Penny Wong

by Simons, Margaret;

  She thinks it a failure of cabinet that the problems with Rudd were not managed. Frank conversations should have been had with the prime minister about what needed to change, and about his deputy’s ambitions and the need to restrain them. Those conversations never happened. ‘I carry my share of the blame for that,’ she says. Butler, though, excuses her. Her position as the ‘senior junior’ meant that it was not her place to have those discussions. Rather, it should have been Gillard herself, Swan and the other senior ministers.

  Rudd claims in his memoir that Gillard ‘despised’ Wong. He writes, ‘From Julia’s perspective, “Wong”, as she routinely referred to her, was an “inner-city leftie” who just didn’t understand the real world.’38 Gillard, in her memoir, describes herself as ‘among Penny Wong’s supporters’ and an admirer of her ‘abilities and cool head’.39

  Wong herself regards her relationship with both Rudd and Gillard at that time as mainly good. Gillard was not a friend but, despite their disagreements over the CPRS and the difficulties that caused, their relationship was ‘professional and courteous’. If Gillard despised her, she never saw any signs of it.

  But she agrees with Anthony Albanese that the leadership change of June 2010 ‘destroyed two Labor prime ministers’. Rudd had his problems, but his policy analysis was ‘brilliant’. Gillard should have been a ‘great prime minister, she should have won another election and gone on after that. She is one of the best politicians I know.’ But the manner of her ascension to the prime ministership destroyed her credibility and propelled her to the position before she was ready for it.

  On the evening of 23 June, after the challenge became breaking news on the ABC, Mark Butler and Penny Wong were besieged in their parliamentary offices. All the ordinary rules about where television cameras were allowed to go in Parliament House were disregarded as the press gallery tried to make up for having been ambushed by the imminent challenge. There were cameras stationed at the end of the corridor in the ministerial wing.

  Nobody got much sleep that night. Butler and Wong spent a lot of the time together. Albanese came in and out, also spending time with Rudd. He and Butler worked the phones for the embattled incumbent, trying to bring numbers his way. None of them – Butler, Wong and Albanese – thought the move to depose Rudd was a good idea.

  Sometime late at night, Butler and Albanese raised their eyes from the telephones. It was clear that Gillard had the numbers. They were powerless. They could not stop what was going to happen.

  Butler and Wong conferred. Wong says now, ‘We realised this was happening. It was a crock for the party. So what do we do, how do we best deal with this?’ Butler remembers that they talked about whether a statement in support of Rudd would make a difference, and concluded it was too late. ‘We moved on to talk about how the next several hours would unfold, and what we could do to minimise the damage to the party. And we thought that making the switch to Julia, making it clear that it was a decisive switch, was probably the right thing to do.’

  As the sun rose on a new day, Butler contacted the other members of the South Australian Left in caucus to tell them his thinking. The South Australian Left would vote for Julia Gillard.

  Rudd records that at about this time Albanese visited him in his office and told him, ‘You’re fucked. And I don’t think you should run.’40

  There was no vote. Tears streaming down his face, Kevin Rudd announced at the party meeting on 24 June that he would not put Labor through the trauma of a caucus ballot, and resigned as leader in favour of Julia Gillard.

  Four days later, Gillard announced her new cabinet. Penny Wong retained her portfolios of water and climate change. The day after that, Wong was on a plane bound for Rome. The Major Economies Forum on Energy and Climate – held in the Abruzzi regional centre of L’Aquila, which had been struck by a deadly earthquake only three months earlier – brought together the relevant ministers from the United States, China, India, Europe and Brazil to advance the agenda on international action ahead of the UN Climate Change Conference in Mexico that November.

  Meanwhile, Julia Gillard announced that a price on carbon was one of her priorities, but that there needed to be community consensus to achieve it, and this might take years. She announced a citizens’ assembly to discuss the issue and was ridiculed in the media for the apparent lack of political will and leadership that implied. Penny Wong held the line, echoing her leader’s words. The Liberal Party and the Greens were to blame for the defeat of the CPRS, she said. She dodged and weaved, backing the prime minister as best she could.

  Julia Gillard called the election for 21 August 2010. The result, after a difficult campaign beset by damaging leaks usually seen as coming from Rudd, was a hung parliament – the first in seventy years. During the seventeen days it took for Gillard to strike a deal with the Greens and the independents, Penny Wong suddenly had time on her hands. Gillard recalls ringing her one morning and discovering that she was roasting spices – ‘making a complex meal from scratch to release her energies and fill in the time’.41

  The deal was done when independents Tony Windsor and Rob Oakeshott declared for the Gillard government. In the new ministry, Penny Wong was to be the minister for finance. Greg Combet was to replace her in the climate change portfolio. It was rumoured that Penny Wong lost the portfolio at the request of the Greens. Sarah Hanson-Young told the media that the minority government would mark a ‘new era’ and that the minister for climate change needed to be ‘more consultative and a better communicator’ than the ‘abrasive and dismissive’ Penny Wong.42 Other reports said that although Wong had been one of Labor’s most promising parliamentarians she had failed to ‘cut through’ in the climate change portfolio.43

  Wong says she asked for the change of job and recommended Combet as her replacement. Partly this was because she wanted to try something new, especially after such a difficult two and a half years in the portfolio. Partly it was because if action on climate change was to advance under the minority government, ‘[We] had to have ostensibly a fresh start. The Greens had to have a different face, and I didn’t think I would be the right person.’

  Greg Combet, Julia Gillard and Christine Milne went on to cut a deal that allowed for the introduction of an ETS with a fixed price on 1 July 2012. The negotiations were gruelling, affecting Combet’s already failing health. At every stage, Combet thought the most likely outcome was that the Greens would walk from the negotiations. Milne agrees that almost happened.44 Nevertheless, Combet developed a ‘constructive and friendly working relationship’ with her.45

  Milne says today that she still believes the amount of assistance given to industry in the deal she brokered with Combet was far too high. The Greens agreed to it reluctantly, to get legislation through. As for the emissions reduction targets, on which they could not agree, the issue was defused by concurrence on setting up a Climate Change Authority of independent experts who would recommend the future target and therefore the cap when the scheme moved from a fixed price to one set by the market. In other words, a mechanism was agreed to put off the difficult issue of targets – and on industry assistance the Greens crumbled, bargaining in return for the establishment of a Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA).

  Wong, meanwhile, says today that the policy negotiated between the Greens and Combet was basically the same as the one she and Rudd had tried to get through the parliament, but this second scheme included more compensation delivered faster to the energy sector. The other main differences were the CEFC and ARENA, and some of the assistance for industry was brought forward.

  All of which raises the question of whether it might have been possible to cut a deal with the Greens in 2008, when Rudd and Wong first attempted to introduce the CPRS. Could a different negotiator have achieved this outcome earlier?

  The Greens have copped a lot of flak from the Labor Party for voting with the Coalition to defeat the CPRS in 2009. Butler, for example, describes it
as ‘inexplicable … an appalling tactical decision’ and says Milne is ‘hopelessly inaccurate’ when she claims the Gillard scheme was better. He suggests that the Greens simply realised their error and chose not to repeat it a second time around.46

  Garnaut believes it ‘might have been better’ if Wong and Rudd had at least talked to the Greens, setting up a second option if agreement with the Coalition could not be struck. Other observers suggest that had talks been held with the Greens, it might have been possible to play them and the Coalition’s negotiators off against each other, increasing the pressure on the opposition to cut a deal acceptable to business.

  Penny Wong does not agree. In her view, the Greens of ten years ago were incapable of compromise, and it was only ‘when reality hit’ Christine Milne in Copenhagen that their attitude changed. ‘Then they copped it. They copped precisely the same scheme with a bit of money thrown at renewables, which was fine and I supported that. But the fundamental problem is the Greens have a kind of shallow view about the economy and economic players. They just dismiss any proposition that is about economic transition as being somehow about giving money to the big polluters. There is no kind of reality about what a transformation of this kind of scale means for industry.’

  Labor faithful scorn the Greens, seeing them as stealing votes on the left. In kind, many Greens despise Labor. Christine Milne says that Labor had come to love power for its own sake. She describes Wong as a machine party politician, prepared to make any compromise to advance her career. When Wong talks about the Greens, there is a noticeable tone of contempt that goes beyond party positions. The Greens offend her foundational commitment to political life – the need to exercise the discipline, hard work, compromise and responsibility that go with being ‘in the room’ in a party that aspires to form government. In the view of many Labor people, including Wong, the Greens were cynically pursuing their own electoral advantage in 2009 – needing to appear on higher moral ground than Labor to maintain their hold on the left-wing vote.

  Combet agrees that negotiating with the Greens would have been impossible in 2009. In his memoir, he notes:

  This still makes me furious … How different would Australian climate-change policy have been if the Greens had acted responsibly in 2009? A carbon price would have been entrenched as a lasting reform … The Greens’ answer to this charge is that Rudd preferred to negotiate with Turnbull, not them. That’s true. But Labor had little alternative given the economic foolishness and the uncompromising nature of the Greens’ position in 2009.47

  Gillard, too, criticises Rudd for not engaging with the Greens in 2009 but, in one of her few concessions to him, says, ‘The Greens would have voted the same way no matter what Kevin did. They wanted to look purer than Labor in the eyes of environmentally aware voters.’48

  Could Penny Wong and Kevin Rudd have struck a deal with the Greens, either in 2009 or in early 2010? It is, as Penny Wong is fond of saying, a counterfactual. And those, she believes, are self-indulgent when entertained in retrospect.

  *

  What would Penny Wong do differently, if she had her time again and the benefit of hindsight?

  The turning points, she says, were the decision not to make the Senate sit in November 2009 until the legislation was through, and the failure to call a double dissolution election. She concedes that setting a 25 per cent target, conditional on international action, might have been smarter in the first draft of the scheme. It would have made no difference in implementation, given the failure of Copenhagen, but would have blunted the environmentalists’ attacks.

  She agrees that communications with the public about the progress towards the CPRS were poor, and that public support for action on climate change was allowed to wither away. ‘I could have communicated better … I think that I had too much work – such a heavy load of policy work. It was very hard to find headspace for communications strategy … I didn’t make mistakes with the media the way others did, but I wasn’t particularly retail.’

  Ideally, such a communications strategy would have been a whole-of-cabinet effort, in which all ministers, including ‘some of our better retail politicians’, would have been engaged. But she lacked the seniority to impose that. And ‘Rudd had too much on. We needed Swan and Gillard to be more frontline.’ But by the end of 2009, they were her main opponents on climate-change action within the cabinet.

  It has been suggested by some that in retrospect it would have been better to move very quickly after the 2007 election, while public support was high, the policy at least theoretically bipartisan and business primed for change. Perhaps, the critics suggest, a narrower scheme embracing fewer industries, based on Howard’s nascent moves, should have been introduced, then improved over time.49 Wong disagrees. ‘I have a lot of faults, but I can work through policy detail and formulation pretty bloody fast, and we could not have moved faster while making sure that we weren’t going to tank the economy or have unintended consequences. I don’t think we did anything wrong at all in terms of the policy development and I don’t believe we could have done it any faster.’

  The emissions reduction scheme introduced by the Gillard minority government became the focus of Tony Abbott’s attacks. It was persuasively dubbed a ‘great big new tax’. Gillard, in what she admits was one of her largest political errors, aided the attack by agreeing that the scheme could be described as a tax – making it possible for her to be accused of breaking an earlier commitment not to introduce one. Abbott declared the 2013 election would be a referendum on the ‘carbon tax’.50 After his victory, Abbott moved to repeal the ETS as one of his first actions in government. Labor and the crossbenchers blocked the legislation in the Senate, but when the new Senate sat in July 2014, it passed.

  Meanwhile, Penny Wong had emerged from the leadership coup with the respect of all sides. She was no longer a ‘junior senior’ but unquestionably at the centre of Labor’s leadership team.

  Mark Butler remarks that one of the things that earned her respect was the way she dealt with the April 2010 decision to dump the CPRS. A different kind of politician, he says, would have resigned, or grown bitter and begun to leak. She did neither. She plugged on, doing her best to maintain the appearance of unity. In Christine Milne’s eyes, this is evidence of her ambition. In the eyes of Penny Wong’s colleagues, it is evidence of her principle, her decency, her commitment to the party and her cool head. She stayed in the room.

  But that was behind the scenes. In public, Wong was attacked for being stilted in her communications and blamed for the failure of the policy.51 Paul Keating’s former speechwriter Don Watson, promoting his book on plain English, claimed her ‘dead language’ and management speak were so bad he couldn’t bear to listen to her.52

  In the maelstrom of April 2009, with despair about international action, panic in the party about the political cost, and Kevin Rudd losing his touch, Penny Wong was the only person advising the prime minister to hold fast to the policy and push on, the only one to warn him that dropping the CPRS would be disastrous. History shows it was extraordinarily good political judgement.

  11

  A WOMAN OF GOVERNMENT

  Penny Wong rose to speak four days after her forty-second birthday and a little under three months after a bruising 2010 election outcome that resulted in Labor under Julia Gillard forming a minority government. Wong’s first grey hairs were becoming apparent.

  She had been invited to deliver the annual John Button Memorial Lecture, an opportunity to make a statement of purpose and lay out a vision. Her words that day were not only a public intervention but also, most likely, a bit of self-talk – a salve for her wounds and a reminder of what she believed. They were a justification for the political compromises she had made, and a recommitment to carrying on.

  It is also possible to read her speech as an answer to the accusations from Christine Milne and others on the left that she was nothing more than a machine politician, consistently prepared to compromise principle for the
sake of power.

  Her theme was the discipline imposed by being a member of a party that sought to form government. Underlying the speech were familiar parts of her longstanding intellectual architecture. Although it is not explicitly stated, there is the commitment to ‘staying in the room’ and to seeking compromise in the pursuit of progress. Also implicit is the commitment to praxis – practical political action in the quest for change.

  To this she added a third term, which today is among those her staff refer to as ‘Wongisms’: frequently used phrases, verbal tics. It is the word ‘counterfactual’.

  Penny Wong may well say counterfactuals in retrospect are self-indulgent, but when she looks forward, she takes a more positive view. Talking to her staff as they try to navigate their way around a difficult political problem, she encourages them to use the concept as an analytical tool. Before deciding on a course of action, she will say, ‘Consider the counterfactual.’ What would happen if the other course were chosen?

  It was this kind of thinking that had enabled her to respond to Karl Bitar’s polling figures showing the CPRS was a liability with the comment, ‘Has anyone polled how bad it would be if the prime minister stands for nothing?’ and to see clearly, in the awful pressure and panic of April 2009, what the impact on the government of dropping the CPRS would be.

  In the John Button speech, she imagined the counterfactual of an Australian Labor Party not dedicated to forming government, with all the persuasion and compromise that involved. The Labor values were summed up as ‘A fair go. A just society. A strong economy.’ She referred to the trend of which she was both advocate and personification – the broadening of Labor’s understanding of social equity from male white workers to something more inclusive. It was an ongoing project, she said. ‘A fair go in 1960 would look less so today. A just society today, I hope, would look more inclusive than one in 1960.’