The Killing Season Uncut (8 page)

Rudd's performance on the second day was different to the first. He had recorded the first day's interview on a mobile phone and, I guessed, listened to it overnight. When we resumed, his delivery was different, answering as if in a press conference, creating unnatural sound bites. I tried to lead him back into a conversation but it didn't work. By the end of the day I thought we had little good material and we'd used up a lot of time.

After dinner Deb Masters and I walked back to our hotel through the gas-lit cobbled streets of Boston's Beacon Hill. Like Washington, where I used to live, the residents keep their shutters open, allowing passers-by a glimpse into the heart of the house. As we crossed Louisburg Square, Secretary of State John Kerry emerged from his front door and stepped into a black SUV. A convoy of black cars pulled in behind him, the flashing lights and sirens momentarily distracting me.

Back in my drab hotel room, I watched the interview on my computer. I paused it after ten minutes, leaving Rudd's face frozen in close-up, and sat on my bed staring at his image. We were supposed to be telling a drama and this dialogue felt like a civics class. Deb Masters came in and said, ‘It's not as bad as you think'.

‘Don't cheer me up', I half-shouted, unreasonably. ‘It's awful.'

Later, I rang my husband Tony Jones back in Australia: ‘I'm not getting anywhere. What am I doing wrong?' He laughed and said it was like a scene from
Frost/Nixon
, the 2008 movie about the interviews British journalist David Frost conducted with Richard Nixon three years after the US President had left the White House. Part way through the interviews, an anxious Frost calls his producer because they are going badly: Nixon is easily getting the better of him.

‘Just go for it', Tony said. ‘You don't need to be so cautious. He's not going to walk out now.' I'm no Frost and Rudd is no Nixon, but the simple suggestion made sense. Having come this far and knowing that Gillard had agreed to an interview, the risk of Rudd pulling out was very low.

In the morning I pulled on my tight purple jacket for the third time. It's not easy to find clothes that can hold continuity over three days without washing, the days ended too late for dry-cleaning, and I couldn't wash heavy winter clothes in a hotel sink. Perhaps a better-prepared interviewer would have packed three identical jackets. An international rowing regatta was taking place in Cambridge that weekend and the banks of the Charles River were busy with trailers unloading boats. Driving to the studio, I watched the crews on the water, gliding under the bridges, and hoped for a better encounter with Rudd.

Rudd arrived late to the studio with non-matching suit trousers. He had fallen over and torn his suit pants, so no shots below the waist. He seemed more relaxed.

 

The first topic on that last day was a sensitive one for Rudd: the second stimulus package announced by the government in February 2009. When they announced the details of the first stimulus, the government was already contemplating the next instalment.

In January, Rudd delivered a series of speeches in cities around the country to mark Australia Day. Ministers and officials followed him. Finance Minister Lindsay Tanner was part of the travelling caravan.

We had to put together the stimulus package while this was happening … I can remember grizzling to myself, ‘God, if this is January, imagine what the rest of the year's going to look like!' I had days when I was on four flights and I'm sure there are some of my colleagues who probably could have topped that.

Treasury secretary Ken Henry understood the Prime Minister's caution about the implications for the Budget.

At some point it became clear to him that the actions he was going to take were going to push the Budget into deficit … I know this was a big issue for the Prime Minister and the Treasurer. This was going to be a legacy issue, no question about it.

On Tuesday 3 February 2009, the government announced its $42 billion Nation Building and Jobs Plan, a mixture of longer-term investment in infrastructure and short-term payments to keep cash circulating through the economy. Ken Henry remembered learning the final figure.

I wasn't in the room for the final decisions but I was being kept informed. When one of my deputies phoned me to tell me how big it was, I did express some surprise at the size of it. But having said that, whilst I was surprised, I didn't consider it inappropriate. Nobody will ever know whether it was the right amount or whether a larger amount would have given Australia an even better unemployment outcome. Or whether we could have achieved satisfactory economic outcomes with a smaller package.

The day after the government unveiled the measures, Malcolm Turnbull told Parliament the opposition would vote against the package. The opposition didn't reject the idea of a stimulus, he said, but $42 billion was ‘more than is appropriate right now'.

US Treasury secretary Hank Paulson discussed stimulus measures with Rudd. Paulson was diplomatic about whether the Australian stimulus was justified.

Well, of course, of course. Now you can never prove a contrafactual, okay? You can never say if we hadn't of done this the economy would have turned down. But let me tell you, I think one thing that we all learnt in the financial crisis is you don't want to play with financial fire. You don't want to take a
risk. I think knowing what I know of the financial system in Australia, he [Rudd] made the right decision, and no-one will ever know with certainty but I don't think anyone in Australia would have liked to have lived with the consequences if he had said, ‘Well, I think maybe we won't need it', and then he'd been wrong.

In June 2009, Australia's quarterly economic figures were released. In a small archive miracle, Ken Henry was being filmed, seated next to Communications Minister Stephen Conroy in a Senate Estimates hearing, when a note was passed to him containing the figures. Henry showed the note to Conroy, who looked incredulous and then began to smile. In the March quarter, in the midst of the worst global economic downturn since the Great Depression, the Australian economy grew by 0.4 per cent. The nation had avoided recession.

Staffers told us there was shouting, whooping, high-fiving and general pandemonium in the offices and corridors of Parliament House. Rudd described the moment.

We got the growth numbers and it was a genuine whacko moment, which is, ‘We've managed to do it'. And I've got to say, most of our Treasury team did not think we could, but we just got across the line.

Ken Henry reminded us that while Australia hadn't technically fallen into recession, there were consequences across the economy. More than 200 000 people lost their jobs, despite the government's efforts.

 

The arrival of winter in 2009 was a turning point for Episode 1, marked by new Opposition Leader Malcolm Turnbull walking
across the icy forecourt of Parliament House, crows silhouetted above him against a grey sky. Crows became
The Killing Season
's totem: jet black and sinister, their cries punctuate the series' soundtrack.

With the government heading towards the long winter break, Thursday 4 June was a busy day in Parliament: debate continued on the first tranche of the Carbon Pollution Reduction Scheme legislation; in Question Time, Parliament acknowledged the twentieth anniversary of the Tiananmen Square uprising; the Prime Minister informed the chamber that Joel Fitzgibbon had tendered his resignation as Defence Minister; and the Leader of the Opposition asked the Prime Minister and the Treasurer whether they, or anyone in their offices, had tried to help a car dealer named John Grant.

Earlier that day, before a Senate committee, a Treasury official who managed OzCar—a special-purpose fund set up during the financial crisis to help struggling car dealers—was answering questions from Liberal Senator Eric Abetz. The official, Godwin Grech, said he had received ‘representations' about car dealerships from the Prime Minister and Treasurer's offices. Pushed for detail, Grech confirmed the approaches from the PM's office were about one dealership, and they came ‘mostly' by email.

Ken Henry had mentored Godwin Grech.

This guy was so well known in the department. A quirky character. A fun person to have around, believe it or not.

The car dealer Grech referred to, John Grant, was an acquaintance of Kevin Rudd's who had once given Rudd a second-hand ute which he used in his electorate. The donation had been declared. When Turnbull first raised the issue in Question Time, Rudd was puzzled.

I just scratched my head and turned around to Treasurer Swan and said, ‘What the hell's all that about? I have no idea'.

Andrew Charlton was sitting in the adviser's box in the chamber.

Suddenly I noticed that a number of the Coalition frontbenchers were staring at me quite intently, and then Malcolm Turnbull asked the Prime Minister whether he had corruptly acted to give a favour to his friend, John Grant. I sent down a piece of paper to the Prime Minister at the dispatch box that said, ‘I've checked with the office. No-one has provided any special favours to Mr Grant'. And the Prime Minister said that in Parliament.

The ‘Utegate' saga unfolded over the next two weeks. Press secretary Lachlan Harris watched Turnbull's fevered pursuit of Rudd and Swan.

I can remember watching Turnbull go after [Rudd and Swan]. Really, he obviously thought he smelt blood. There's a great expression in rugby league, white line fever, and there was a man that had white line fever. He saw the tryline but he didn't see the defending tacklers coming his way and he paid a very high price for that.

Unknown to members of the government, Grech was a Liberal Party mole who'd convinced Turnbull and Abetz that he had evidence that Rudd's office had sought special assistance for Grant. He claimed the proof was an email from Andrew Charlton.

Grech put in a second appearance before the Senate committee. Urged on by Abetz, the best that he could offer was his recollection of a ‘short email' from the Prime Minister's office, alerting him to Grant's case.

As Grech gave his testimony, government staffers, including Charlton, were watching in their parliamentary offices.

I think I was having some morning tea and he said ‘Andrew Charlton' and I think I might have spat that morning tea on the ground. It was a shock.

Turnbull called a press conference and said Grech's evidence was ‘extraordinary'. He demanded Rudd and Swan justify their actions or resign.

Ken Henry was in a tax conference when Grech was giving evidence. He saw it on the evening news.

At the end of it I turned the television off and my wife said to me, ‘Do you trust Godwin?' The next morning I called the head of Treasury's corporate area and I said, ‘I want our IT security people to go through every email of Godwin's and whatever else' … By Sunday morning I felt I had to call the commissioner of the Australian Federal Police.

The email from Andrew Charlton was quickly exposed as a fake; so too was Grech.

When I referred to the Grech affair as a small thing in my interview with Ken Henry, he shot back a reply.

KH: This was not a small thing. No. Learning that one of my staff had behaved inappropriately in providing information to the Leader of the Opposition, over an extended period of time and in some detail, this was not a small thing for the Treasury. I was gutted by it. And this was an official that from time to time I had mentored. So this had real personal impact. I did feel personally betrayed.

…

SF: Do you reproach the Leader of the Opposition for accepting those leaks?

KH: Me? Reproach?

SF: Yes.

KH: I was very disappointed. Surprised and disappointed. I was then and I continue to be.

The question for
The Killing Season
wasn't about Turnbull but how the Grech incident affected Kevin Rudd's prime ministership. Rudd's popularity stretched into polling territory previously occupied only by Bob Hawke: as preferred prime minister, he led Turnbull by 65 points to 18. Turnbull had called Rudd's integrity into question and failed, spectacularly. But more importantly, Turnbull's misjudgement weakened him, making him vulnerable within the Coalition, until he lost the leadership—at the most inopportune time for Labor.

Surprisingly, Andrew Charlton said the weakened opposition harmed the government instead of helping it.

And so there was a period where the government really didn't face an effective opposition and that is always very risky for a government … When the opposition isn't fulfilling its function, it makes it difficult for the government to continue to be as focused and relevant on domestic issues.

Rudd himself was fortified by Turnbull's demise but denied he took any pleasure in it.

I have no particular taste for the personal brutalisation of politics, none whatsoever. Others do. They kind of enjoy the blood sport. I'm repulsed by it.

 

In Boston, we progressed well through the interview session on that last morning, until Rudd suddenly announced he would be cutting short the afternoon session because he was flying to Saudi Arabia and needed to pack. Those hours were precious to us. I knew there was no point returning after the break; Rudd would be too distracted. We got a commitment from him that we would have extra time in Australia before Christmas. Deb Masters took Rudd's jacket and tie for safekeeping.

Rudd pointed at the local sound recordist and suggested Shane drive him to his hotel. Shane didn't have much choice. When he returned to the studio later to help break down the set, he said the fifteen-minute drive to Cambridge was the most frightening journey of his life: ‘I've never driven a prime minister before. What if I had crashed?'

They were discussions about how we work with Kevin. None of them were leadership discussions about replacing Kevin, none of them.