To the Bitter End: The Dramatic Story of the Fall of John Howard and the Rise of Kevin Rudd

TO THE

BITTER

END

For Norm Hartcher

My first tutor in politics, and the man who taught me how to laugh.

PETER HARTCHER

TO THE

BITTER

END

The dramatic story behind the fall of John Howard and the rise of Kevin Rudd

First published in Australia in 2009

Copyright © Peter Hartcher 2009

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without prior permission in writing from the publisher. The Australian Copyright Act 1968 (the Act) allows a maximum of one chapter or 10 per cent of this book, whichever is the greater, to be photocopied by any educational institution for its educational purposes provided that the educational institution (or body that administers it) has given a remuneration notice to Copyright Agency Limited (CAL) under the Act.

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Cataloguing-in-Publication entry:

Hartcher, Peter

To the bitter end: the dramatic story of the fall of John Howard and the rise of Kevin Rudd / Peter Hartcher

9781741756234 (pbk.)

Includes index.

Rudd, Kevin, 1957–

Howard, John, 1939–

Australia. Parliament—Elections—2007.

Political campaigns—Australia.

Political leadership—Australia.

Australia—Politics and government—2001–

324.99407

Typeset in Adobe Garamond 12/15pt by Midland Typesetters, Australia

Printed and bound in Australia by Griffin Press

10  9  8  7  6  5  4  3  2  1

CONTENTS

Prologue The Last Supper

PART ONE Shock

1 Don’t Punch the Old Man

2 ‘We Are Stuffed’

3 A Night of Long Cigars

4 Madness Maddened

PART TWO Awe

5 Man of Steel

6 Overreaching

7 Overheating

8 Overruling

9 Daddy Turns Nasty

10 Pissed Against the Wall

11 The Primate Model of Ruling

12 ‘There Was No Way He Had the Numbers to Topple Me’

13 Beware of Thyself, Old Man

PART THREE Vengeance

14 A Very Determined Bastard

15 Exterminate

16 Brand Rudd

PART FOUR Defeat

17 A New Model For Old Governments

18 ‘Shit, We Have to Do Something’

19 The Wizard of Oz

20 ‘A Profound Failure’

21 Don’t Think of an Elephant

22 Splurging Into Oblivion

23 The Victorious Principle of Similar Difference

Note on Sources

Acknowledgments

Index

PROLOGUE

The Last Supper

Two days after losing the 2007 election, John Howard phoned Peter Costello. The outgoing Prime Minister wanted to invite his deputy to The Lodge for a final gathering of the Howard ministry. Wags quickly dubbed it the Last Supper.

Improbably, John Howard’s social invitations to Peter Costello had become something of an issue in the affairs of the land. The 2007 biography of Howard by Wayne Errington and Peter van Onselen had disclosed that the Prime Minister had invited a number of his ministers and their spouses to dinner at The Lodge over the years, but never the Costellos.

This detail, innocuous on the face of it, became news because it hinted at the subterranean strains between the two men who had been running Australia. ‘It doesn’t worry me,’ Costello said at the time the book was published. ‘I’m just as happy eating fish and chips on a beach.’

And an invitation to The Lodge carried a bitterly sardonic flavour for Costello. The official Canberra dwelling of prime ministers since Stanley Melbourne Bruce took up residence in 1927, Costello had been craving The Lodge for years. His ambition had been thwarted. Despite his pleas, public and private, Howard had refused to quit the prime ministership.

Even now, Howard was not going to any special lengths to reconcile with his Treasurer. The Prime Minister was only observing proprieties—it was a lunch for the entire ministry. But Costello did not even go so far as observing the proprieties.

‘I’m not coming to lunch,’ Costello replied on the phone. ‘We have just been voted out. There’s no point going to The Lodge.’

Three months later, Costello’s successor as Treasurer, Wayne Swan, was able to report that he and his wife, Kim, had been invited to dine with Kevin Rudd and his wife, Therese Rein, at The Lodge and at Kirribilli House. The two Queenslanders had not always got along. But their relationship had been repaired and they were now working well together. Swan remarked: ‘So we have already exceeded the Peter Costello–John Howard benchmark.’

PART ONE

SHOCK

1

Don’t Punch the Old Man

It was September 2007. The Federal election was to be called in a little over a month. John Howard and a handful of his top lieutenants sat down to a secret briefing in the genteel commonwealth offices in Melbourne’s Treasury Place. Joining them was the Liberals’ advertising campaign team. The meeting was to review the ad campaign for the election that loomed.

The party’s pollster, Mark Textor, gave the gathering grim news. The Howard Government was facing a tough struggle for re-election. It looked terminal. The balding, blunt-talking Textor ran a presentation demonstrating why.

His research with focus groups of voters found entrenched perceptions of the Howard Government. Certainly, the positive views of happier times persisted. Australians still regarded Howard as a man who had the courage of his convictions. But harsher attitudes had developed since the last election.

Consistently now, Textor said, the Howard Government was seen as out of touch, too old and too tired. When participants turned to see how the Prime Minister was taking this news, they discovered that Howard had dozed off.

Out of touch, too old, too tired.

Asked about this incident some months after the election, Howard said in an interview, ‘In twelve years, the odd Cabinet minister would have closed his or her eyes for a minute, myself included. But no one ever went to sleep.’ He denied that he had dozed off in this particular meeting: ‘Absolute tripe,’ he called it.

Another participant said that not only had it happened but it had made a big impression: ‘There were ad people in the room who hadn’t seen Howard for a couple of years, since the last campaign, and they were amazed. People went out after the meeting into the corridor and said to each other, Wow, did you see that?.’ Voters’ perceptions would be difficult to change because, it seemed, they were right.

·  ·  ·

It was in this phase of the election that the previous Labor Prime Minister of Australia decided to offer some political advice to the next Labor Prime Minister. With the informal electoral contest well under way, yet with the formal commencement of hostilities still to come, Paul Keating phoned Kevin Rudd. His counsel? To get more aggressive.

The tip was well meant. It was also rejected. ‘You’ve got to throw a few punches,’ Keating told Rudd in the course of a long phone conversation. He wanted to see Rudd hurt John Howard.

That was in character. One of Keating’s many aphorisms was, ‘If you’re in politics, you’re in the conflict business’. It had always been his style to throw the most direct and damaging blows he could. Many years earlier, a livid Keating had sworn on the front steps of the old Parliament House in Canberra that he would make Howard wear his leadership of the Liberal Party ‘like a crown of thorns’. The then treasurer was enraged because he suspected that Howard had condoned a political attack on his private life. His anger then had been almost uncontainable.

Kevin Rudd politely thanked Keating for his advice, but privately he counselled intimates to follow another course entirely. Rudd was much impressed by the wisdom he had heard years earlier from Tony Blair. As a fresh backbencher in the Federal Parliament, the Queenslander had been part of a delegation of Australian Labor politicians to meet the then Prime Minister of Britain. Blair explained that he had taken power amid considerable unease about British Labour—the party had been out of office for a long time, it was still associated with trade union radicalism, and it had been subjected to a Tory campaign of demonisation. So, the new British Prime Minister said, he had decided to be guided by the need to supply the British public with three vital commodities—reassurance, reassurance and reassurance.

Rudd’s essential approach to taking power from John Howard was to let the sixty-eight-year-old expire gently of natural causes rather than try to beat him to a bloody pulp.

Rudd’s campaign was certainly vigorous, but he would never openly savage Howard. Throughout, he respectfully called the older man ‘Mr Howard’. So did Labor’s TV ads. In the so-called Emma Jane ad, a mum in her suburban kitchen complained about the rising cost of living, concluding with the line: ‘You’ve lost touch, Mr Howard. No offence, but you’ve just been there too long.’

Labor’s focus groups of voters had evidently turned up precisely the same sentiment as Mark Textor’s had for the Liberal Party. Howard was still held in some popular regard, but he had been around too long and was now out of touch. Howard was shrivelling as a result of his own misjudgments and his sheer longevity.

The Liberal Party’s confidential research showed that there were three principal reasons why the Howard Government was likely to lose the election. This proved to be accurate. The party’s findings were later made public by Howard’s successor as leader of the Liberal Party, Brendan Nelson, who had not seen them while he was a minister in the Howard Cabinet. Howard was secretive with party research and withheld the most sensitive work from all his colleagues, including his deputy.

But five months after the election, Nelson said: ‘I’ve seen the research now. There were three reasons the Government lost. First was longevity. It was the longevity of Howard, Costello and Downer, but Howard in particular. Second was Work Choices. A significant number of people voted Labor for the first time, and Work Choices had a lot to do with that. Third was our approach to climate change.’

Each of these liabilities was self-inflicted—longevity of the leadership, Work Choices and climate change policy. The Howard Government was not demolished—it imploded. Rudd’s task was to position himself as the reassuringly competent alternative. When the Government fell, it would fall to him.

The Labor Party’s campaign team summarised it succinctly in its mid-2007 strategy review: ‘Many people are ready to switch to Labor. Need to REMIND them of the benefits, then REASSURE voters who have switched to us that they have made the right choice.’

Rudd was confident that he was on course to win the 2007 election. He was chiefly concerned not to frighten voters with bellicosity, but to reassure them with his trademark calm. The biggest risk to Labor’s prospects, the party leadership concluded, was that Howard might do something dramatic to breathe new life into the fast-fading Government. ‘My psyche after the 2004 election was that we couldn’t take anything for granted,’ said Labor’s campaign director and national secretary Tim Gartrell. ‘We were so battle-scarred, and John Howard was a tough old dog. He was a master.’ Would he once again take Labor by surprise with a dramatic manoeuvre?

The Labor campaign had a Costello contingency plan, a team of officials on standby researching Costello and developing lines of attack against him. In the event that the Coalition suddenly changed its leader, Labor was determined not to be left surprised and naked. It had an alternative strategy for campaigning against a Prime Minister Costello.

2

‘We Are Stuffed’

When John Howard read the poll published on Tuesday, 4 September 2007, at the beginning of the week of the Sydney APEC summit, all the energy drained out of him and all his fight left him. For only the second time in his thirty-three-year career, he fell into profound despair.

Howard was famously relentless. He once summed up his success in politics as a case of ‘persistence more than luck’. One of his nicknames was the Eveready Bunny. And he loved a fight. ‘We always took the view that you always act as if you’re in opposition and your back’s to the wall—and you fight accordingly,’ his long-time chief of staff, Arthur Sinodinos, recalled. Another of Howard’s nicknames, courtesy of US President George W. Bush, was the Man of Steel.

He had been girding himself for the greatest fight of his life, his last election campaign. He was going to attempt something only one other prime minister had accomplished—a fifth consecutive victory. Only his hero, Sir Robert Menzies, the founder of the Liberal Party, had succeeded. But now Howard’s hopes turned to ash.

He had expected the Australian public to rally around him as they approached the choice between their long-serving leader and the arriviste Kevin Rudd: ‘I didn’t contemplate retiring in early 2007,’ Howard told a political intimate. ‘I mean, it was obviously going to be tough, but I thought, We’ve still got six or seven months, and he’ll make mistakes and he’ll run out of puff. And, as we get closer to the election, people will say, Well, we don’t mind [Rudd], but not just yet. We’ll give him another run around the course, another run in the paddock, before we vote for him.

‘And that, in the end, they’d stay with us. I mean, that was my thinking right through until the end, towards the end.’

It was not until this day in early September—just eighty-two days before the Australian people sent him to electoral oblivion—that it struck Howard with full force that a majority would not stay with him after all. Howard had lived through terrible polling before and had always triumphed in the end. His Government had been lagging in the polls all year, yet his confidence in his own powers did not desert him until now. ‘I guess around September,’ he said, ‘I started to think that it was never going to shift.’

On that day, recalled his closest confidant in politics, Foreign Minister Alexander Downer, ‘he spoke to me on the phone on the Tuesday and he asked me to meet him’.

With twenty foreign leaders arriving in Sydney for the Asia-Pacific Economic Conference (APEC) summit, it was a frenetic week for Downer. He was at his Sydney hotel, the Quay Grand in Macquarie Street, in a meeting with his Coalition colleague, Trade Minister Warren Truss and some APEC officials when he took the Prime Minister’s call. He finished the meeting and walked the few blocks to meet Howard at the Commonwealth Parliamentary Offices at 70 Phillip Street, the discreet office space provided for all Federal ministers when they are in Sydney. He found his leader in a state of despondency.

Downer recalled: ‘On the Tuesday his thinking was, We are stuffed—we’re going to lose the election and I’m going to lose Bennelong.’ To lose his own seat would be a signal humiliation for any prime minister. So Howard had decided to retire. He wanted to canvass scenarios for doing so. He wanted to talk about the details of timing and succession. And perception management.

The polls had been flashing an angry red for the Howard Government for over a year. But even from a desperately bad start, the Newspoll in The Australian that morning showed a breathtaking deterioration of support. A fortnight earlier, the same polling firm had given the Government just 45 per cent of the two-party preferred vote to Labor’s 55. But now the Government’s support had apparently shrunk to a shocking 41 per cent against Labor’s 59.

Opinion polls do not pretend to be predictors. They are instant snapshots of sentiment, not crystal balls. Even if most polls were, this one would not have been a plausible indicator of the election result. There were two reasons for this. First, in the history of the modern two-party system, which took shape in 1949, no party had ever won more than 56.9 per cent of the two-party preferred vote—a record set in 1966. Further, this latest Newspoll result was well out of line with the findings of the other three major polling companies.

Yet politicians, despite all their protestations to the contrary, live and die by the polls. Most receive them with the gravity of a judicial ruling. Especially in the run-up to an election, Howard’s moods from day to day depended on the opinion polls. Although he successfully concealed it from public view, Howard suffered intense mood swings. He frequently vented his frustrations on senior staff, yelling and shouting. The greatest single cause of Howard anger, according to several of those who worked intimately with him, was poor polling. The polls ruled Howard’s emotions.

The oscillations of the Prime Minister’s moods were so punishing on those around him that they had persuaded Arthur Sinodinos to leave Howard’s employ the year before, after more than a decade as his most important aide. Sinodinos, the man some had called the real Deputy Prime Minister, later explained why he decided to make the 2004 election his last in the service of John Howard: ‘During a campaign, we would track seats overnight,’ he said. ‘We tracked about sixteen a night in the 2004 campaign. What would happen normally is you’d get these big deviations, and the PM’s mood reflected the deviations. So one day he’s up; the next day he’s down. So, behind the scenes it was a bit of a rollercoaster . . . This is just a personal thing, but I just felt: look, we’ve done four of these, and it’s all been very good and we’ve all had a great time but, emotionally, I didn’t think I could go through another campaign.’ Sinodinos told the other members of the Prime Minister’s staff of his decision on election night 2004, and acted on it in December 2006. Howard’s most valuable adviser left him just as his most dangerous adversary, Kevin Rudd, arrived as Labor leader.

On that Tuesday morning, 4 September 2007, Howard was deeply depressed. He no longer had Sinodinos to counsel him. An Australian prime minister has a private office with some thirty staff; now that he was in a funk, Howard consulted two of them about the prospects. He spoke to Sinodinos’s replacement as chief of staff, Tony Nutt (formerly the Liberal Party’s director in South Australia), and to Aileen Wiessner, his longest-serving staff member, who normally provided a communication channel to Liberal Party backbenchers. Howard later summed up their responses to him in three words: ‘I said, How are we going? And they said, Not good, boss.’

Now Howard turned to Downer. But when the Foreign Minister arrived, he found that the Prime Minister’s mind was made up. As Howard put it after the election, ‘I was quite pessimistic. Yeah, I was.’ How did he decide to bring Downer in at this juncture? ‘Downer and I had talked very frankly about our position all through the year, because I communicated more directly with him than probably anybody else. But Alexander, until this period, remained very upbeat—he kept saying, I am very confident it’s going to turn. But after this poll, we had this meeting, and he was quite pessimistic: Oh, I was speaking to people at the weekend, and there seems to have been a shift, and it was all very glum in Melbourne. This was the sort of conversation we had. And I said: Well, you know, I am quite pessimistic, and I think I am going to be struggling to hold my own seat.’

If Bennelong was lost, so was the election.

As Downer remembered the meeting: ‘We were talking about whether he should stand down at the end of APEC. Stephen Harper, the Canadian Prime Minister, was visiting Parliament the next Monday. The question was whether [Howard] should stand down on the Tuesday or the Wednesday—that was the basis for the conversation.’

Australia’s second-longest-serving prime minister thought he would be gone in a week, eight days at the most. Prime Minister Peter Costello would lead the Government to the election.

·  ·  ·

The Prime Minister now embarked on an exquisite piece of role playing. At the very time when he was seeking to negotiate his way out of power, he was hosting a meeting that had brought to Sydney the greatest concentration of power ever seen in Australia. As he crafted a despairing exit from leadership, he was acting the part of a triumphant world leader. While he prepared to surrender all ambition for himself, he played a pantomime of being hugely ambitious for his country and the greater Asia–Pacific.

Political leaders everywhere are accomplished at operating in parallel universes, with their public performances often at odds with their private machinations. In his classic exposition of the precepts of statecraft, the 16th century Florentine diplomat and political adviser Niccolo Machiavelli wrote: ‘For a long time I have not said what I believed, nor do I ever believe what I say, and if indeed sometimes I do happen to tell the truth, I hide it among so many lies that it is hard to find.’

Yet, even by the standards of political duality, John Howard in September 2007 set out on a breathtakingly grand example of subterfuge. Posing as the man leading the powers of the Asia–Pacific to a vibrant future, he secretly set out to arrange his retirement. Alexander Downer, reading from his own diary of that week, recounted how he and Howard worked furtively on the Prime Minister’s retirement plan in spare moments snatched from APEC’s grand summitry: ‘On the Wednesday we had a signing ceremony with George Bush, and Howard and I had a chat about it [Howard’s resignation] after the meeting with Bush. On Thursday, after the signing ceremony with Hu Jintao, and before the lunch with him, we spoke again.’ At that lunch, Rudd had stolen the show by speaking Mandarin to the Chinese President. ‘We decided,’ continued Downer, ‘that I should consult the Cabinet colleagues that night.’

Most of the ministers in Howard’s Cabinet would be at the APEC business summit in Sydney that night. Downer would take the opportunity to gather them together in secret to ask their views about Howard’s leadership.

Although it was presented to them as a consultation, in reality the meeting was conceived as a device to begin Howard’s departure. Howard could not appear simply to lose heart and walk away, despondent, and leave his party in an impossible position. He needed a specific catalyst he could cite. He needed a justification. Or, as he explained after the election, he wanted the option of an exit: ‘My position essentially was that there was no way that I was going to unilaterally go. Because by then my departing would not have made any difference to the outcome. And it would just be seen as an act of cowardice. People would have said, John Howard thinks he’s going to lose. He can’t bear to be defeated, so he’s running away at the last minute and he’s going to give poor old Peter [Costello] the hospital pass and, gee, that’s a rotten thing to do. But, on the other hand, a lot of the colleagues, if they felt especially strongly and if they were willing to own a request for me to go—and the public would know that I was being asked to go—then I’d have gone. I’d have gone without any fuss. I mean, it gave me an exit.’

With the conditions he attached, he was seeking more than an exit. He wanted a blameless one. By asking his ministers to take responsibility for removing him, he was also asking them to take responsibility for the length of his tenure to date. Howard had been Prime Minister for four thousand days—four thousand opportunities to choose the date of his own retirement. Now his Cabinet was being asked to take responsibility for his failure to take up any of them. In the likely event that the Government should lose, Howard wanted his ministers not only to carry the full burden of blame but to grant him immunity from being called a coward.

Now, at Howard’s suggestion, Downer was to canvass opinion among the members of Howard’s own Cabinet. The Prime Minister was asking the Cabinet—the national executive which he himself had appointed—to decide whether he should remain in the prime ministership.

Downer had already taken the precaution of phoning Peter Costello on Wednesday. Before dispatching the king, he wanted to be certain that the crown prince was available. Costello had publicly coveted the prime ministership for almost as long as Howard had been in it. In 1999, he’d said he had only ‘another budget or two in me’. Still, it was five minutes to midnight and the black maw of political oblivion was frighteningly near. Downer needed to know whether Costello was prepared to lead the Coalition in this moment of despair.

As Costello recalled, Downer ‘said he couldn’t be sure, but he thought Howard might stand down, that Howard had told him he couldn’t win the election and he couldn’t win Bennelong’. The Foreign Minister said something like, ‘He’s thinking of going—I can’t be sure, but I think he will. Are you prepared to be leader if he stands down?’

Costello’s reply: ‘Yes. It’s a hard ask, and it’s very late in the day, but yes.’

He later ruminated: ‘Downer sounded as if he was going to do it. Part of me said, We’ll believe it when we see it. Another part of me thought, Better get ready. I was absolutely determined to do it. Downer said he would be off in the next forty-eight hours.’

The Treasurer started making preparations to assume the prime ministership at short notice, to lead a Government that, according to every available indication, had come to the end of its life. It would demand an epic effort. ‘I began preparing a reshuffle, policies, speeches. I think I spoke to the federal director [of the Liberal Party, Brian Loughnane]. He was out of the loop, he didn’t know what was going on. I spoke to my staff and my colleagues. This was very much on, and the reason I thought it was on was that Howard went to Downer. You don’t go to Downer and say, Find out if they want me to go. Otherwise, why would you do that if you weren’t going to go? And you must know this would become public. If your intention was to fight on, it would be highly damaging for this to become known . . . This had moved, it had got a huge head of steam, and the reason Downer was not concerned about leaking was that he thought it was going to happen.’

As Howard and Downer were seeking to build their political ejector seat for the Prime Minister, Tony Abbott happened to stumble upon them. On the day Downer phoned Costello, Health Minister Abbott was at a lunch organised by the Forestville branch of the Liberal Party in his seat of Warringah, in northern Sydney. The guest speaker was Janet Albrechtsen, a conservative partisan who had used her column in the Sydney Morning Herald and more recently The Australian to barrack tirelessly for Howard. The admiration seemed to be mutual. Howard had appointed her to the board of the Australian Broadcasting Corp. But, dispirited by the same Newspoll result that had crushed Howard, Albrechtsen had come to the same conclusion as her hero.

‘I sat next to her and she said she was thinking of urging Howard to retire,’ Abbott recalled. He tried to dissuade her. ‘Sure,’ he said. ‘We are in a difficult position, but why would you dump an incumbent for an inferior choice?’ But Albrechtsen was adamant. ‘Neither of us could convince the other.’

At the end of the event, Albrechtsen told Abbott that she wanted to do Howard the courtesy of telling him she would express this view in her next column. He offered to pass on the message, and phoned the PM later that afternoon: ‘I’m sorry to bother you, but I think I should tell you about a conversation I had with Albrechtsen.’

Abbott was surprised to find that the