of that first meeting on 20 December, cabinet agreed on a 6.32 per cent appreciation against the US dollar, but decided to hold over a final decision until the International Monetary Fund could give its approval. A draft statement was prepared: cabinet had ‘reached certain general conclusions’, but ‘technical arrangements associated with these conclusions must be completed before a decision can be announced’.33 But now there was a problem with Snedden and the Treasury, which had pushed for a full 8.57 per cent appreciation. According to McMahon, Snedden told him privately on 21 December that the governor of the Reserve Bank had said that the decision was disastrous and that an 8.57 per cent appreciation was necessary.34
When cabinet resumed, the argument began again, exposing further rifts and driving colleagues further apart. Fraser was sympathetic to the arguments coming from Anthony, Sinclair, and Nixon, and Snedden was growing frustrated with McMahon’s attempts to broker a compromise. A conference in McMahon’s office with Anthony, Snedden, and McMahon appeared to succeed, but the cabinet meeting had to be adjourned so McMahon could go to Victoria to avert a move by the Liberal conference in the Wimmera to run a candidate against Country Party member Robert King, who was also minister assisting the minister for primary industry. It was the last fight that McMahon would have wanted at that moment, and he returned to Canberra at two-thirty in the morning, exhausted and grey.35 Only a few hours later, in the morning of 22 December, cabinet met again.
The agreement on a partial appreciation, struck in that private meeting, came undone as Anthony, McMahon, and Snedden debated over information and the Reserve Bank governor’s real position. According to the cabinet notebooks, Anthony persisted with his desire for parity with the US dollar. McMahon advocated an 8.57 per cent appreciation on the basis that ‘if we go lower [we] will be forced higher’, but, clearly aware of the divisions with the Country Party, wanted a ‘genuine compromise’ even more. ‘What we do is in nation’s interest,’ he told cabinet. ‘I put those interests above everything. [We] have to look at whole thing hard and cold.’ McMahon admitted that the collapse of the coalition was entirely possible. ‘If we have to divide we just have to divide,’ he said.36 The debate went back and forth, breaking for further private conferences between the parties. But they seemed to get nowhere. Eventually, Anthony stood up and declared that the government was finished. ‘That was a fairly traumatic moment,’ Nigel Bowen said later, ‘and he was chancing his arm a bit.’37 Anthony began to walk out. It took a snide reminder from Snedden, that if the Country Party left there would be no devaluation whatsoever, to bring him back to the table and begin to compromise.
In press reports, the conces
sions that cabinet eventually hammered out represented an almost complete capitulation to the Country Party. ‘McM[ahon] surrendered,’ Reid wrote. ‘… Undoubtedly a win for the Country Party.’ It was a compelling perspective: the long, very public wrangling for control of policy in an area where the two parties so sharply diverged ensured that any kind of compromise would have had to be seen as a victory for Anthony and his ministers. In reality, however, the decision was not as bad as made out. The Australian dollar would now be pegged to the US dollar: sterling would be abandoned once and for all. The Australian dollar would appreciate 6.32 per cent against the US dollar, and there were suggestions that the government — as it had when the Holt government resisted devaluation — would offer assistance to primary industries. Those within the Treasury were not much upset. ‘The Treasury was well satisfied with the outcome, which indeed did McMahon and Snedden credit,’ John Stone said later.38
Economically, the decision was sound; politically, it was disastrous. The length of time it took to reach the decision spoke to everything that was wrong with the government: a divided cabinet, an antagonistic coalition, stubborn ministers, and a prime minister, in McMahon, who was indecisive. The contrast between how Holt had handled the currency-exchange issue in 1967 and how McMahon had was sharp, and reflective of McMahon’s parlous political position. The press that followed the decision was caustic, critical of both McMahon and the Country Party. ‘All the ingenious verbiage,’ The Sydney Morning Herald editorialised, ‘all the facile explanations cannot hide the fact that, after twisting and turning for three humiliating days, the PM submitted to extortion and allowed government policy to reflect narrow sectional interests. He did himself great harm.’39
But McMahon was never one to be down for long. Two days out from Christmas, on the same day that a bomb was discovered at the Lodge and the press wrote headlines about assassination plots, he was on the phone to spread his side of the story. ‘McM[ahon] phoning everyone, including me, to tell me about his great and glorious victory in the currency battle,’ Reid recorded. ‘If he goes on long enough he’ll convince himself that he had such a win.’40
It had been a long year, full of turmoil and upset, upheaval and change. ‘Every day a crisis,’ Bunting had written in June.41 As Graham Freudenberg would later suggest, the pillars that had held up the government for so long were crumbling, falling down.42 In a short space of time, the certitudes of the past — the suspicion of Red China, the rightness of the war in Vietnam, the dependable relationship with the US, the gospel of cabinet solidarity, the line of Liberal unity, the talk of Coalition principles, and a heavy degree of support in the press — were giving way. Everything was in flux; everything was changing.
Would McMahon be able to salvage something in the year that followed?
CHAPTER THIRTY-NINE
The Stories Told
1984
As the autumn of 1984 grew colder, McMahon became noticeably more jittery and anxious. His demands, and his expectations of Bowman, already inconsistent and frantic, were suddenly edged with worry and anger. ‘The Howson diaries have caused this flutter,’ Bowman decided, when he came to write in his diary.1
News had recently broken of the imminent publication of the voluminous diaries of McMahon’s former colleague and intimate, Peter Howson. Over 1,000 pages long even when edited, The Life of Politics: the Howson diaries documented in minuscule detail Australian political life from the final years of the Menzies government until the end of McMahon’s. As with any diary, the events referred to alternated between the prosaic and the sensational, the revelatory and the mundane. An indicative example of all of these was Howson’s record of McMahon’s use of the telephone; as one observer would soon write, ‘The phrase “Bill McMahon rang” punctuates the diary like a Greek chorus.’2 Now, as the bleak months bled on, extracts of the diaries were beginning to leak, and journalists were calling McMahon’s office in Westfield Towers for comment and interviews.
Initially buoyed by the attention, news of the pending publication soon caused McMahon to be anxious. Asked what he should do, Bowman told McMahon not to make any response to the newspaper extracts. McMahon heeded the advice, but would not ignore the reports. When The Sydney Morning Herald reported Howson’s views of McMahon — ‘Quite accurate!’ Bowman noted — the former prime minister took immediate issue with the detail.3 He never had dinner at the Melbourne Club, he said. Howson, therefore, was wrong.4 A day later, he obtained a copy of the book and went off again. McMahon immediately saw two occasions in which Howson said they had been together when they supposedly were not, and thereafter told the office all about how wrong Howson was. ‘In each case Howson was a liar; emphatically a liar,’ Bowman wrote in his diary.5
McMahon could not dismiss the diaries and leave them alone. He returned to them again and again in conversation, unprompted — but now increasingly with anger. ‘WM’s vituperation about the Howson diaries is extraordinary,’ Bowman observed. Having discarded his ghostwriter’s advice and talked to a journalist, McMahon told Bowman that there was as much truth in Howson’s diaries as there was in Anthony Grey’s account of Holt’s disappearance in his book, The Prime Minister Was a Spy. It was laughable, thought Bowman: ‘McMahon hasn’t even read the Howson book!’6
McMahon seemed unable to perceive that Howson’s diaries might be more accurate than he thought. One night, Ruth Fairbairn, David Fairbairn’s wife, spent an hour and a half on the phone with Sonia. She asked about Howson’s diaries. Was it true that McMahon had called every night from Washington and from London, while he was prime minister, as Howson had recorded? Sonia told Fairbairn that it was not true. But then Sonia pressed McMahon the next morning about the matter. ‘Did you make those calls?’
McMahon, telling Bowman about this the next day, seemed not to realise that his answer undermined all his vituperation and anger about Howson’s book. Was Sonia right to deny that he had made the calls? Had he made the calls?
He did not remember, McMahon said.
It was a rare admission. Despite many occasions that should have disabused him, McMahon was always as bullish about his memory as he was about his abilities. What Bowman had experienced in the six months he had spent working for McMahon was as nothing to those who had worked with and around him in Parliament. McMahon’s memory and his claims to greatness had become fabled there. McMahon had Munchausen Syndrome, Jim Killen used to joke to press and politicians alike, after McMahon had become prime minister. The reference, to the German nobleman satirised by Rudolf Erich Raspe for the fantastical stories and exaggerations he habitually told at the dinner table, in absolute belief of their veracity, was no accident: the scrutiny that McMahon received as prime minister showed that the gulf between his claims and his conduct was gaping.
It was so egregious that the journalist Maximilian Walsh said there were two William McMahons: a ‘public McMahon’ and a ‘private Billy’.7 The former was the myth, the reputation, crafted through these boasts and exaggerations, these stories and impossibilities. The latter was the reality: the mistakes in Parliament concealed in altered Hansards, the private confusions and reliance on briefs, the claims for credit during success and the disavowals of responsibility during failure, the divergent recollections of those who had known better.
The dramatic gulf between McMahon’s claims — what they suggested of his talents and qualities — and the reality of his actions led some to wonder about his mental state while prime minister.8 Was there a reason, beyond incompetence, that explained his difficulties as prime minister? Did his problems in the job stem from an illness, a disorder, a diagnosable condition, perhaps? At its most ugly and insensitive, was he in some kind of mental decline?
Most people were uncertain. Journalist Alan Ramsey said later that McMahon was a fantasist who might well have been paranoid, but certainly did not have Alzheimer’s. To Ramsey, McMahon’s failings, inconsistencies, and lies were simply a matter of charac
ter: ‘That was just the manner of the bloke.’9 Laurie Oakes told Susan Mitchell that McMahon was a ‘pathological liar’ who bordered on the edge of having a disease.10 And if he once thought McMahon was ‘half way around the bend’ — to the point where comparisons with Evatt were not unreasonable — Mungo MacCallum was later less certain.11 ‘I don’t believe there was anything pathological about it. He was just a not very bright politician who had gone well past the Peter Principle and was scrabbling for purchase in any way he could.’12 Those who had worked with McMahon saw no evidence for it. Kim Jones saw no basis for it at all.13 Ian Grigg and Jonathan Gaul said the same: ‘Not at all.’14
An absolute answer — both at the time that Bowman was working for McMahon, and in the years since — was unlikely to eventuate. But it is more plausible, and more consistent with his behaviour over a long period, that the gulf between reality and McMahon’s claims stems from his repetition of stories over the years. Those stories had, like stones in a fast-moving river, become worn and smooth in their constant retelling; the facts that countered them, or which might have suggested alternate interpretations, had been forgotten — completely. McMahon had told his stories — of great victories, of expertise, and excellence, of fighting his way all on his own — so often, to himself and to others, that he had come to believe them absolutely.15 By the time he became prime minister, McMahon lived as though he was recounting those stories, believing himself far more ready and capable in office than he actually was. He had become his image of himself.
And when reality seemed to diverge from this — as Howson’s diaries chronicled, in detail — McMahon could not comprehend it, could not fathom how it might be right, had to dismiss it as lies, lies, and more lies. To do otherwise might be to suggest that his story was wrong. But that could not be. His story was the real story. His story was the right one.
Tiberius with a Telephone Page 55