36

The Gillard Government

O brave new world,

That has such people in’t!

William Shakespeare,

The Tempest

In the summer of 2010–11, early in my tenure as Australia’s foreign minister, my sights were fixed firmly on home as Queensland experienced the worst floods we had seen since 1974. I hadn’t seen so much rain since I was a kid on the farm. It bucketed down like there was no tomorrow. By 11 January, things were so bad that I decided I had to get back to Brisbane. It was no longer possible to drive there, so I chartered a light plane. I made it just before the weather really set in. The Brisbane River was rising rapidly. Much of my electorate bordered the river, from Yeronga in the west, through South Brisbane, Hawthorne, Bulimba and Morningside to the east. At times like these it’s essential for any elected representative to be with their community. I knew my electorate well, having doorknocked most of it over the years, and went straight away to the lowest-lying parts in West End. Already the water was rising through the floorboards of a number of homes. Everyone was pitching in to help evacuate residents and as much of their belongings as they could carry. Together with hundreds of volunteers, I worked well into the night as the waters rose above chest level.

The following morning, as the weather began to clear slightly, the sight of a wide, angry, dirty river confronted us all. There was still a lot more work to be done. I remember going from door to door in Gillan Street in Norman Park, only a couple of blocks from our place, to make sure that everyone had evacuated. Near the end of the street, I found a rental house occupied by a bunch of Korean students. These kids didn’t speak a word of English. In fact, they were in Brisbane to learn English. I don’t speak a word of Korean. When I was finally able to make them understand that they had to evacuate, they pleaded with me to let them stay, as they still had homework to do for their class the next day! The Confucian education ethic has a lot to answer for. Using sign language, I managed to communicate to the kids that it was time to go, assuring them that I would personally explain to their teachers why they hadn’t been able to finish their assignments. When they had packed, I noticed that one of the bedrooms was still full of possessions. The others told me one of their compatriots had gone down to the Gold Coast for the weekend. So I threw all of his stuff into a couple of suitcases, and carried them on my head one after the other through waist-deep water and filth to avoid getting their contents wet. Such are the unwritten responsibilities of a local member.

Gillard, unfairly in my view, came in for a torrent of criticism from the national commentariat for her ‘insensitive’, ‘non-empathic’ and ‘wooden’ response to the crisis.1 She was even attacked for her choice of clothes when she visited flood-affected areas. As a person, Gillard did lack empathy; I had noticed its absence many times before. But these attacks were undeserved. Gillard herself was obviously stunned by the criticism. When parliament resumed early the following month, the colleagues gasped when she walked into the chamber on the first sitting day carrying an Australian flag covered in dirt and mud – it had been retrieved by one of the military rescue teams – and made a statement about the floods. She began to weep as she described the tragic death of a young boy in Toowoomba who had sacrificed his life in order to save his younger brother. Was her emotion genuine? Was it confected? How do we know the state of any person’s soul? I certainly don’t.

Once the parliamentary debate turned from the emotion of these events, we then found ourselves facing the practical question of who would pay for the nearly $3.5 billion clean-up cost for flood-affected areas.2 Gillard did not bother consulting the cabinet. She announced, presumably after talking the matter over with treasurer Wayne Swan, that there would be a flood levy imposed nationwide. I would have been crucified for making such a decision without consulting cabinet. Nonetheless, it was the right decision to take in the circumstances. (Gillard would later be attacked, again unfairly, by NSW premier Kristina Keneally for imposing the burden of the levy on those living south of the Tweed.3 For me this said everything about Keneally’s sense of national responsibility: zero.)

Unfair or not, the negative attacks on Gillard came as no surprise. By the end of 2010, the political climate for the Gillard government had begun to darken. In late November, John Brumby’s Victorian Labor government fell to Ted Baillieu’s Liberal Party after just one term. There had been a 6 per cent swing against Labor on the two-party-preferred vote and a 6.8 per cent primary vote swing.4 By any standard, these were big swings. Victoria was Gillard’s home state. She had served as Brumby’s chief of staff and she had campaigned extensively with him during the Victorian poll. Gillard may not have hindered the Victorian vote, but based on her federal polling numbers at the time, she had not helped it either. By the time parliament resumed in February, our polling predicament had deteriorated rapidly. The government would only be ahead in one of the next twenty-five polls, and then by just one percentage point.5 The average polling deficit was 47–53 per cent in favour of the Coalition.6

The government’s polling numbers were not helped by Gillard’s decision in February 2011 to essentially defund the National Health and Hospitals Network I had painstakingly negotiated during the COAG meeting the previous April. By this stage Swan was desperate to pull back revenue from what we had put on the table for health and hospitals, no doubt mindful of his budget commitment the previous year that he would bring the government ‘back into surplus, in three years’ time, and three years ahead of time’, and aware of the further hit on the revenues that would come from the government’s capitulation on the mining tax. This was one of the greatest acts of policy sabotage by a Labor prime minister against a fundamental Labor reform. It made me feel sick to the stomach. Gillard’s justification for gutting the government’s health and hospitals reform was classic, along the lines of: ‘I inherited from Kevin health agreements that were not going to last.’ This begs so many questions. If it was such a bad deal, why had she and Swan fully supported it the previous April when we took it through cabinet? And what was the new public policy reason for her assertion that it was ‘not going to last’? Gillard did not offer one. Though I felt shattered by the wilful destruction of a once-in-a-generation chance to reform Australia’s health and hospital system for the next generation, I bit my lip and said nothing.

The destruction of the National Health and Hospitals Network was followed by the rolling political debacle that became the carbon tax disaster. On 24 February 2011, less than two weeks after the NHHN had been dispatched to the bottom of the ocean, Gillard announced the introduction of a carbon tax which would become effective as of 1 July 2012.7 It was to remain in force for ‘three to five years’, by which time it would transition into an emissions trading scheme. Gillard’s carbon tax, like the CPRS, was also based on an initial target of reducing Australian greenhouse gas emissions by 5 per cent by 2020.8 The difference, however, was that whereas the CPRS would have met this target unconditionally by setting a carbon cap and issuing carbon emitters with permits within that cap, the carbon tax was a much cruder instrument. It would only be through a process of trial and error that the government would know whether the carbon tax was having the desired effect in bringing emissions down by the amount speci­fied in the target. More importantly, the carbon tax was much narrower in scope than the CPRS. Gillard explicitly excluded transport fuels, presumably after having been lobbied by the Transport Workers’ Union, a core part of the NSW right faction which had supported her rise to power. Whereas the CPRS covered a total of 1000 major emitters across the country, the carbon tax included only 400 companies.9 By 2013 this had been reduced to 260 ‘entities’ of which, by the first year of its full operation, only 180 were liable for paying for carbon units.10 In other words, the carbon tax was a much weaker regime for reducing carbon tax emissions than the CPRS. Even when the tax eventually transitioned into an emissions trading scheme after three to five years, this ETS would continue to apply to a smaller section of the overall economy than the original CPRS plan.

The announcement of the carbon tax of 24 February marked the effective political death of the Gillard government. Although Gillard had outlined the fact that the scheme would eventually translate into a floating carbon price, from the get-go she was forced to admit it was ‘effectively a tax’.11 From this point on, her political fate was sealed given her declaration just prior to the 2010 election that ‘there will be no carbon tax under a government I lead’.12 In the eyes of the Australian voting public, she betrayed their trust. It was at this point that Abbott branded Gillard as ‘Juliar’.13 The name stuck. The complex debate on the method by which to put a price on carbon had been radically simplified into a straightforward question of character: Gillard was a liar and therefore could not be trusted on anything, not just climate change. In politics, questions of character are fundamental. If a political leader is proved to be untrustworthy on a core commitment, it casts a shadow over everything else that political leader seeks to do. Gillard found herself precisely in this predicament. She would go on to admit in her book that her decision on the carbon tax was ‘the worst political mistake I have ever made, and I paid for it dearly’.14

Gillard’s decision on the carbon tax was wrong on so many levels. Not only was it hypocritical when contrasted with her solemn pre-­election commitment to the public; it was hypocritical when compared to her hostility to carbon pricing in any form in the internal cabinet debate on this subject in April 2010. She had campaigned long and hard within the government during the first half of 2010 on the grounds she feared the political impact of Abbott’s attack on the CPRS as a tax by any other name. It was also a core part of her campaign against my continuing as prime minister – namely, my ‘inability’ to manage the politics of carbon pricing. But Gillard had not only lost on the politics of the carbon tax decision because of her hypocrisy. She had also lost on the policy, because she had decided on a much weaker scheme than the CPRS. She had paid an enormous political price for breaking her word on carbon pricing, and what she got in return was a climate change regime much weaker than the one she had originally opposed.

There was another problem with the decision too. It had to do with the optics of its announcement. For reasons which escape all form of political logic, Gillard announced the carbon tax while standing in the prime minister’s courtyard, flanked by Bob Brown, the leader of the Australian Greens, and his climate change spokesperson, Christine Milne.15 Abbott had been desperate to portray the Gillard government as being a coalition with the Greens, and now he had proof positive. It was a potent political image which would be used against the government time and time again.

Finally, there was the unbelievable hypocrisy of the Greens. They had joined twice with the Liberal Party during the previous parliament in voting down the original CPRS on the grounds that it wasn’t strong enough.16 Yet here they were, in the next parliament, happily supporting a much weaker carbon pricing regime. Ultimately, Gillard’s hypocrisy on carbon pricing would be matched by the Greens’. Against any measure concerning our country’s climate change future, the Greens’ double standards on the CPRS and the carbon tax are now appalling matters of public record. The Greens’ interest was purely political. It had nothing to do with climate policy. In the previous parliament, the Greens’ goal was to peel political support away from Labor by claiming the CPRS was too weak. They also used this argument to justify their refusal to pass the legislation in the Senate. The direct consequence of this was to prevent Labor from entrenching an emissions trading scheme for decades to come in Australia in the early years of the government. In the new parliament, the Greens’ aim was equally political. It wanted again to bleed Labor support, but this time by demanding Labor destroy its general credibility with the electorate by having it backflip on the carbon tax. The Greens have never answered these core charges against them concerning their deep political culpability for Australia having failed to put a lasting price on carbon over the course of the last decade.

The immediate political impact of the carbon tax announcement was catastrophic. In the following Newspoll, taken on 8 March 2011, the government’s primary vote collapsed 6 percentage points to just 30 per cent, the lowest primary vote for the Labor Party in Newspoll history.17 (The previous lowest primary was 31 per cent in 1993, when Paul Keating was prime minister and the country was in the middle of a recession.)18 Gillard’s personal approval ratings also collapsed 11 points to 39 per cent, just as her disapproval rating increased by 12 points to 51 per cent.19 The bottom line was that, for the public at large, Gillard’s decision to bring in a carbon tax represented a fundamental breach of trust. Irrespective of what other reasons she might offer for her subsequent political demise, the public would never forgive her for this.

Gillard’s third ‘own goal’ in the first six months of her prime minister­ship was her announcement on 24 March 2011 of the details of her final deal with the mining industry on the future of the mining tax.20 This was not a backdown – it was a complete capitulation to BHP, Rio Tinto and Xstrata. Figures released by Treasury revealed that the original super profits tax would have earned the Commonwealth an estimated $99 billion over a decade.21 The renegotiated tax would earn only $38.5 billion.22 In other words, Gillard and Swan had yielded more than $60 billion to the miners compared with Swan’s original tax proposal from April of the previous year. The Greens, Gillard’s new coalition partners, would have a field day in their attacks on the government for running scared against the miners. This was made worse when, almost on the same day, BHP alone announced a record half-yearly profit of more than $10 billion for 2011.23 Gillard and Swan became the best friends the mining industry ever had. In the end, the tax would collect the princely sum of only $404 million!

Gillard’s curious response to her new political dilemma was to launch a counterattack on the Greens, denouncing them as being ‘from the far left’ of Australian politics and declaring that, as such, they had little in common with the Australian Labor Party. She went further by stating the Greens didn’t share basic values with the rest of the country, and did not even embrace values of ‘family and nation’.24 This was an unusual political strategy. Gillard had already lost the right of the Australian electorate because of her carbon tax backflip. Now she was driving a stake through her remaining support from the left by going after the Greens’ jugular. All this only served to drive the party’s primary vote down even further.

Fixing the CPRS, the mining tax and asylum seeker policy had formed the three pillars of Gillard’s assault on my leadership between April and June 2010. Twelve months later, the carbon tax had compounded our political problems on climate change on multiple levels. The backdown on the mining tax undermined our tax revenues for funding other government priorities as well as making us look weak in the eyes of an electorate who had little natural sympathy for the multinational mining companies. And then there was the asylum seekers policy, where Gillard had said she would deliver a new hardline approach.25 But her first foray on asylum seekers had already ended in abject failure when the East Timor Solution collapsed in a heap after the East Timorese government said they wouldn’t have a bar of it.26 Gillard then began a series of negotiations with Papua New Guinea in a reprisal of John Howard’s Pacific Solution.27 I had abolished the Pacific Solution back in 2008, consistent with the policy we had taken to the election that year (and consistent with the policy that Gillard herself had previously drafted as shadow immigration minister back in 2002).

These negotiations with PNG were still dragging on when, on 7 May, Gillard announced that Australia and Malaysia had entered into a ‘people swap’ agreement to trade refugees.28 Under this agreement, Malaysia would take 800 asylum seeker boats upon their arrival on Australian territory, in exchange for which Australia would accept 4000 people from Malaysia who had already been categorised as refugees and were resident within that country.29 This was a curious deal. From the perspective of the political right, this was hardly an equitable arrangement. From the perspective of the left, it was also a potentially inhumane arrangement, because Malaysia at that stage was not a signatory to the UN Refugee Convention.30 Malaysia was therefore not obliged to treat Australian asylum seekers in a manner consistent with the provisions of international law with the full protections of the relevant UN Conventions. Indeed, the Opposition opportunistically argued that Malaysia was a less humane alternative to either PNG or Nauru because at least those two countries were signatories to the Refugee Convention.31

By this stage, the caucus colleagues were not entirely chipper. Things were not going as smoothly as planned for the Good Ship Gillard and all those who sailed in her. The government was taking water in all three compartments of the ship: the carbon tax, the mining tax, and now asylum seekers. Then, in mid-May 2011, the Gillard government brought down its first budget.

*

Gillard had not been greatly engaged in the preparation of the budget. As with foreign policy, she had little natural interest in either finance or economics. She’d never been a systematic contributor to our budgetary deliberations over the previous three years, and that showed no signs of changing now that she was prime minister. This was a problem as it meant Swan had a much freer hand. This was augmented by the fact that he had the additional status of being deputy prime minister. He particularly enjoyed throwing his weight around during the budget process, as I was to discover during my appearance before the cabinet’s expenditure review committee as foreign minister speaking to my own portfolio priorities; all ministers were required to make such a presentation. When I asked Swan to respond to my presentation, he abruptly told me that I wouldn’t be getting one. Clearly he had decided to use this as an occasion to demonstrate his authority in full view of senior ministerial colleagues and officials. He relished the exercise of power for power’s sake. Policy always came a distant second, civility last.

If the 2011 budget was a policy failure because of its inability to begin a credible track back to budget surplus, it would equally prove to be a political failure. It was neither fish nor fowl. Not only did the budget lack a clear, decisive message on fiscal discipline, there was no standout policy initiative on the spending side of the budget either. Far from providing the Gillard government with a ‘budget bounce’, voters gave the 2011 budget the lowest rating of any budget delivered over the previous twenty years.32 Labor’s primary vote remained in the doldrums at 33 per cent.33 Gillard’s personal approval rating dropped to a record low of 34 per cent, compared with 38 per cent before the budget.34 And her dissatisfaction rating rose to 55 per cent.35

Gillard had hoped the budget would change the domestic political narrative away from the carbon tax, the mining tax and asylum seekers, but not only did it fail to create an alternative narrative based on a significant new budget or broader economic measure, Gillard’s political framing of the budget message had also been appalling. She had announced the Malaysia Solution just days prior to the budget coming down, meaning whatever message the budget was supposed to convey was therefore lost in the ensuing political noise. Many of my cabinet and caucus colleagues were left speechless by the timing of it: how could you blow the budget message by deliberately wrapping it into the rolling controversy of the asylum seekers debate? It just didn’t make sense. By this stage, many of the colleagues began openly questioning not just Gillard’s policy judgement on big calls like East Timor, Malaysia and the carbon tax, they were also increasingly sceptical about her political judgement. It was around this time that you could almost hear her standing within the caucus begin to crack. I continued to say nothing. In those days, even a sideways glance was likely to result in a charge of treason. And so this band of less than happy campers, the crew aboard HMAS Gillard – otherwise called the caucus – began sailing slowly towards the political precipice.

*

The government’s poor political standing was confirmed by the public release of a report by John Scales of JWS Research just after the budget. It had polled a massive 2141 people across ten of Labor’s most marginal seats and ten of the most marginal Coalition seats.36 Asked which of the past five governments had been best for Australia, 50 per cent nominated the Howard government, 13 per cent Hawke, 13 per cent Keating and 12 per cent my own government, with 8 per cent unsure.37 Only 4 per cent nominated Gillard. Among Labor voters, there was a parallel erosion in support: 23 per cent nominated Keating, 22 per cent Hawke, 20 per cent myself, 13 per cent Howard and 12 per cent were unsure, while only 10 per cent backed Gillard.38 For the masterminds behind the coup the previous year, things were not going according to plan.

The danger for the government was that less than twelve months into Gillard’s first term as prime minister, the voters were beginning to tune out. As anyone with a modicum of political experience can tell you, that is the most perilous position to be in. But if the government’s woes were not already sufficient by this stage, June would bring on the rolling debacle of Gillard’s unilateral decision to suspend live cattle exports to Indonesia. This led to a further flurry of background briefing from disgruntled cabinet colleagues to the media that the decision had been taken without any cabinet process and without any consultation of cabinet ministers, including myself. By the time we reached the first anniversary of the coup on 24 June, caucus, community and, increasingly, media reaction against Gillard had reached unprecedented heights. I decided the safest place to be was as far offshore as possible. Thankfully, this also happened to coincide with my portfolio responsibilities.

Despite my determination to keep my head down, just before the winter parliamentary recess at the end of June, The Sydney Morning Herald helpfully published a poll on its front page with a lead line that screamed: ‘Labor would vault to an election-winning position if it chose Kevin Rudd to lead it once more’.39 The Essential Media Poll found that Labor’s primary vote would jump 13 per cent points from 32 per cent to 45 per cent if I was the leader up against Abbott, and that Labor would lead the Coalition by 45 to 42 on the primary vote, resulting in a comfortable two-party-preferred majority of 53–47.40 This was the same margin by which I had won the 2007 election. The Herald’s polling results were reinforced by Newspoll’s three-monthly analysis of state-by-state voting intentions published around the same time. This found that I would be one of only two Queenslanders to retain their seats against an almighty swing now predicted against Labor in the Sunshine State.41 The Coalition now led Labor in my own home state by 58 per cent to 42. If this trend continued into the future, we were staring down the barrel of a complete electoral wipe-out in Queensland.

I welcomed the publication of these polling results like a hole in the head. All political eyes were focused, once again, on me. Yet I knew there was absolutely nothing I could do to salvage the situation. Those who had orchestrated the coup a year before were not about to walk around to my office for a cup of tea and a couple of Iced VoVos and then casually say: ‘Kev, let’s let bygones be bygones and would you mind coming back to lead the show?’ Those who had plotted the coup could never admit they were wrong; it would be fatal to their political power and status within the party. Besides that, their egos would never permit it. These guys would rather strap themselves to the mast and sink with the ship they had so successfully holed. Or at least let everybody else sink, because there’s one distinguishing feature about the faceless men: they always know where the lifeboats are.

Gillard, as always, was an astute player of the internal political game. She rapidly concluded that she was in serious internal trouble. So it should have come as no surprise that her press gallery journalist of choice, Phil Coorey from The Sydney Morning Herald, ran a prominent story on the eve of the anniversary of the coup in which he interviewed the independents in parliament as to their views on a possible change in the Labor Party leadership.42 Andrew Wilkie went on the record to say that his agreement was with Julia Gillard personally, not with the Labor Party, and that if she was to be removed, ‘it would mean I would be hard pressed to support her successor’.43 New South Wales independent Rob Oakeshott followed suit, describing his deal with Gillard as a ‘personal undertaking’.44 The leader of the Greens, Bob Brown, doubted whether his party could renew their agreement under a new leader.45 Coorey’s interview quoted a new poll which found that Labor’s primary vote had hit a new record low of 27 per cent.46 Gillard and her advisers knew that the government’s numbers, and her own personal polling numbers, were now in freefall. There seemed to be no floor anymore. Something had cracked in fundamental voter sentiment towards her. The combined, cumulative effect of the coup, the ‘Real Julia’ debacle, the mining tax capitulation, the Malaysia Solution, an underwhelming budget and, most importantly, the carbon tax betrayal had caused the voting public to simply switch off. So, with nowhere to go politically, the best strategy for the Gillardistas was to nobble any would-be opponent. Coorey’s article was designed to circle the wagons around Gillard by sending a message to the caucus that if they removed her, the independents would withdraw their support from the minority government and it would fall. This was vintage Gillard. Whereas Gillard always had something of a cloth ear in her relationship with the wider Australian public, she was acutely sensitive to the slightest shift in internal party sentiment, just as she was well versed in the Machiavellian craft necessary to consolidate her internal political position. The threat was unmistakable: If you even think of blasting me out of this job, I’ll take you all down with me. Chilling. But definitely effective.

Gillard was granted some political respite during the parliamentary winter recess of July–August 2011. In early August, cabinet deliberated on the draft National Disability Insurance Scheme. This was a proposal which came out of the 2020 Summit back in March 2008. I had then referred it to the Productivity Commission for advice on the scope of the NDIS as well as the range of options for the funding of the scheme. Following that, the government had engaged in an internal debate on the precise shape of the scheme we could put to the states, given that they shared responsibility with the Commonwealth on the delivery of dis­ability services. Gillard was then authorised by cabinet to take the scheme to a COAG meeting with the premiers and chief ministers on 19 August, whereupon an intergovernmental committee was established to agree on the details of the final scheme. Finally, twelve months after the 2010 election, Gillard at last had something positive to say to the Australian people about what the government was doing for them.

This glimmer of political light, however, was soon shattered by the explosion of what would become known as the ‘Craig Thomson affair’. The Sydney Morning Herald revealed that Thomson, a former official of the Health Services Union who had subsequently become the federal Labor Member for Dobell, had charged the services of prostitutes to his union expense account.47 Given the minority Labor government’s precarious position in the House of Representatives, the loss of Thomson’s vote had the potential to bring the Gillard government crashing down through no fault of the prime minister.

There are times in politics when you think things could not get any worse, and then they do. This was just such a time. On 31 August 2011, barely a week after the Craig Thomson affair erupted, the High Court of Australia overturned the government’s Malaysia Solution.48 It was ruled to be incompatible with Australia’s international obligations. This meant that twelve months after Gillard had promised both the caucus and the country that she would act decisively on asylum seekers, the third of her proposed regional ‘solutions’ to the problem – East Timor, Malaysia and Manus – had blown up. Even worse was the government’s reluctant concession, after the High Court defeat, that they would now have to consider Nauru as the only remaining option. In other words, we would be embracing the full rehabilitation of Howard’s Pacific Solution, which both Gillard and myself had spent the previous five years vilifying. Gillard proceeded to compound the government’s difficulties on Malaysia by launching a public broadside against the High Court, lecturing the court on what she described as a ‘missed opportunity’.49 This was the kind of critique usually reserved for governments on the right, not the left.

The political consequences for both Gillard and the government were devastating. The numbers alone demonstrate we were bleeding badly now from both the right and the left. Gillard’s approval rating as prime minister fell to a record low of 23 per cent. Her disapproval rating sat at 68 per cent. Abbott was leading Gillard as preferred prime minister by 43 to 34 per cent.50 And the net consequence of all of the above was that the Coalition now led Labor by a staggering 59 per cent to 41 per cent.51 The commentariat began reporting that there was now a ‘stench’ around the government, that Gillard had become a ‘dead man walking’. With two years still to go before we had to face the people again, within the caucus panic began to set in. Nobody, however, was offering any clear solution. And certainly not the faceless men whose political judgement a cowed caucus had been forced to accept fifteen months before.

The background briefings appearing in the media at this time were coming from Gillard’s own supporters, as reflected in the commentary from the journalists reporting the government’s woes at the time. The mismanagement of asylum seekers policy was front and centre in caucus disquiet. After all, Gillard had promised them she would implement a hardline in her de facto campaign to become leader. She had told them she understood the terrain given her previous experience as the shadow minister for immigration. But still she had managed to lurch from one exploding cigar to the next in her efforts to look tough. Paul Kelly, the journalist–historian of Australian politics, has described the overturning of the Malaysia Solution by the High Court as a seminal event in the eventual decline and fall of the Gillard government.52 In truth it was deeply delegitimising. The left saw it as an abandonment of all principle, while the right as evidence of rolling incompetence.

And still the boats kept coming in greater and greater numbers. Gillard and I ended up serving as prime minister for roughly the same length of time. Under my governments, a total of 141 boats arrived carrying 6,700 asylums seekers.53 Under the Gillard government, there were a total of 603 boats carrying 39,000 asylum seekers.54 Four times as many boats. Six times as many asylum seekers. The numbers demonstrate that Gillard’s whole argument on toughening up on asylum seekers policy as a justification for the coup was an absolute crock.

Given Gillard’s post-facto narrative that during this period she was the victim of relentless undermining and media backgrounding by an as-yet-unidentified group of ‘Rudd supporters’, it seemed that barely one year into her government much of the undermining was coming from her own core group of supporters from the 2010 coup. Meanwhile, I was recovering from heart surgery. Not even my worst detractors could accuse me of destabilising Gillard’s leadership while I was on a respirator. Mind you, I’m sure they thought about it. Or at least how to turn the respirator off . . .

I returned to work the week of 19 September, having been out of action for just over six weeks. I went straight to New York for the annual UN General Assembly, intent on persuading foreign ministers from around the world to cast their vote in support of Australia’s UN Security Council candidature. But as soon as I fronted the media for the first time, questions about Gillard’s leadership came thick and fast. Journalists love leadership stories. They are simple, they are dramatic – much more exciting than reporting on the entrails of the NDIS or the NBN. But while Gillard’s leadership credibility had collapsed comprehensively since the High Court decision on the Malaysia Solution, there was absolutely no possibility of leadership change. There was a good reason for this: I was not a candidate. And while colleagues such as Bill Shorten, Stephen Smith and Greg Combet (Smith and Combet had also been mentioned as leader­ship prospects in the media) might be quietly talking themselves up as possible replacements for the hapless Gillard, none of them was about to put his hand up either, for the very good reason that none of them had anything approaching the numbers to do so.

Indeed, the first time I had to deal with an approach from an individual caucus member over whether I would reconsider my position on the leadership was at the end of 2011, when Kim Carr came to see me. In a conversation with Benjamin Netanyahu twelve months earlier, the Israeli prime minister had predicted my comeback, but he warned that if I was ever to return to the leadership, it would have to be because those who had deposed me were asking me to save their political hides; it was the only way to ensure they wouldn’t tear me down again. But despite our disastrous political circumstances, there was no sign that the faceless men would be calling on me any time soon. Out of sheer malice, they would rather take the whole party down with them than return the reins to me. My only option, therefore, was to keep my head down, and that meant saying no to the entreaties of Carr and others who started coming to see me in increasing numbers. My response to all of them was plain: ‘You guys knifed me. You guys were party to my knifing. You guys can fix it.’ Even Combet came to see me at some stage. I remember it well. It was in my office in Parliament House. Ostensibly he had come to talk about the diabolical politics of the carbon tax, given that Gillard had now made him Minister for Climate Change. But the conversation soon turned to the leadership. He said if change were to come about, he would want a senior economic portfolio. I asked whether he meant Finance. He was quick to correct me. ‘Treasury,’ came the reply, without the bat of an eyelid. I liked Combet. But Greg was never a political saint in all this.

The political caravan continued to rumble on, but I just shrugged my shoulders. Time and time again, I would say to any of the caucus colleagues who came to see me that my precondition to even consider a return to leadership was a universal draft by those who had organised the coup. That usually stopped the conversation dead in its tracks. Gillard, by then a dab hand at plotting the demise of political leaders, was convinced an organised conspiracy was afoot. What she failed to understand was the difference between organised conspiracy, which she knew well, and disorganised panic. More importantly, Gillard refused to recognise that by the end of 2011, we had been in a dire position in the polls for more than a year.55 In my case, in 2010, we had had difficult polls for little more than a month before she struck.56 The trend lines were clear on Gillard’s seemingly inexorable political decline, as were the causative factors: the perceived illegitimacy of the coup; the betrayal of the electorate over the carbon tax; the rolling farce of the asylum seekers policy; together with the absence of any real, sustaining positive agenda, apart from the very beginnings of a negotiating process on the future of the NDIS. And none of these had anything to do with me; they were problems of her own making. The problem I represented was simple: I continued to exist.

By the time I returned to parliament in mid-October, the place was like a tinderbox. Whatever you said in parliament, however you looked, whomever you spoke to would be scrutinised within an inch of its life. If you got anything technically wrong, you would be judged as having failed abysmally. If you performed well and demonstrated you were across your brief, then of course you would be attacked for ‘shamelessly showing off’ or ‘campaigning for the prime ministership’. The reporting on my performance fell very much into the latter category.

The week of my return saw a devastating leak of a long cabinet discussion on asylum seeker policy. One of the cabinet colleagues had helpfully given a blow-by-blow account of the cabinet meeting to Peter Hartcher of The Sydney Morning Herald.57 It painted immigration minister Chris Bowen in a negative light, while praising me for trying to find a constructive way through our dilemma. The political tactic behind the leak was clear: to make it look as if I was responsible. I took the somewhat unorthodox step of going to talk to Gillard about it. I expected her to be apoplectic so was surprised by her equanimity – perhaps because, for a change, others were being criticised in the article and not her. She assured me that she knew I wasn’t the source of the leak because she was aware that Bowen was my friend and I would not be in the business of sticking a knife into him. Occasionally, there could be civility in our relationship.

*

Gillard’s electoral position continued to deteriorate, but she hoped that a trifecta of high-profile international engagements during October and November 2011 would lift her political stocks: the Commonwealth Heads of Government Meeting (CHOGM) in Perth starting on 28 October; the G20 summit in France on 3 November; and Obama’s visit to Australia on 16 November. I had secured Australia’s chairmanship of CHOGM at the previous Commonwealth summit in Port of Spain in November 2009. CHOGM came at a perfect time to help our campaign for a non-­permanent seat on the UN Security Council, as we would have the heads or deputy heads of fifty-three states in the country. I would also be chairing the meeting of all Commonwealth foreign ministers as we drafted the communiqué for adoption by our respective political masters.

Commonwealth membership is an essay in diversity, and to try to forge a common position on any major international policy issues was a serious challenge. Human rights abuses in Sri Lanka following the war in 2009 was at the top of the list. I had to intervene to prevent the recommencement of hostilities on the conference floor between the Sri Lankan and the Canadian delegations. Then there was the human rights agenda on the proper protection of gays and lesbians, and a struggle to keep the peace between the Ugandans and the Canadians. Eventually, after thirty-­six hours of negotiation, we agreed on a compromise text. I then took the assembled throng to a winery in the Swan River Valley to celebrate our success.

We all thought our work had been done. We had been authorised by our respective heads of government to leave Perth now that the main game was arriving in town; the unofficial Commonwealth convention was that once the prime ministers arrived, it was time for the foreign ministers to depart. In my case, however, two unusual things happened. First, Gillard asked me to attend the heads of government meeting to brief them collectively on the results of the communiqué negotiations. I didn’t particularly want to do this, feeling it would be embarrassing for many of the other heads of government whom I had got to know personally when I was PM and whom I now counted as friends. In any case, Gillard was well supported by her own officials and was herself more than capable of taking her colleagues through the text of what the foreign ministers had agreed, and the heads of government almost always automatically adopted the communiqué.

The second odd thing was that Gillard, having summoned me to the conference venue at Kings Park in Perth, and having made her point to the assembled world of who was in charge of Australia now, and demonstrably that wasn’t me, then dispatched me to the airport. But because of a lightning Qantas strike, which effectively grounded all my Commonwealth ministerial colleagues, I decided not to take my own VIP flight back to Canberra, but to wait in Perth until we had secured alternative flight arrangements for each of the other ministers back to their home countries. Late that afternoon, well after I was supposed to have left, I was informed that Gillard had decided she wanted a series of changes made to the communiqué – despite the fact that I’d already been told to go back to Canberra. To this day, I still don’t know whether Gillard and/or her political staff were aiming to put me into an impossible position by being halfway across the Nullarbor at a time when I was needed back at the conference in Perth. Then the briefing line could be run that, in my absence, Gillard had had to rework the CHOGM communiqué herself while her foreign minister was AWOL. It was pure chance that I happened to be in Perth still. Indeed, Gillard’s staff were shocked when they found out that I was, which rather gave the game away. I would later learn that none of the other heads of government were interested in any of the changes to the text. Seemingly this had all been a ploy by Gillard designed to humiliate her predecessor for not having done his job properly. This was adolescent, amateur-hour domestic politics being played out on an international stage. I duly reconvened the remaining foreign ministers and we worked until 1 am to produce the revised communiqué, based on consensus, as requested. My foreign colleagues were less than amused.

Australia did not take any particular initiative to the G20 summit in France, though Gillard got lots of happy snaps with international leaders, which usually helps with politics back home. But the Obama visit to Australia of November that year possessed much greater politi­cal potential for Gillard’s plummeting electoral stocks. Obama was almost universally popular in Australia. Indeed, according to a 2011 Lowy Institute poll, support for the US alliance under Obama’s leadership stood at 82 per cent.58 The visit was an outstanding policy and political success. None of these major international meetings, however, was able to raise Gillard’s domestic politics stocks. In the first Newspoll following the three events, the Opposition’s lead over the government had increased to 57–43, or 14 percentage points.59

Meanwhile, the political vortex that is the Australian Labor Party National Conference, to be held at Darling Harbour in Sydney, loomed before us. This was always going to be a difficult conference. The party was split down the middle over the events of June 2010. We had scraped through the subsequent federal election by the skin of our teeth and had then been forced to form a minority government. Since then, political calamities had followed one after the other in rapid succession. Party delegates were unhappy with Gillard’s capitulation on the mining tax. They were unhappy with her hypocritical position on same-sex marriage (she had sold out to the right-wing, Catholic-dominated SDA union of Don Farrell in exchange for his support in the coup),60 and they were unhappy that Gillard had pre-empted the conference by stating the government would be approving uranium sales to India. And then there was the issue of asylum seekers, the granddaddy of them all; the branch membership was enraged by the steady erosion of our position from my abolition of the Pacific Solution to Gillard’s eventual reintroduction of the Pacific Solution by another name.61

Despite all these disagreements and disappointments, the longstanding tradition of our national conference was to provide a platform for the leader to deliver a major address in which he or she could shine – not just for the party faithful, but for the national television-viewing audience. That’s when Gillard kicked yet another own goal. In her speech, she listed each of the post-war Labor prime ministers, reciting their seminal achievements for the party and the country: Curtin, Chifley, Whitlam, Hawke, Keating . . . and then nothing. The significance of the omission of the name ‘Rudd’ was understood within an instant by every single delegate in the room – and certainly by the assembled media.62 It was intended as one giant whack in the face.

I was seated in the front row, together with my ministerial colleagues. I remember an audible sucking in of breath by those sitting around me. I remained silent, staring straight ahead. I maintained public unity, nodding approvingly all the way through her address and then partici­pating in the mandatory standing ovation. But that was just the first course. Swan was already lined up to deliver the second. Just in case anyone had missed the subtlety of Gillard’s first whack, Swan too listed each of the previous Labor prime ministers and their policy legacy, once again omitting my name from the sequence. The effect was equally electric. If anyone thought Gillard’s omission had been unintentional, Swan’s speech removed any doubt. They had used the national conference to declare open season on Rudd, and that was precisely how it was seen by the party, the national media and the public at large.63 It became the national news story of the conference. And it made both of them look very small indeed. All they needed to do was add a single line acknowledging my achievements in bringing the country through the Global Financial Crisis, or in establishing the G20, or in defeating Howard and eliminating WorkChoices. It would have made them look magnanimous. But magnanimity, even when it was in their own self-interest, was well beyond their political repertoire.

The next day saw my opportunity to address the national conference. It was the responsibility of each minister to introduce their chapter of the conference policy platform, and as foreign minister it was my role to explain what we had been doing in the region and the world. The truth is I had been hurt by the events of the previous day. If they had intended to humiliate, they had succeeded. But by the next day, humilia­tion had become defiance. If they wanted a fight, they would get one. So I spoke without notes. I used the full time which had been allocated to me. And I spoke with passion about the translation of Labor values beyond our shores. I was genuinely surprised when I received a massive ovation. Gillard and Swan were alarmed. Conferences normally only accorded that sort of response to the leader. One delegate after another came up to slap me on the back and voice their approval. They were angry that I had been treated badly the previous day. Even those who opposed me were dumbfounded by the political stupidity of Gillard and Swan in deliberately turning me into the issue of the conference. Gillard’s office’s response, sensing conference sympathy for my predicament, was to then selectively leak to the national media, the very next day, part of the Bracks–Faulkner–Carr Review of the 2010 election, which they then proceeded to spin as being critical of my role in the campaign.64 The full review, which had in fact been highly critical of Gillard’s campaign, had never been released to the party membership because it was so politically sensitive. The selective leak that day, however, only compounded the Gillardistas’ self-inflicted political problems at the national conference. It had become something of a minor debacle.

Gillard’s proclivity for political mismanagement would continue through to year’s end. On 12 December, she announced a cabinet reshuffle,65 which promoted some while demoting a number of others who had been strong cabinet performers. Most importantly, this meant putting Shorten into cabinet as Minister for Employment and Workplace Relations. The industry minister, Kim Carr, was demoted to the outer ministry, meaning that manufacturing would have no cabinet-­level representation. This sent an appalling message to the automotive sector in particular66 and resulted in a wave of public support for Carr from across industry. Gillard also tried to demote Robert McClelland from cabinet in order to make way for her buddy Nicola Roxon to become attorney-­general. McClelland, to his credit, refused to budge. As a result, he was moved sideways to become an omnibus Minister for Emergency Management, Housing and Homelessness. It was a nothing portfolio. Robert knew it and resented it. Martin Ferguson, who had never supported Gillard since their days working together within the Victorian left, summed up the seething sentiment that began to seep out across a number of cabinet ministers. When asked whether he remained loyal to the prime minister, Ferguson’s memorable reply was: ‘I’m loyal to the ALP.’67

The government hobbled its way towards the welcome respite of Christmas. Gillard’s style was seen as increasingly autocratic. The cabinet was split. The caucus was sullen. We had been smashed in the polls for more than a year now. And one self-inflicted political and policy wound after another had left the government reeling. Sooner or later, something was bound to give.