Peacock asked me and the other members of the leadership group, Fred Chaney and Peter Durack, to his office. He told us that he was in an impossible position and that he would resign. He then returned to the party meeting, informed those present of his decision, to cries of ‘No, don’t', and some of ‘Grow up', and called immediately for nominations to fill the vacancy in the leadership of the party. The only other person to nominate was Jim Carlton, and I defeated him by 59 votes to six. There were seven informal votes. After several ballots, Neil Brown from Victoria was elected as deputy leader.
The outcome was nothing short of extraordinary. It was a case of a party changing its leader by accident, not by deliberation. Whilst I was naturally happy, indeed exhilarated, to have the leadership, I had not been campaigning for it. True it was that I was ready to parade my policy credentials and to argue publicly for the things in which I believed, but I had not been organising a challenge, and would not have challenged Andrew Peacock in the circumstances then prevailing within the parliamentary party. If Andrew had not lost his nerve and sought to remove me as deputy leader, I am sure that he would have continued as leader until the subsequent election.
The sudden change in leadership was greeted with much enthusiasm within the party and in many sections of the community. There was widespread press endorsement of me, largely on the grounds that I had been prominent in arguing policy substance. Andrew Peacock gave a gracious and light-hearted press conference in which he rather humorously said that he didn’t know if he had ever wanted to be prime minister. The immediate reaction was one of surging public support for the Coalition and me.
My honeymoon was very short-lived, however. Starting with the leaking of a shadow cabinet strategy paper prepared by Tony Messner, my newly appointed Finance spokesman, the Coalition leaked like a sieve, until a temporary cessation for the 1987 election. The parliamentary party entered a difficult and divisive phase.
The poll resurgence did not last long, and some tactical mistakes of mine did not help. For example, I maintained the rather rigid policy position that there should be an immediate deregulation of housing interest rates. This was economically sensible but politically very dangerous. It presented the Labor Party in the South Australian state election held on 7 December 1985 with a real gift. Although the Liberal Party opposition distanced itself from the federal policy, it was easy for Labor to make the link. I should have anticipated this and embraced a gradual approach on deregulation of housing interest rates — which I was to advocate early in 1986 and which was copied by the Hawke Government several months later.
Although there were flaws in my leadership style, the larger problem was that I was being targeted from within through a torrent of leaks which undermined my authority, almost on a daily basis. The Coalition ended the year in a very weak political position. The early excitement about my securing the leadership had turned to a sense of puzzlement and drift. The great momentum of September 1985 had dissipated.
For much of 1986 the party struggled. My poll ratings against Hawke were dismal, and until the latter part of the year the Coalition itself was well behind the Labor Party. Polls became the nightmare of my existence, as is inevitably the fate of any Opposition leader who does not keep himself and his party reasonably competitive with the Government and the Prime Minister. Not only did I rate poorly against Hawke but, as time went by, popularity polls were conducted between me and Peacock; predictably, Andrew Peacock began to move ahead on these measurements.
One particularly damaging poll, conducted by the Quantum research group, commissioned from Western Australia, was leaked extensively to the Australian Financial Review, which gave it extraordinarily heavy coverage, way beyond what could have been justified by ordinary reporting principles. This included extensive reporting on the morning of a nationally televised address by me. This poll was paid for by a group angry over my anti-tax avoidance action as Treasurer.
The party was in a real bind. By accident it had changed its leader and a substantial section of the party remained profoundly unhappy about this. For some of them, the honourable thing was to grin and bear it and do their best to be an effective opposition. For a much smaller group, the answer was to embark on regular bouts of destructive destabilisation, which of course had a disastrous impact on my leadership authority and badly damaged the opposition.
Despite the instability and leadership problems, I was determined to push ahead on the policy front. Thus the Coalition’s new and quite radical industrial relations policy was released by Neil Brown on 11 May 1986. For the first time it provided for individual contracts and made very significant changes to the old centralised wage-fixing system. Getting the policy out and winning wide acceptance for it was quite an achievement given the turmoil within the Coalition parties.
In the first half of 1986, Paul Keating made his widely reported comment on the John Laws radio program that if Australia did not rectify its terms-of-trade problem, it would end up a ‘banana republic', which I thought at the time was no more than a throwaway line, not the considered warning to the public it was later claimed to be. The terms-of-trade challenge led to an address to the nation from the Prime Minister, with a response from me, in which I laid out an alternative approach. Despite the fog of leadership speculation, my response won considerable praise from the commentariat.
The Liberal Party held a most successful federal council in Adelaide, in September of that year. Its conclusion coincided with the publication of a Morgan Poll which showed the Coalition ahead of Labor by six points. For a leader who had been under siege from the opinion polls for close to nine months, this was a welcome relief. Generally favourable publicity coming out of the meeting boosted the spirits of the Coalition as the year moved on.
Notwithstanding our internal problems, the Coalition had had some notable parliamentary successes. It severely embarrassed Paul Keating over his failure to lodge an income tax return for the previous year. This hurt Keating a lot with ordinary voters. When the document suggesting that Keating had not filed his return came into my hands, I found it hard to believe. So I asked Jim Carlton, the shadow Treasurer, to call on Keating, confront him with what we had and indicate that if the information were bogus then the matter would not be further pursued. It was clear from Keating’s reaction that the information was spot-on. I am glad that I had taken the precaution of checking. That precaution did not for a moment dilute the intense public embarrassment Keating suffered.
Incredibly, Wilson Tuckey, who was a loud barracker for Peacock, criticised me for such caution, and that criticism found its way into the papers.
The ongoing controversy regarding the position of Lionel Murphy on the High Court also provided the opposition with the chance to wrong-foot the Government for an entire week in the parliament. Although spasmodic, these events continued to give Coalition members hope and to remind all of us that we had a real show of getting on top of the Government, if only our own difficulties could be put behind us. That remained our principal challenge.
On 2 June 1987 I arrived back at our home in Wollstonecraft close to 8.30 in the evening. Janette met me at the door and said, ‘They’re in the lounge room'. She was referring to the delegation from the Queensland National Party. This was the end of a quite remarkable day in the distracting saga of the ‘Joh for PM’ campaign, which did such immense damage to our prospects of winning the 1987 election. The delegation had come to signal an unapologetic surrender in a campaign which had engulfed and enfeebled the federal coalition for close to a year.
The events of the early days of June 1987 may have ended the ‘Joh for PM’ push, but its ramifications would haunt the Liberal and National parties for some years into the future.
How did it all come about in the first place? As the Coalition in Canberra, and the Liberal Party in particular, struggled through the early part of 1986, there were murmurs out of Queensland that Joh Bjelke-Petersen, that state’s long-serving Premier, might take a tilt at Canberra.
Disunity