Oz Politics Blog

Yesterday Hawke was arguing that the punters should not be distracted by Howard’s use of the term ‘deal’. Costello was talking about an ‘undertaking’. When someone gives an undertaking, you (by definition) don’t have a deal. Deals are negotiated; undertakings are given. But for the life of me, I cannot see how an undertaking begins with the words, “I can’t guarantee this to you Peter …”

Howard’s 5 December 1994 ‘undertaking’ was allegedly given to secure him the party leadership unopposed. However, that meeting was not the conclusion of the discussions between Howard and Costello. In the subsequent meeting, Costello reserved his right to challenge Howard for the Liberal leadership. If there was an undertaking on 5 December 1994 to secure an unopposed leadership ballot, was it still on the table when Costello subsequently said that he reserved the right to challenge?

While there was no deal or undertaking, Costello was clearly left with a reasonable expectation of a short-lived Howard government. Now, at least, we know why Howard has never said that he is here for the long haul. Howard has been stringing Costello along on the promise that maybe tomorrow it will all be his. And for almost 12 years, Costello has been buying the dream.

So much for 12 year old history. Yesterday’s compromise was a clever one. It was the last outcome the Labor Party would have wanted, as it is the best chance for a fifth term Coalition government. It will be interesting to see whether it is a sustainable compromise.

Yesterday’s compromise also gave an insight to the Liberal Party dynamics. Costello clearly does not have the numbers in the Cabinet, let alone the party room to mount a challenge. Howard has chosen to keep Costello in the tent and, in doing so, effectively neutered him. By staying in the tent, Costello has effectively acquiesced to Howard’s leadership.

I am inclined to agree with the Telegraph, Costello has damaged both his short- and long-term chances at the top job. In calling Howard a liar, he has called himself a liar, as he had previously denied any deal. By not resigning, Costello has shown that Howard has the strength of numbers for the medium term. Costello’s bark was worse than his bite.

And, all this raises questions about Costello’s judgement. Why did Costello give oxygen to a leadership transition story if he didn’t have the numbers to back himself in the medium term (Keating’s second shot in the locker strategy after 6 months on the back bench)?

One argument is that Costello simply wanted to correct the historical record and put pressure on Howard to retire this year. It was probably a bit late to do the former, and the subtext from Howard yesterday was more about staying than going. Another explanation is that of Howard’s naming: hubris and arrogance. Unfortunately for Costello, history is usually written by the winners.

In the medium term I think we can expect someone to challenge Costello’s status as heir apparent. Abbott, Nelsen and Downer are often named in this scenario, but there are a number of young Turks who cannot be dismissed.

Update 14 July 2006: Dennis Shanahan captured Costello’s problem in today’s Australian under the rubric ‘Costello fumbling his way out of the race’. Some excerpts follow.

PETER Costello’s campaign to replace John Howard and become prime minister is hopelessly flawed. If Costello is to ever succeed, he has to completely overhaul his approach.

The Treasurer’s ambitions have been thwarted in the large part because of Howard’s success and determination to stay in the job as long as possible, but also by his own lack of cohesive political strategy to become prime minister.

This is apparent to everyone in parliament. Costello’s friends and foes are scratching their heads as his campaign lurches to life, threatens mayhem and then folds with little gain, or even goes backwards. Time and again putative challenges and dire threats of partyroom bloodbaths recede, leaving Costello worse off than when he began.

…

Costello’s behaviour, and the divisions within his supporters between the “waiters” and the “wreckers”, suggests he can’t decide if he’s a Holt or a Keating. The two courses are mutually exclusive yet they appear to be simultaneously pursued by the Treasurer and his supporters, with dire consequences.

…

In short, he [Costello] has an insufficient base from which to launch a challenge and gain a credible, even if losing, result. This underscores the dangers of having maverick or wild-card supporters who try to prod or force Costello into confrontations with Howard through media leaks.

This goes hand in glove with the Costello camp’s failure to put a clear case as to why Costello would be better and more likely to gain victory at the next election than Howard. Epithets about being a lying rodent may detract from Howard’s standing but they don’t build Costello’s: that’s the danger of a negative, wrecking approach. Howard’s public standing is also much higher than Hawke’s was when Keating launched his assault.

Update 20 July 2006: The Australian reported on Milne v Akerman, the story behind the story.

It’s time to go …

It looks like someone will get evicted from the Big Brother house on the hill. The difficult question is, who will it be?

If Howard has lied about the existence of a deal, then he will be on the couch with Gretel. However, according to the third person in the room, McLachlan, the conversation between Howard and Costello on 5 December 1994, started something like, “I can’t guarantee this to you Peter, but my intention is not to hang around forever…”

Interestingly, these words were absent from Costello’s recollection.

“Well, there’s been a lot in the papers the last couple of days and I’ve never spoken about these events before, but since others have, the public is entitled to know the full truth.

“What happened was that Mr McLachlan and Mr Howard sought a meeting with me.

“The meeting took place on the 5th of December 1994. There were only three of us there.

“Mr Howard asked me not to nominate for the Liberal Party leadership because he did not want a vote in the party room.

“He told me that he intended to do one-and-a-half terms as prime minster and then would hand over.

“I did not seek that undertaking. He volunteered it and I took him at his word.

“Obviously that did not happen. I didn’t stand on my digs.

“I continue to work for the Government to the best of my ability in the interests of the Australian public.

“And whilst this country can be improved and whilst there are still things to be done to make it better, I intend to give it every ounce of energy that I have.

“I did not ask Mr McLachlan to relate these matters, but his account is entirely accurate.”

My assessment is that Costello has allowed hubris to get the better of him. If the conversation began as McLachlan reported, then there was no deal or undertaking. At best, it was the musings of a politician wanting to sell you something. It was Howard at his wiliest. Howard said one thing, albeit carefully crafted, and Costello heard another. And it looks like it has been feeding Costello’s inner hopes and aspirations ever since.

The tragedy for Costello is that by claiming an undertaking he has brought on the eviction. Now that might not be a bad thing if the party room numbers are on your side. Party room numbers always trump rusty recollections. However, it appears that Costello has forced the issue without either the party room numbers, or an ironclad story about the deal. And (in this age of workplace reform) when you call the boss a liar, it’s usually the boss who wins.

So I suspect, it’s time to go … Peter.

(Note: the clever observers among you might say that this issue was not brought on by Costello, and that it was all the work of Glenn Milne. However, by casting the exchange as an “undertaking” in today’s press conference, Costello has brought it on. Nonetheless, I’d be interested in whether Milne asked Costello to verify the story before it was published, and what Costello said).

Remember the 1988 Kirribilli pact between Hawke and Keating? Well Costello’s unwillingness to deny a leadership transition deal with Howard has set fresh speculation running. According to the Tiser, a key exchange between Costello and a journalist went as follows.

“Can I just ask you a plain simple question? Is there an understanding between you and Mr Howard as to his departure?” a reporter asked at a press conference in the Solomon Islands.

“Look, these things have worked in the interests of the Australian people and the Liberal Party and the people concerned and there is no point in speculating on it,” Mr Costello said.

The SMH reported this exchange,

Asked if voters had a right to know whether there was a deal, Mr Costello said “voters get the right to vote”.

“They will get the right to vote on who they want to run the country. They will have plenty of information at the time of the election,” he said.

However, the SMH also reported

Mr Howard has emphatically ruled out ever doing such a deal. Yesterday he referred to quotes he had made during an interview in March to celebrate his 10 years in office, when he said Mr Keating and Mr Hawke had no right to make the Kirribilli pact.

“The prime ministership of Australia is not mine to confer on somebody else,” Mr Howard said. “If I decided at some time in the future that I was going to go, then the Liberal Party will decide my successor and not me.

Confirming the Prime Minister’s denial, the Australian referred to Howard’s May 2004 comments: “There are no deals, and that’s been my position all along and it will remain my position.”

My assessment: There is no deal. Costello is using ambiguity to hype his profile and promote the notion of an orderly transfer in the near future. It is a risky strategy. It may backfire, cementing the Prime Minister in position for another election.

Update 8 July 2006: This exchange on last night’s Lateline has stirred the pot without actually adding much clarity.

GRAHAME MORRIS: I don’t know. The Prime Minister said “no deal”. But, look, it’s not hard to work out. I don’t know why journos don’t believe it. But somewhere around November, the Prime Minister will focus on this and then the country and the party and, you know, the PM’s family and Peter Costello, everyone will know somewhere around Christmas time. But why on Earth would the Prime Minister focus on it now when he doesn’t have to? And you can just tell, the minute he starts focusing on, “Am I coming or going?” you will know from his body language. So he’s sort of made the conscious decision - wait until November and then he will have a think about it.

MAXINE MCKEW: What is significant about November? Are you giving us all a hint there?

GRAHAME MORRIS: No, nothing…

MAXINE MCKEW: Oh, come on!

GRAHAME MORRIS: Except that you would announce it - if you were going to announce it, you’d announce it somewhere over that silly season and Christmas and, if he chose to stay, that means there’s nine months to an election to get organised and, if he chooses to go, that’s nine months for the new leader to get organised with his team, and I think that’s plenty of time.

MAXINE MCKEW: You’ve said in the past to us on this program you believe that the Prime Minister still has not made up his mind. Do you still think that’s the case?

GRAHAME MORRIS: Genuinely, that is right. Look, Maxine, you will know it. He’s fairly transparent in his body language and the minute he’s coming or the minute he’s going you will be able to tell, and that’s why I suspect November, December is why he’s decided, “Then I’ll focus on it and I’ll let everyone know.”

Yesterday I reported on the odds at Centrebet and IASBet. Subsequently, I found this statement from Gerard at Centrebet (dated 22 December),

Just when we thought that the Coalition had plenty of in-house turmoil that might affect them at the next election up bobs a punter who fancies them to get back in.

We eased the Coalition out to 1.85 equal favourites with Labor on the back of John Howard’s workplace reforms, and while those reforms have been receiving plenty of criticism, one of our election clients disagrees.

This week he placed $10,000 at 1.85, $20,000 at 1.75, then another $20,000 at 1.65. That’s where the price remains for the moment and it does appear very short odds given what has been going on. Labor meantime has drifted out to 2.10.

Of note, other bookmarkers are not reflecting the movement seen at Centrebet and (to a lesser extent) IASBet.

• SportsBet still has it as even money, paying $1.85 for both a Coalition and Labor win.
• SportingBet is paying $1.80 for a Coalition win and $1.90 for a Labor win.

It was enough to make me wonder whether the movement at Centrebet was a ham-fisted attempt to influence the odds (and consequently public opinion) by (for example) a Coalition support group. Certainly, it was not rational behaviour. All other things being equal, the self-interested punter would not have placed the second and subsequent bets at Centrebet when other bookies have better odds on offer. Strange!

If Coalition supporters are gaming the betting market in order to change public opinion about Howard’s chances next election, it could prove expensive as we approach the next election.

Changing topic, also of note, SportingBet and SportsBet have books on who will lead the Liberal Party at the time of the next Federal election. This morning’s odds were:

Steve Lewis has taken to calling Peter Costello the putative prime minister (examples here and here).

Putative is an interesting term. According to the online Cambridge dictionary, it is an adjective meaning,

generally thought to be or to exist, whether or not this is really true:

The putative leader of the terrorist organization was arrested by police in Birmingham yesterday.

Of course, no one believes Peter Costello is the prime minister (well perhaps other than Peter Costello and Glenn Milne). Nor is putative a synonym for heir apparent or aspirational.

Consequently, I am left wondering. I am not quite sure whether Lewis is using the term sarcastically or incorrectly.