When The Rot Set In


By the end of 2005, not 14 months after his most emphatic election victory, all the major elements of John Howard’s defeat were in place. The Prime Minister himself was still relatively popular, but he had mixed the chemicals that were soon to corrode his approval rating and his electoral base.

As the drought took hold and awareness of global warming grew, community alarm over climate change would become more strident. As Work Choices was introduced and some employers took advantage of the laws to exploit staff, the reality of Howard’s reforms would start to confirm the fears the unions had stoked. And the Prime Minister would increasingly be viewed as a relic who could not be trusted to deal with the emerging problems. But in late 2005 there still seemed to be plenty of time and opportunity for the government to address each of these concerns.

Already Labor’s support in the opinion polls was improving. After March 2006, the Opposition stayed consistently ahead of the government on a two-party preferred basis — the way election results are measured — according to the Nielsen poll published by the Sydney Morning Herald and The Age. According to Newspoll, published by The Australian, this happened five months later — in August — but it happened nonetheless.

Labor’s national secretary, Tim Gartrell, however, did not read this as a harbinger of success. Labor had been ahead of the Coalition midway through every one of Howard’s terms, yet the PM had subsequently recovered to seize victory on election day. "You cannot take it for granted, you have to fight like alley cats right to the end, because Howard had this great capacity to blindside us," said Gartrell. Now Labor braced for Howard to take dramatic action.

The single most dramatic action he could have taken was to retire and allow the recasting of the entire government. "We wondered if he was going to hand over to Costello," Gartrell related after the 2007 election. "We thought that may be enough. He comes along and just changes everything. That’s what you’re looking for in politics, the big exciting shift that changes the formula. We thought he might. And reading all the stuff in the media, we started to imagine that they might be getting close already."

Labor was determined not to be blindsided if this should happen. According to Gartrell, it set up an alternative strategy, the Costello Transition Project. In the event that Howard retired, this group would have a detailed plan ready for an election campaign against Prime Minister Peter Costello. Around May 2006, two senior Labor staffers were assigned to start work on this. One was Jim Chalmers, deputy chief of staff to Labor leader Beazley. The other was Nick Martin, the director of research for the ALP national secretariat. They were assisted by George Svigos, a media aide to Beazley.

The starting point was to imagine the day of the handover from Howard to Costello and write a press release in response to the new prime minister’s advent. Chalmers and Martin drafted the statement as a way of focusing their thoughts on how they would characterise Costello. They examined the available research on Costello’s image and his history and considered how they wanted him to be viewed in a Beazley-Costello contest in 2007. Chalmers carried this draft press release with him for a couple of weeks, polishing it during spare moments in airport lounges or when an idea struck.

Chalmers said later that the campaign against Costello would have been a starkly negative one: "Punters didn’t trust him, said he was a snake in the grass, and considered him arrogant — and there’s no question that all that would have been capitalised on with a well researched and disciplined attack right from the outset, with not a second wasted." Labor would have emphasised the accusation that Costello was even more of a hardliner on industrial relations than Howard. The speculation about a Costello succession was lively enough that a Liberal MP and former Howard minister, Jackie Kelly, said publicly that she would resign from Parliament if Costello were made leader.

Chalmers rated the chance that Howard would hand over to Costello by the end of the year at about 60 per cent. There was an awful predicament here for Kim Beazley. Labor had pulled ahead of the government in the polls, yet his personal ratings were in a slump. The party was thriving; its leader was not.

A number of factors were combining to undermine the Howard government’s support. The Reserve Bank was raising official interest rates. Howard had campaigned in 2004 on a slogan of "Keeping interest rates low", and many voters — around a quarter, according to a Nielsen poll — had believed him. It had been an important factor in his victory. But the Reserve Bank was among those who didn’t take Howard’s slogan seriously. Between the 2004 election and the end of 2006, it raised the official rate four times, increasing the burden on the average mortgage holder by around 14 per cent.

The occupation of Iraq provided a continuing backdrop of bad news and a constant reminder of Howard’s misadventure with George W Bush. The news in April included word of the first Australian soldier to die in Iraq, Jake Kovco, who died when his pistol accidentally fired in his quarters in Baghdad. The case of David Hicks was increasingly on the public conscience as he approached his fifth year in detention without trial in the US enemy-combatant prison in Guantánamo Bay, Cuba.

Howard faced an uprising on his own backbench over the treatment of people seeking political asylum in Australia. At the Prime Minister’s direction, Foreign Minister Alexander Downer had invented the so-called Pacific Solution, paying the government of Nauru to hold the "boat people" so they would not set foot on Australian soil until their cases were heard, if ever. A group of Liberal backbenchers, in a rare outburst of dissent, noisily refused to accept the government’s decision.

On top of this, as the drought tightened its grip, Howard’s apparent indifference to climate change looked increasingly outdated. An inquiry into the Saddam Hussein Oil-for-Food program bribery scandal at the Australian Wheat Board (AWB) summoned Howard, Downer and the Deputy Prime Minister and Minister for Trade, Mark Vaile, to give evidence. Petrol prices were rising. And then there was Work Choices.

Yet as bad as things looked for Howard, they never looked good for Beazley. It was a special kind of purgatory. In April 2006, for example, while the Nielsen poll put Labor ahead with 51 per cent of the two-party preferred vote to the government’s 49 per cent, Howard’s personal approval rating was a respectable 49 per cent while Beazley’s was a dismal 30 per cent. The only bigger loser than the Howard government was the leadership of Kim Beazley.

The Labor leader tried to keep it out of his mind: "I didn’t worry about it — I kept my eye on the two-party preferred vote," he recalled in 2008. And he comforted himself with the thought that Howard had sealed his fate: "From March 2006, the Libs had basically lost the election. It didn’t really matter what I did, or what John Howard did."

Some important Labor figures did not share Beazley’s optimism. Some, especially in the New South Wales Right and the Victorian Left, worried that, while the party had moved to a potentially winning position, its leader might be holding it back. Beazley was aware that the secretary of Unions NSW, John "Robbo" Robertson, was agitating against his leadership: "Robbo was not very supportive of me — he was supporting Kevin."

Rudd’s star was in the ascendant. As Labor’s foreign affairs spokesman, he had publicly prosecuted the Opposition’s case against the Government on the AWB corruption case. He had done an impressive job. He had already established himself as a credible figure with sober, powerful critiques of the government on a range of issues including the Iraq occupation and the Afghanistan deployment. And the more human aspect of Kevin Rudd was on display in his regular appearance on the flummery-soft Sunrise TV show, where he had shared the stage with the Liberals’ Joe Hockey since 2002.

Hockey would tease Rudd about his lack of popularity as the pair breakfasted every Friday on the occasion of their shared Sunrise appearance. Hockey later said: "Go and dig out all the old polls, when they used to do those polls on the Labor Party and who would you like to lead Labor. They’d have Beazley, Crean, you know, Rudd and Other. And Other would out-poll Kevin Rudd. I remember those, ’cause I’d be sitting with him at breakfast and I’d say, it’d be better for me to be sitting with Other, than sitting with you cause Other’s more popular!"

But no longer. As early as January 2005, when Mark Latham quit as Labor’s leader and the party prepared to elect a new one, the opinion polls established a clear hierarchy of popular preference. The Nielsen poll asked voters who would be the best person to lead Labor. Kim Beazley rated 38 per cent; Rudd, 23 per cent; Julia Gillard, 17 per cent. The other contenders had negligible support: only 1 or 2 per cent. A Newspoll arrived at the same ranking and with very similar numbers: Beazley first on 41 per cent, Rudd next on 24 per cent, and Gillard third on 18. Rudd was positioned as the heir to Beazley by popular acclaim.

All through 2005, Rudd performed deftly as a politician and reinforced his claim to the leadership. In that year, he managed to advance new policy so successfully that the Howard government three times felt obliged to change its public position and adopt his policy proposals on important issues. It reluctantly embraced his suggestions to send troops back to Afghanistan to prevent it becoming a failed state, to get Australia a seat at the forthcoming East Asia summit by signing the Treaty of Amity and Cooperation, and to organise a regional strategy for preventing an avian flu pandemic. Rudd, in short, had been making Australian foreign policy from the Opposition benches. He was keeping his opposite number, the foreign affairs minister Alexander Downer, on the defensive.

The AWB bribery scandal became an opportunity to pursue Howard, Mark Vaile and Downer not just on policy but personally. Rudd relished the opportunity. He later recounted a story that helps explain why he took a personal dislike to Downer: "My mum came down to Parliament in 2001. She was already suffering from Parkinson’s disease, and this was about three years before she died. She was there for my swearing-in as Shadow Foreign Minister. So we were there — all the family are around and we were having a cup of tea. It was some sort of reception in Parliament House, and Mum was there. I had always had a fairly benign view of Downer, you know, but he came over to Mum, who was 80 years old at the time, and his first observation to her was: Of course, when I was your son’s age, I had already been leader of my party and had become Foreign Minister. It was just a big put-down." As the smirking Downer walked off, Rudd recalled, his mother stared at his retreating back and said, "What a rude man — an exceptionally rude man." He said, "Mum was stunned, just stunned." Rudd was, in his own words, "a very determined bastard". Downer helped make him more so.

All this time, Rudd had been building his profile in the media. He was what’s known in the business as a "media tart". He was always available for interviews. He would even phone reporters to suggest them. He was, as then NSW Premier Bob Carr put it at the time, "forcing himself into the public consciousness". He was, in Carr’s view, "making himself into an inevitability".


This is an edited extract from To The Bitter End: The dramatic story behind the fall of John Howard and the rise of Kevin Rudd by Peter Hartcher (Allen & Unwin: 2009).

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