Tiberius with a Telephone

by Patrick Mullins

  That day, as word spread that Kerr had terminated Whitlam’s commission and protesters descended on Parliament House, McMahon went outside to watch. He stood on the steps, waving ‘gaily’ at the shouting crowd, at one point lifting a small child onto his shoulders so the child could see all the action.14

  But while his colleagues were wholly elated by Whitlam’s dismissal and their restoration to government, McMahon had significant reservations. In addition to disagreeing with Kerr’s decision to dismiss Whitlam, he disagreed with Fraser’s undertaking to Kerr to refrain from investigating the legality of the loans affair and a criminal pursuit of those involved. McMahon believed that a criminal conspiracy had occurred — and he was determined to pursue it.

  Thus, on 14 November, three days after Whitlam was dismissed, McMahon had his staff call the office of the secretary of the Executive Council. They sought information about the minutes, memoranda, and schedules for the Executive Council meeting where the authority to seek the loans had been granted. When those enquiries were deflected, McMahon himself picked up the phone. On 17 November, he spoke with David Reid, the secretary of the Executive Council, about the documents. At first, he was uncertain about the nature, use, and confidentiality of the documents. Reid ‘refreshed’ his memory. Then McMahon asked Reid to provide him with copies. Reid’s refusal, on grounds of propriety, ‘disturbed’ McMahon:

  He [McMahon] explained that he understood Mr Fraser had given the Governor-General an understanding that the caretaker Government would not initiate a court case against the ministers who participated in the meeting on 13 December 1974 but that he (McMahon) had overcome this problem by arranging for a private person to initiate a civil action against them.15

  He already had a copy of the minute, McMahon told Reid, but he needed the schedule and memorandum in order to complete the documentation necessary for that court case. If Reid would agree to provide it, McMahon would send a staff member to his home to collect it. Reid was disbelieving. If he, McMahon, were still prime minister, he asked, would he really expect a departmental officer to agree to a request like this?

  But McMahon just laughed. If the court case proceeded, he went on to say, the documents would likely be subpoenaed anyway. He rang off. Fifteen minutes later, Reid’s phone rang again. It was the QC tasked with preparing the case, ringing to express his disappointment that he was not releasing the documents to McMahon.16

  That disappointment, however, halted nothing. Three days later, still in the throes of the campaign, solicitor Danny Sankey launched a court case against Whitlam, Cairns, Murphy, and Connor, accusing them of offences under the Crimes Act. It was a dubious case that would drag on for years, and while it attracted considerable press attention, and would come to place pressure on Fraser to go back on his undertaking with Kerr, there was initially more concern within the government and bureaucracy about McMahon.

  Word of his approach to Reid reached Fraser’s ears. He told McMahon that he was ‘not to be involved in any activities designed to circumvent the guidelines’ of caretaker government and Fraser’s undertaking.17 McMahon reluctantly agreed to follow the order, confirming it in a subsequent call to Reid on 22 November.18

  Now the secretary of the attorney-general’s department became involved. Upon reading Reid’s notes of the approach, Harders informed his minister, senator Ivor Greenwood, that McMahon himself might be guilty of contravening the Crimes Act. Inciting a Commonwealth official to leak material contravened section 7a of the Act when it was read alongside section 70, Harders wrote; inciting that offence in order to have others charged with an offence made McMahon’s actions even ‘more worrying’.19

  Greenwood met with Fraser on 3 December to let him know of Harders’ concern,20 which the secretary summed up more formally two days later:

  On the question of law that has been raised it might be said that the approach to Mr Reid [by McMahon] was only a suggestion and that it fell short of inciting, by Reid [sic]. However, the dividing line, if there is one, must be very faint and the circumstances, looked at as a whole, are worrying.21

  But then there was the election. On 13 December, despite Whitlam’s energetic campaign and the fury directed towards Fraser and Kerr, the caretaker Liberal-Country Party government was elected in stunning fashion. Labor lost thirty seats, almost half of its previous total, and Fraser’s power was confirmed with the largest House majority of any Australian government. The emphatic result underscored Fraser’s refusal to investigate the Loans Affair. ‘The people had passed their judgment,’ he said later. ‘That was it, so far as I was concerned.’22

  McMahon’s actions, and the potentially serious consequences that could follow from them, were an irritant that needed to be brushed away. So, despite Greenwood’s letter advising that ‘prima facie, there has been conduct warranting serious concern,’23 Fraser declined to pursue it. He delivered the message to McMahon to keep his hands off. The matter was over. McMahon got the message. ‘I knew McMahon was running around up to his tricks,’ Fraser said later. ‘I couldn’t control what he did, but I could make damn sure that the government, my government, did not get involved.’24

  This message rankled with McMahon. Though he observed it, he never agreed with it. In the years that followed, he criticised Fraser about it in the party room. He argued in public for the pursuit of Whitlam, Cairns, Connor, and Murphy. And he cheered when Robert Ellicott, who succeeded Greenwood as attorney-general on 22 December 1975, tried to handle the case unbound by Fraser’s undertaking. But throughout it all, Fraser refused to budge. Two years later, in 1977, Ellicott would resign as attorney-general, arguing that Fraser’s view — expressed in a cabinet decision on 26 July 1976 — prevented him from exercising his duty. In a subsequent newspaper column, McMahon cast Ellicott’s resignation in a noble light, and grabbed some of it for himself. The rule of law ‘is what Mr Ellicott is fighting for,’ he wrote. ‘So am I.’25

  FRASER had no time for McMahon. His distrust of McMahon and dislike for him never went away. ‘McMahon had an insatiable ambition,’ he would say later. ‘He had no sense of value. He wasn’t immoral; he was totally amoral.’26 The two men would repeatedly clash in the years that followed Fraser’s assumption of office. In public, McMahon would pay Fraser his due; in private, he was far less effusive, more critical. ‘He never lost a desire to be listened to and taken account of,’ Howard later said. ‘Looking back, I guess he probably was frustrated that his counsel was not sought more frequently.’27 If there was one point that would cause McMahon to lose his enthusiasm and his energy for political work, it was this. He could not stand to be ignored.

  He sought to display his expertise and experience publicly. From 1976 onward, McMahon wrote a fortnightly column for The Sun newspaper, dispensing advice and arguments about economics, housing, budgetary measures, uranium, taxation, and other areas of interest. He put forward his own proposals, and criticised his party when they were ignored. ‘I presented these policies to the Government in October 1977,’ he wrote in March 1978. ‘As usual, it is only nibbling at the problem of guaranteeing repayment of [housing] deposits.’28

  He was needling Fraser. He was restless without a portfolio, and unbound by cabinet solidarity. He had not been accorded the respect he felt he deserved as a former prime minister and party leader. In addition to his columns, he fed questions to Labor. ‘On several occasions, in opposition,’ Barry Jones recalled, ‘the telephone would ring in my office and I would hear the familiar quavering voice: “Bill here. Have you looked at page 3 of the Age? What the government is doing is an outrage. At Question Time, why don’t you ask Malcolm …”’29

  Fraser was not unaware of McMahon’s disgruntlement. Letters from McMahon expressing this were frequent. ‘I refer to your letter of March 5, in which you say that you are disappointed to find that I was receptive to media mischief,’ McMahon wrote to Fraser, in 1979. ‘Your assumption is incorrect. I seldom rely on hearsay info
rmation and did not do so on this occasion.’ Fraser knew when not to inflame a situation. ‘Don’t answer,’ his office scrawled on the letter.30 A few months later, after Tony Staley and Doug Anthony were nominated by Fraser to represent him at functions for migrant communities in Lowe, McMahon wrote to lambast Fraser for ignoring him and the make-up of the electorate:

  It is essential that we sustain the support of the various ethnic groups in Lowe if we are to keep on winning the seat … I can assure you that Mr Staley means nothing to the Italian community in my part of the world … These matters are politically important. The ethnics are emotional and volatile. It is better to let them know that we care for them rather than to send a representative who has little emotional commitment to their cause.31

  To this, Fraser was diplomatic, not stooping to engage: ‘I will keep the points you made very much in mind,’ he said.32 Fraser wanted McMahon gone. Peter Kelly, who returned to work for McMahon in the wake of the 1975 election as his press secretary, recalled an approach from treasurer Phillip Lynch, who asked what could be done to stop McMahon’s ‘irritating criticism’, which was getting on Fraser’s nerves:

  I told him the best way was to take his [advice]. He asked me when did I think the former Prime Minister would retire and I said there was no sign of it and in any event certainly not until he had been awarded a knighthood. He [Lynch] said he would see what he could do … Several weeks passed and as I had heard nothing I asked Phillip [Lynch] what had happened. With great embarrassment, he said that he had had no luck and that Malcolm was adamant [that there was to be] no knighthood.

  McMahon was eventually knighted, in October 1977 — but only at the insistence of an influential Liberal Party officer, Kelly later claimed.33

  Attempts to press a claim for some revival would always go astray. Fraser would have none of it. When, in 1977, Lynch was forced to step down from his role amid health problems and allegations of corruption, there were brief suggestions that McMahon be returned to the Treasury. He disavowed them, but his heart was not in it. ‘I am not an anxious aspirant for Treasury honours,’ he said. ‘However, if I was asked to be Treasurer, and the terms were right, of course I would accept.’34 That was never going to happen. Fraser opted to give a vaulting promotion to a young John Howard, the minister for special trade negotiations.

  But McMahon’s future in politics was coming under pressure. His longtime seat was moving slowly but surely from a reliably Liberal-voting electorate to one that was much more uncertain. It did not help that McMahon — still living in Bellevue Hill, maintaining an office out of the electorate — no longer enjoyed the prestige of a minister, or the excuses that an absent minister could offer to constituents. As a seventy-year-old and Father of the House, he could not claim to be a young up-and-coming member, full of promise.

  Thus, in the lead-up to the 1977 election, McMahon faced repeated challenges to keep hold of his seat. Aware that a mooted redistribution would have put Lowe into the Labor Party’s hands, McMahon had to beat that back and simultaneously fight a preselection challenge from John Abel, the Liberal member for Evans, whose seat was being abolished.35 McMahon’s Labor opponent at the election, Richard Hall — a former Whitlam staffer — was intent on giving McMahon a scare, and had a public following from his work as an author and journalist. On election night, the scare momentarily appeared to have worked when voting figures suggested that McMahon had lost. McMahon was written off, Alan Wright recalled, in those tense, vital hours. Television and news reporters were telephoning to ask McMahon about conceding. But McMahon dismissed the suggestions, pointing out that results from the vital Strathfield booth had not been counted yet. ‘He called it right,’ Alan Wright recalled. ‘He knew he had won.’ McMahon did win the seat — but there was a 3.4 per cent swing against him.36

  Rumours that McMahon would retire swirled within the Liberal Party and in the seat, encouraged in no small part by McMahon himself. Bruce MacCarthy, who had worked on McMahon’s behalf and represented him for years in the electorate, believed that he had an undertaking from McMahon: come the next election, McMahon would announce his intention to retire and endorse MacCarthy as his successor. When MacCarthy and his wife, Leanne, sought to get a home loan, McMahon telephoned the bank manager and made that understanding explicit. ‘Why didn’t you tell us that your husband was going to be the next member for Lowe?’ the bank manager asked Leanne.37

  But when the question of preselection came up, ahead of the 1980 election, McMahon announced he would re-contest. MacCarthy was shocked. It made little sense. Why did McMahon not retire? As one observer had recalled of Billy Hughes, was it just that McMahon, while bereft of much interest in causes or principles, still preserved an interest in ‘the game’?38

  McMahon later claimed that he had only done so because of fears within the party that Lowe would be lost if he were to retire. ‘I wanted to go before the last election,’ he would say later, ‘but my seniors in the party didn’t want that.’39 For all the party’s dislike of and frustration with McMahon, it does seem to have been the case that they acted to ensure McMahon got through without a challenge. ‘If it hadn’t been arranged,’ Alan Wright recalled, ‘McMahon would have lost his last preselection.’

  McMahon was also considerate of his superannuation. Under changes mooted by Fraser and the minister for finance, Eric Robinson, McMahon’s superannuation payouts would have been irreparably harmed should he continue to stay in politics. As he wrote to Fraser in 1980, drafted changes to his retirement benefit would have seen either a $15,802.99 reduction in his annual pension entitlement or a loss of $293,367.92, were he to take it as a lump sum. ‘The figures highlight in a dramatic way the unfairness and injustice of the scheme,’ he wrote.40

  He wanted out, he told Robinson a fortnight later, and he wanted a guarantee that he would not be disadvantaged by any future scrutiny of the parliamentary superannuation scheme. ‘Bill, I can not give you any details because the only decision taken is that the Act will be looked at,’ Robinson told him. Were ministers sympathetic to his situation? McMahon asked. ‘Yes, there is an understanding by ministers that the Act has worked against your interests, and a desire for amendments to occur.’ Robinson told him that whatever McMahon thought, he should do what he felt was in his best interests.41

  McMahon agreed to stand. As Alan Wright claimed, Fraser promised in exchange that he would make sure McMahon’s pension was unaffected. At the election in October, the government lost twelve seats. The swing against McMahon was 4.1 per cent, just under the national average. Commentating on television that night, he appeared shaken by the result.

  BY the end of 1981, McMahon decided that he had had enough. He had been palmed off and ignored for too long. His advice that increases in the sales tax should be offset by lower income-tax rates had gone unheeded in John Howard’s spring budget. ‘I drafted documents to this effect last February and to my horror, when I thought it had been accepted, it was disowned,’ he said. Other measures in the budget horrified him. McMahon blamed the ‘far too great’ influence of the public service: ‘I do not think the government gives enough consideration to the views of people other than bureaucrats’. He reached back to his own time to burnish his criticisms. ‘In the time when I was Treasurer and again Prime Minister,’ he said, ‘I made the decisions together with my parliamentary colleagues. I did not allow the bureaucrats to dominate me or the government.’42

  Crucially, he felt that Fraser had not lived up to their bargain. He met with the prime minister on 17 December. According to McMahon, the meeting was relatively conciliatory — at least at the beginning. McMahon said that he did not believe Labor would elect Bob Hawke as its leader and that he doubted the government would lose an election in 1983. He criticised Peacock and Snedden. He said he might write a book about Fraser’s election to the leadership. He discussed the economy, how it was faltering. He believed Fraser was impressed by what he had to say. Then he told him t
hat he was going to resign. The year had been a lost one, he said. Fraser’s government had failed to act wisely on almost everything — financially, economically, taxation, housing. He complained that Fraser and Howard had shut him out of vital discussions. Therefore he would resign.43

  McMahon announced the decision on 4 January. He repeated his criticism of the ‘lost year’ of 1981. ‘I don’t want to have to repeat it,’ he told reporters. ‘There is no point working your insides out for nothing,’ he said. He made a point of noting that it was not retirement. It was resignation.44

  He announced the decision at his home in Drumalbyn Road, Bellevue Hill. He did it in the downstairs sitting room. Sonia sat next to him on the green-and-white divan, her arm in his. Thirty-or-so reporters clustered on the orange, brown, and green armchairs in front of them, separated by a small glass coffee table. Though he had put on a suit for the occasion, the sultry afternoon heat saw McMahon remove his jacket and throw it over the arm of the divan. The end was to be informal and resentful.

  He was done with Canberra’s bureaucrats, done with Malcolm Fraser, done with the inhibitions of the parliamentary party, he told the press. ‘I’d rather be freed from the necessity to continuously work without achieving the objectives I thought were essential … I would not go on and waste my time there knowing that my opinions were so different to those of the government,’ he said.

  ‘I do not believe I could put up with another year like last year. It did not matter what contribution I made or what experience I had, no notice was taken.’ Although there were no leadership contenders, he argued that Fraser had to listen more to his backbenchers. ‘They are closer to the people and not dominated by bureaucratic opinion.’

  McMahon told the reporters that he was looking forward to spending time with his family. ‘Darling, I hope you’re going to have a better world,’ he told Sonia, midway through the press conference. ‘I’ll even do my best to help you with the kids.’45