Hockey: Not Your Average Joe (22 page)

By the time of Joe’s leadership bid, it was time to move from the practicalities of politics – the necessary fixes that had been part of his ministerial career and the salesmanship that had made him one of the nation’s most recognised and liked politicians – to some exploration of why politics mattered and what sort of society it should service. This was Joe’s idea; he wanted to place markers down outside the traditional Treasury policy remit. And thus began a three-year campaign to spell out what he stood for and what he thought his party and the nation should stand for.

At one level he was engaged in a destructive and gladiatorial contest with the government; on another, he was waging a constructive personal journey of ideas. The campaign to sell who he was and what he stood for culminated with a speech in London, calling for ‘The End of the Age of Entitlement’ (this same theme would resurface ahead of the 2014 Budget), but began at the Sydney Institute in November 2009 with a speech entitled ‘In Defence of God’.

In that speech, Joe spelt out the value of faith of any sort.
‘The struggle to find meaning in our lives is one that is essentially individual and universal. It is also timeless,’
the shadow treasurer told the conservative think-tank. And he left no doubt about the link between belief and politics.
‘Many parliamentarians, if not most, will form judgments based on their faith and the values that flow from their beliefs. It is unrealistic to expect that any person can neatly quarantine their faith from their judgment, just as it would be unrealistic to expect a person to strip bare their decision-making from the weight of their life experiences
.’

Lamenting the decline of faith, he warned of its worth as a stable reference point.
‘The human side of religion is exemplified by those who dedicate their lives to helping others. They often provide us with life inspiration. In the past that inspiration has often come from the works of the saints, the mystics, the prophets and in the case of my faith, from the teaching and example of Jesus Christ.’
Drawing the questions of faith back to the practical issues of governing, he said:

… If I reflect on society today, the stage on which such inspirational figures play is becoming crowded with new characters devoid of values. They do not encourage us to reflect on how we can make our own lives or those of others better. The cult of personality is not new. However, I question the example that is set by the celebrities whose only achievement is a brand of perfume or a reality program on Foxtel. I wonder if when such people become our role models are we in fact just diminishing ourselves.

From time to time in politics we see a similar cult of personality. Politics attracts people who can lead and inspire. However, for much of the history of Western democracy, the values and policies of politicians have been as important as the personalities of their proponents. Maybe it’s a result of convergence in mainstream political beliefs – the absence of the great philosophical divide that once dominated our politics, or maybe it’s the nature of mass communications today – but the trend that I see in politics is one where personality is winning over the substance that should be at the heart of political life. The danger is that we manufacture politicians in the same way that celebrities can be created. Too many politicians seek to portray an image of something other than themselves. Image is about spin and media management and not about the real person – warts and all.

We should not be afraid to be real. We would do well to avoid confection. In short, no leader should pretend to be something they are not.

By March 2010, when he embarked on his next marker speech, it would be clear that no-one in the future would doubt what Joe Hockey stood for.

Joe knew the leadership could have been his, but now belonged to Tony Abbott, who was looking strong and decisive. The consequence of his earlier wishy-washy position was seen by many inside and outside the party as soft, lacking the hardness of principle that would give conservative politics the leader it wanted. Joe was determined to ensure he was not pretending to be something he wasn’t. But in the ensuing series of speeches he took the chance to spell out who he was – warts and all. Not just a conservative politician with an avuncular manner but a national leader with flesh on the bones of his political thinking. First, it was ‘ln Defence of Liberty’ to the Grattan Institute in Melbourne. Then, a month later ‘In Defence of Enterprise’ to the Labor-leaning Eidos Institute, before heading back to the Sydney Institute for ‘In Defence of Opportunity’. ‘In Defence of Youth’ was presented at the University of New England’s Earle Page College. They were all marked ‘in defence of’ because Joe felt the ideas he was pursuing were under attack. He wanted to be seen as defending them.

Joe then broadened the brief with speeches on ‘Australia’s Future Engagement in the Asian Century’ in October 2011, ‘The Future of Free Markets, Global Trade and Commerce’ in December 2011 and, finally, the speech that really got noticed, ‘The End of The Age of Entitlement’ to the Institute of Economic Affairs in London in April 2012. The origins of this speech are interesting. Travelling earlier with Andrew Burnes, Joe had talked about the amount of waste across Europe. ‘You should do something on the Age of Entitlement,’ Burnes told him. Joe jumped on it. That was exactly right. He should. Burnes didn’t let up either, later sending through some notes hoping Joe would find them useful.

Each of Joe’s marker speeches drew on the principles he’d outlined in his maiden speech a decade and a half earlier, promoting the principles of what he saw as liberalism. In ‘Defending Enterprise’, Joe tied support for liberty and free enterprise.

It always intrigues me that there are so many on the Left of politics who argue for civil and political rights while, at the same time, seeking to diminish individual economic rights and the role of our free enterprise system. Similarly, there are some on the Right who argue forcefully for capitalism but yet would happily see the state intervene in matters of personal morality and values. Both approaches contain fundamental contradictions. The hypocrisy is palpable.

He outlined six priorities that needed to be satisfied in modern enterprise. They were: reward for risk; encouragement of innovation; a free and fair market; delivery of promises; stability; and availability of capital.

In defending opportunity, Joe returned to a theme he had raised first in his maiden speech, the inequality of women, particularly in corporate life.
‘The fact that just over 11 per cent of board members of ASX200 companies are female is simply disgraceful … Women hold just 2 per cent of chief executive positions and 5.9 per cent of executive line management positions – a number that has shamefully declined rather than improved over recent years,’
he said. Recognising some advances, he lamented that they were too slow in achieving anywhere near a balance.

There are many that are reluctant to embrace gender quotas. My view is that quotas must be a last resort. However, after arguing the case for better corporate governance and gender equity for more than a decade, with little success, we are now approaching the last resort. Such is the depth and severity of the problem that there is an overwhelming case for the Australian government to set a target for gender balance for the boards of publicly listed companies.

In this speech, Joe started to canvass reforms that would take on greater meaning a year later when he spoke on The End of the Age of Entitlement. In particular, he focused on welfare as an impediment to opportunity.

How do we judge whether social security is providing a genuine safety net for those in need rather than a net of entanglement from which there is no escape? How can our $116 billion a year welfare system give Australians opportunity? My greatest concern is to ensure that our welfare system does not create long-term or intergenerational dependency for those able to participate in work. A system that encourages reliance on welfare is an addiction that becomes difficult to escape.

Joe continued to put down markers through the year, with the themes he had been exploring coming together in ‘The End of the Age of Entitlement’. It was a speech that made commentators stand up and notice the shadow treasurer’s intellectual position on where Australia was and where it and other Western nations should be going.

Equality of opportunity rather than equality of outcome is my preferred model for contemporary society … Thankfully, the modern capitalist economy is centred on the satisfaction of personal wants and needs. Commercial transactions are at the core of the system. And it is a simple and proven formula for willing buyers to engage with willing sellers. If we want a product or service we go and buy it with the dividend from the fruits of our own labour. The producer is happy and the customer is satisfied. The problem arises, however, when there is a belief that one person has a right to a good or service that someone else will pay for. It is this sense of entitlement that afflicts not only individuals but also entire societies. And governments are to blame for portraying taxpayers’ money as something removed from the labour of another person.

The audience was mainly a small group of Tory MPs; there wasn’t a journalist in sight.
‘In our collective effort to win votes, political leaders deliberately portray a new spending commitment as if it is coming out of their own personal bank account. Political leaders rarely thank taxpayers for their funding of the policy,’
he said.

He linked the behaviour of governments to the behaviour of poor parents unwilling to say ‘no’ to their children’s demands.

A weak government tends to give its citizens everything they wish for. A strong government has the will to say no … Being profligate is easy and politically popular in the short-term, particularly when the political cost of raising sufficient revenue is avoided by resorting to debt. But painless revenue makes for reckless spending … Whether it is defence, law and order, income support, social programs and so on, the outcome is the same. Eventually the piper has to be paid.

He then talked through the failings in the major Western economies that had been caught in a debt trap.

Our most deeply exposed Western economies can no longer continue to accumulate debt without constraint. Ultimately, spending on entitlements becomes a structural problem for fiscal policy … The bottom line is that our communities need to make a tough decision. We cannot choose both higher entitlements and lower taxes. We can take more and more of our citizens’ money and spend it for them or we can take less of it and rationalise government services.’

His concrete suggestions included an increase to the retirement age, the introduction of universal compulsory retirement schemes and the phasing out of defined benefit schemes. And there needed to be a rethink of what services governments should provide and at what cost to consumers. He accepted that reduced government spending would result in a lower standard of living but the alternative was for governments to use up their credit with even more catastrophic impact. The baby bonus, which he had received twice, was foremost in his mind.

The Western world is at the most important economic crossroad in its history – governments must accept their responsibilities to fiscal discipline and the prudent use of their citizens’ hard earned monies or they need to accept that the demise of Western economies will be forced upon them in a dramatic, unpredictable and possibly violent way … Restoring fiscal credibility will be hard. But it is essential we learn to live within our means.

It was also, knowing he was likely to become treasurer at the next election, a planned arrow across his colleagues who publicly supported small government but would be lining up outside his office for funds.
‘The Age of Entitlement should never have been allowed to become a fiscal nightmare. But now that it has, governments around the world must rein in their excesses and learn to live within their means. All of our futures depend on it.’

With no media in attendance, like most speeches our politicians deliver, it could have sunk without a trace. But Joe’s media advisor Tony Ritchie alerted the ABC’s
Lateline
, and Joe joined the program live, from London. The criticism was swift and fast, including from within his own Party over the timing of his speech, and certainly sections of the media, including
The Australian
, which didn’t show the enthusiasm Joe expected.

Later, he ran into Rupert Murdoch. ‘I said, what the hell is
The Australian
doing? He was appalled,’ Joe says. But the speech also wrapped up a new image of Joe. He was now seen as a hard-head. Avuncular Joe was gone.

‘Not all political figures grow and develop when they take on new roles,’ Liberal Party director Brian Loughnane says. ‘Joe clearly – through his whole political career – has moved step by step to a stronger position.’

Howard agrees. ‘I think he’s done very well over the past couple of years.’ He sees the changes in both presentation and policy. ‘The way he has argued his case has been extremely good. He has set out a series of speeches. He has clearly set out to make himself a standard bearer for economic reform.’ Now, like Abbott, he will be tested by events as they unfold, and judged accordingly. ‘There’s nothing like the furnace of actually being there.’

NINETEEN

The joint Liberal-National
Party meeting room in Canberra’s Parliament House says everything about the Party and the way it is configured. Like the rest of Australia’s centre of government it is austere in design. Its character is determined by those who have used it and the dominance of the 13 men to have led the Party since its formation by Sir Robert Menzies, seven of them since the grand Parliament House commissioned by Malcolm Fraser opened in 1988. Just two of those seven, John Winston Howard and Tony Abbott, have led the Party in government and got to occupy the prime ministerial suites just up the corridor.

Australians don’t need to have ears inside those walls to know some of the dramas and power plays that have begun and ended there. Nor the careers that have risen and fallen on the votes of those who have occupied it. First, it was a battle of personalities to determine who would lead the Party in the face of the dominance of the Labor machine fronted by Bob Hawke as prime minister and Paul Keating as treasurer. Peacock v Howard then Howard v Peacock coloured the Party’s positioning for most of the 1980s and the early 1990s. Then the Party switched gears and went for the game changer, Dr John Hewson, to deliver a grand vision for the nation in 1993. After a flirtation with Alexander Downer, John Howard reclaimed the leadership in 1995.

From the second term of the Howard government, leadership was in the air again with the question over when or if Howard would hand over to his deputy, Peter Costello. And then whether, or if, Costello would challenge the Party’s
modern-day
Menzies. Through all those years, leadership was at the core of what the public thought of the Party. And leadership was always measured in that room where MPs and senators meet every Tuesday parliament sits or when circumstances demand it.

It was at a regular joint Party room meeting in the second half of 2012, about a year out from the 2013 poll, that Warren Entsch, the much-loved north Queenslander who was also the chief Opposition whip, rose to his feet and in his natural but effective drawl raised what he considered to be an important issue. ‘I want to congratulate the Opposition leader and the shadow treasurer for coming of age,’ he declared. This was the moment Entsch believes he knew the Coalition would steal victory. He had retired in 2007 and returned in 2010 but in the following year he wondered how much Abbott and Joe were in tune. Their offices seemed, sometimes, to be in competition or running parallel agendas. ‘But then it changed dramatically to a point where you could see that they were both rock solid behind each other,’ he says. ‘Up to that point I don’t think we were ready [for government].’

Now, you could even tell from their body language that they were feeding off each other, working together, wanting the same prize. Entsch’s statement was greeted with applause and a recognition among the men and women in the Party room this could easily have not been the case, a fact recognised also by the two men whom Entsch had congratulated.

The elements of discord between Joe and his leader had been seeded in that very room just 34 months earlier in the leadership ballot that Joe had botched by his advocacy of a conscience vote on the Rudd government’s emissions trading scheme, which he favoured. Joe’s candidacy was lost in the first round of that ballot when Turnbull retreated from an alleged deal to support him, splitting the moderates’ vote. Joe, livid with Turnbull, had to decide who to support in the next ballot: Abbott who wanted to eliminate the ETS, which Joe believed in, or Turnbull who had just delivered his greatest political embarrassment and whom he had already decided he could never trust again. Joe’s vote went to Turnbull who lost the ballot by a single vote. Had Turnbull won, Joe’s vote would have been decisive but he would have been left serving a leader he believed he couldn’t trust.

Abbott says he’s not surprised Joe gave his vote to Turnbull. ‘The important thing is not what people thought then, the important thing is how they acted, and given the situation that Joe found himself in, he performed in an exemplary fashion.’ Politics is a fickle master though. Relationships can form and dissolve on a policy. You can work each day with someone to bed down a view, or a vote, or an alliance. That relationship can dissolve in minutes once the alliance is no longer needed; the need to be close expires. ‘It’s a bit like that with Tony and Joe,’ one senior advisor says.

Joe’s relationship with Abbott is much more complex than that. So much unites them and so much divides them. Eight years apart in age, they both believe strongly in the Liberal tradition, sharing the learnings of a Jesuit education (from different Sydney schools), and attending Sydney University. Both come from the NSW wing of the Party but neither played a big role in the Party organisation and that meant they didn’t have to face each other in the trenches or wear the scars of wounds inflicted upon each other. Peta Credlin, Abbott’s chief-of-staff, says she sees them as very similar personalities, both valuing a large extended family, both being drawn to politics despite being able to choose another career path, and both optimists.

Their differences are just as conspicuous. Abbott is a fitness fanatic, his real friends hidden in that bunch of cyclists he takes to the roads with many mornings. Joe likes to trek up mountains for charity, but there has to be a reason other than fitness. Abbott’s children are off his hands, Joe’s are still small. Abbott comes from the conservative end of the party and Joe is firmly in the moderate camp. The Abbotts’ income comes principally from politics; the Hockey-Babbages are independently wealthy. Joe is a feminist. Tony fights the perception that he is anti-women. Joe draws energy from mixing it with the public in a shopping mall, in the same way Bob Hawke did – handling babies, talking to old men, getting amongst it. Abbott is more the action man, taking on bushfires and waves, but seems less comfortable in an impromptu mall walk-through.

The differences go on. Tony Abbott was a favoured political son of Howard, Joe wanted to be. The two got into a fight at Sydney University, and there have been plenty of non-physical stoushes, such as the republic debate, between the long-term rivals. But despite all that, they get on, and their relationship, based on trust, is tighter than any other prime minister–treasurer coupling in recent history. ‘You wouldn’t expect either of them to be around at each other’s house for a beer on Saturday afternoon but they have this intense political relationship, which nine out of ten times is phenomenally productive and it is in their case,’ one of the government’s top advisors says.

It wasn’t always that way. But their ability to talk openly to each other was formed early on in their Canberra tenure, with regular t
ê
te-
à
-t
ê
tes at a local restaurant, Portia’s Place. There, on Monday nights when parliament was sitting and over shared dishes of pepper steak, Shantung Lamb and boneless crispy chicken in lemon sauce, Abbott and Joe would meet for a meal. Ross Cameron, who lived with Joe and was from the Right of the Party, instigated the evening get-togethers, and South Australian backbencher Christopher Pyne who, like Joe, came from the moderate side of the Party was a regular. Abbott says: ‘Ross said to [us] … one way or the other you guys are going to be very important to the future of this Party in the years and decades to come and I think it’s much better that you guys be friends rather than simply rivals.’

It was a motley crew and it’s hard to think of too many controversial policies where they would have all been on the same side through those years where the republic, the GST, an apology to the original Australians, the waterfront dispute and the growing stream of illegal boat arrivals were on the agenda. The one thing they all shared was a strong support of Catholicism. The meals weren’t strategic in any case, with conversation more likely to centre on sport, children and wives. All of them considered it a bit of a reality check and just as Joe loved his staff to take a different position from him, so too did Tony. They liked to hear what others, not like them, thought. The dinners weren’t about forming allegiances, or even friendships, but they provided a basis for respect even when policy differences dictated their public slanging matches.

It was that well of respect that both Abbott and Joe drew on after the Party room vote that made Abbott leader by such a narrow majority. Joe had gone into the ballot believing the leadership would be his, and the Party room gifted it to someone who held a position he fundamentally disagreed with. He’d been out-played by Abbott, who had just been declared the Party’s new leader. It was a script few in the room thought would be written, but the next lines were even more bewildering to Joe, who had been his rival only minutes earlier. Abbott said he wanted Joe to stay as his Treasury spokesman and Christopher Pyne, who had supported Joe, to remain as leader of the house. To this day, Joe describes it as magnanimous, and an appointment he would not have expected.

Abbott doesn’t think so. ‘He could have reacted badly to that but he didn’t. He felt a little sore for 24 hours or so but then he just buckled down and kept at it.’

Joe wanted the job, and why not? By this time, Joe had been a minister in four different portfolios and an Opposition spokesman on another three. He was well grounded in business and the economy. And it was a great career move.

By the start of 2010, the resources boom that had kept Australia rolling for a decade looked like slowing in the face of weaker Western demand, as the reality of the Global Financial Crisis (GFC) reached main street America and the overstretched governments of Europe. Wayne Swan, as treasurer, was a weak public performer, a poor salesman for the Rudd government’s achievements in keeping Australia out of recession. There was increasing evidence that the government’s response to the GFC (to spend the surplus) was unravelling through a series of failed schemes. This gave Joe something to work with. And he had a leader whom he could trust (even though he’d run against him) and, just as importantly, a leader who professed limited interest in economics despite his degree in the area.

But a month later, Joe started to rethink whether he genuinely had his leader’s support. He asked his staff: ‘Why has he given me the job, but not thought enough of me to talk to me about big decisions?’ Behind that question was Abbott’s January 2010 announcement of a green army, a 15,000-strong workforce dedicated to environmental remediation. ‘The political Left shouldn’t be seen as “owning” the environment (it’s too important for that) and I am determined to challenge any assumption that it does,’ Abbott said at the time. ‘Conservative political Parties and the conservation movement both want to preserve what’s best in our heritage.’

The big deployment was an attempt for the Party to give the environment, in the wake of the destructive climate-change debate, a priority. None of that bothered Joe too much – except it was the first he had heard of it. Two months later, the same thing happened again. This time it was a paid parental leave policy announced by the new invigorated leader on International Women’s Day, in March 2010. With the green army targeting environmental perceptions of the leader, Abbott targeted the tricky women’s vote. Big business would face a 1.7 per cent (later cut to 1.5 per cent) levy on company tax above $5 million to fund six months’ paid leave at full salary, capped at $150,000 a year.

Big business rumbled but didn’t erupt at the scheme, but the Party room was in uproar. The hardheads knew that it would open the Coalition up to an accusation of raising taxes even though the extra tax would only apply to big businesses. But, more importantly, neither the Party room nor the businesses who would pay had been consulted. Abbott, however, had conferred with one leading business figure, the media proprietor Rupert Murdoch, who had been in Australia the month before for his mother’s 101st birthday. Abbott was no stranger to Murdoch and had worked for him as junior employee, writing editorials for
The Australian
25 years earlier. The new leader, like many before him, had dinner with Murdoch, where he gave the media mogul a full rundown on the scheme – supplying enough detail for Murdoch to later have his Australian-based editors briefed on Abbott’s plan, which he considered a visionary approach to dealing with a real problem in his workforce. They were encouraged to support it, notwithstanding that it represented a tax impost and was skewed to be of most benefit to parents outside their middle-Australian readership.

This fact was unknown to members in the Party room, who condemned Abbott’s solo policy-making on such a fundamental issue. In fairness to Abbott, he had alerted Joe to the plan, but Joe recalls the subject as a brief add-on in a telephone conversation, with no specific date or details attached. Abbott’s recollection is of a slightly more involved conversation. ‘Joe was one of the very few colleagues whom I discussed the paid parental leave proposal with … I don’t want to verbal Joe but he certainly saw the merit in it – that’s not quite the same as saying he enthusiastically supported it,’ Abbott says.

Joe says he didn’t think too much more about it, believing it was an un-costed proposal, not an Opposition policy. At least, that was until Abbott announced it publicly. Soon after, in the wake of Party unrest, Abbott told a joint Party-room meeting that he had made a captain’s call on the policy. ‘Sometimes it’s better to ask forgiveness than permission,’ he said.

Joe was seeking neither forgiveness nor permission when he went to see his leader soon after. He was both irked and offended. Joe had known Abbott was magnanimous in giving him the Treasury portfolio, but it was useless if he was going to ride roughshod over him, and not consult him about details on big-spending policies.

The two met in Abbott’s office in Parliament House. ‘We sort of had a heart to heart,’ Joe says. ‘I said we can’t do this. It’s not the way.’ Joe was working out his relationship with the new leader, where he sat in his advice chain and whether he could comfortably do the job if pegged down the line. ‘We sat down and talked like two old mates,’ Joe said, ‘and it was sorted.’ Out of that meeting came a line both men have uttered many times since – that the pair would not have more than a ‘cigarette paper’ between them on policy, that they would support each other publicly, and leave any stoush for behind closed doors. Joe wanted Abbott to genuinely consult him on anything that had a Budget consequence. Abbott agreed. It wasn’t any Kirribilli agreement, but they would go into the 2010 election as a tight double-act.