Tiberius with a Telephone

by Patrick Mullins

  McMahon went through the areas and problems that he believed confronted the country, linking these with the need for effective leadership. ‘Whichever one of the candidates who is elected will have our unqualified loyalty and support,’ he said. Then, explaining that the coalition between the Liberal and Country parties might be at risk if he put his name forward for the leadership, he told the meeting that he was not standing. ‘I do this with regret — but in what I hope is the best interests of the Government.’ He finished by advising his colleagues to be careful with what they said. Leaks were inevitable, and the impression of division should be avoided.90

  But just as McMahon called for nominations, two MPs raised the question of the deputy leadership. State considerations came into play, in questions of leadership — should the deputy leadership be spilled?

  McMahon said no. There was no vacancy for the deputy leadership. Why should it come up?

  Later, some of his colleagues would marvel at this response. ‘It seemed to me to be quite illogical,’ recalled Gordon Freeth, who believed that the runner-up in the leadership contest should become deputy leader. According to Freeth, it was McMahon’s ‘emotional speech’ that ensured the matter was not pressed: ‘The mob got up to their feet and applauded him for this great sacrifice he’d made.’91 It was, however, understandable for others. Menzies, observing events from retirement, had already surmised that McEwen’s veto and humiliation had given McMahon ‘the aura of martyrdom’, and McMahon took advantage of it.92 ‘That was the best favour McEwen ever did for McMahon,’ said Don Chipp. ‘[It] won him a lot of sympathy.’93 Tom Hughes recalled it similarly: ‘I, probably within my own mind, was rather sympathetic to McMahon. I didn’t know him then as well as I came to know him.’94

  Any move to spill the deputy leadership was averted. McMahon called again for nominations.95 Bury, Snedden, Hasluck, and Gorton all stood to nominate for the leadership. The party voted. As expected, it took two ballots. Bury and Snedden were eliminated on the first, and just after a quarter past three the whip announced that Gorton had triumphed over Hasluck.

  McMahon vacated the chair for the newly elected leader. It took only a few minutes for Gorton to breeze through the remaining items on the agenda. Irwin and Kent Hughes both decided against discussing their resolutions.96 The meeting broke up.

  The images that appeared on the evening television news suggested harmony and unity. Footage of Gorton and McMahon shaking hands with well-wishers in King’s Hall, smiling and happy, of the press conference where they sat side-by-side, would have suggested that all was well. Privately, however, no ballot could resolve the various bargains and deals that had been struck, the wounds inflicted, and the insults hurled around in the twenty-three days that had passed since Holt’s disappearance and death.

  McMahon, while certainly aggrieved, nonetheless had some reason for thanks. He had endured one of the most public humiliations possible in politics. He had kept his position. He was bloodied, yes — but he had survived.

  Writing that night to Menzies to explain and understand his loss in the ballot, Hasluck admitted that McMahon — ‘the little man’ — was a much more formidable figure than he had allowed himself to believe:

  In the outcome I think the result of the party meeting was far more a triumph for McMahon than it was for Gorton … In my limited experience I have never seen anything done with such brilliant cunning and today I think he is in a stronger position than he was the day before Harold died … In a wry sort of way I recognise McMahon now as being a more clever man than I thought he was, although my distrust of him is greater than ever and my contempt for his political methods is profound.97

  The ‘dark forebodings about the future’ that Hasluck went on to note were apt — and would eventually be realised.

  CHAPTER TWENTY-FOUR

  Privilege

  1984

  For someone so well off, McMahon was singularly odd about money. Bowman had been told this when he first started, but as time passed he saw it for himself. At first, it was innocuous. McMahon was tight-fisted. He preferred $50 notes to $10 or $20 notes.1 He juggled bills so that he would not have to pay until the very last moment. He was loath to waste cheques, on the grounds that each one cost him money.2 He seemed forever insecure about his wealth. One week, he told an amused Joyce Cawthorn, ‘I’m not a rich man, you know.’3 A fortnight later, he came into the office boasting that he had recently had the contents of his home valued and that everything was now worth so much more than it was when he had purchased it. There was furniture worth $20,000! There were earrings worth $2,000! Paintings — ‘Some of them horrible,’ Cawthorn said to Bowman — were now worth ten times their original value!4 Then, a few weeks later, he complained about not having enough money to pay his tax bill. At this, Cawthorn sighed: ‘He always exaggerates.’5

  At other times, the preoccupation with money seemed injurious. In mid-April, McMahon’s housekeeper rang the office to say that she had received no pay and no allowance for the supplies she had used at work for the previous few weeks. Cawthorn was staggered. Each week, she told Bowman, she sent $484 to Sonia via McMahon’s driver to pay the housekeeper and gardener. Where had it gone? The housekeeper was apparently scared: she had children at school in the United States, and was afraid of losing her job if she complained.6 Yet, after a few days, she went to her agency to complain. They took it up formally with Cawthorn, who in turn took it to McMahon. ‘He was unaware of whole thing,’ Bowman wrote, after hearing about it from Cawthorn, ‘and seemed thrown off balance to hear that the housekeeper had not been paid.’7 It took a few days to sort out the mess, but eventually five missing pay packets were found in a room filled with junk in McMahon’s house. There was no proper explanation, and it was not enough. On 1 May, Cawthorn told Bowman that the housekeeper was quitting: ‘Not happy.’8

  Money seemed to deepen McMahon’s moods, make him fluttery and frantic, confused and uncertain. In June, the problem of paying staff apparently resurfaced when Cawthorn burst into Bowman’s office again. McMahon had accused her of failing to pay staff at the farm that he and Sonia maintained near Orange. One man had left because of it, McMahon had said. At this, Cawthorn was indignant. It was certainly not her responsibility to pay them, she complained to Bowman. She had nothing to do with it. But then, when she telephoned McMahon’s agent in Orange — an elderly man with emphysema and a rough tongue — he rubbished the story. The farmhand in question had left for an entirely different reason, he told her. Then he went on, with words that were music to Cawthorn’s ears: ‘What have you people done to deserve to work for a miserable old bugger like that?’9

  As the accounts manager, Cawthorn saw how intent McMahon was on getting the most out of his entitlements as a former prime minister. Cawthorn told Bowman how McMahon had gone to the Melbourne Cup and kept a driver waiting all day. When he received the bill, McMahon took it to the ‘top man’, as he called the official in charge of his entitlements, and said, ‘You take care of this.’10 According to Cawthorn, the ‘top man’ did. Sonia and McMahon also put all their mail through the office, Cawthorn said, including the 500 or so Christmas cards they sent out each year. When they were away and had to contact the office, they would call and tell whoever answered to call them back so that the office would bear the brunt of the cost. ‘We can’t do that sort of thing,’ Cawthorn told Bowman.11

  None of McMahon’s former colleagues would have been surprised to hear of any of this. There had been many sniggers and raised eyebrows at the way that McMahon went about ensuring he obtained the full perquisites of office. While a minister, he caused ‘fuss and bother’ to ensure he got a bigger and better office, and he insisted on getting a car more splendid than those used by his colleagues, recalled Paul Hasluck. ‘And, of course, none of us was surprised when, the disciplines of Menzies being removed, at the coming into office of Holt, McMahon made excessive use of VIP aircraft — an abuse of privilege not
fully disclosed in his case in the replies to the parliamentary questions in 1967.’12

  But Hasluck, like others, struck a more serious note when thinking about McMahon and money. He wondered about McMahon’s propriety in office, and suggested that Menzies had doubts about this.13 For himself, Hasluck said that he would ‘doubt his [McMahon’s] basic honesty in money matters, but am confident that he would be most careful and watchful to protect his reputation, so this side of his life was never the cause of political anxiety’.14 There were some, however, who were not so confident. There were rumours of McMahon playing the stock market while he was treasurer and prime minister, of him later betting on movements of the exchange rate, and whispers of him using his position unduly.15 Speaking with the surety that McMahon would never hear it, Malcolm Fraser put this forward most confidently.

  According to Fraser, it had begun when McMahon was treasurer. All the members of cabinet had been offered shares in a resources company, and in a cabinet meeting Gordon Freeth had raised the propriety of taking up the offer. Cabinet came to a decision that ministers would not take up the shares they had been offered. Some years later, Fraser mentioned this to a longtime friend. To Fraser’s astonishment, the friend, who headed a stockbroking firm, knew already. The friend said to Fraser, ‘Well, Malcolm, would you like me to tell you the sequel?’

  The sequel was that one of the ministers who had received an offer went to the firm and said that while he did not think his colleagues would take it up — on grounds that they were strapped for cash — he himself would take it up, as well as all the shares that had been offered to his colleagues.

  Fraser needed only one attempt to guess the identity of that minister. ‘That was the treasurer, wasn’t it?’16

  Many people were sceptical about the suggestion that McMahon might have been corrupt. His inability to keep his mouth closed would have found him out, Alan Ramsey thought. Moreover, all of McMahon’s work and ambition would have been for nothing had he been found out. ‘He wouldn’t have gone anywhere but out on his bloody ear,’ said Ramsey later.17 Would McMahon really have taken that chance? Would he have endangered all those years of work? Whatever the truth of the rumours — and it is notable that none of these were put on the record while McMahon was alive, when he could have responded to them — it was certainly the case that by 1984, as he worked on his book, McMahon was watchful with money, hated to spend it, was furious when he had to, and could be driven to great upset by it.

  On 22 June, McMahon rang the office four times from Melbourne. He was panicked. ‘Hopeless confusion,’ Bowman called it. He wanted to know about his return flight to Sydney, and wanted the office to redirect his calls to the Ansett switchboard so that he would not have to pay. When this was said, all Bowman could picture was McMahon agonising over whether to drop another twenty-cent coin into the payphone.

  When the office got an Ansett operator on the line and told him what was happening, he was incredulous. ‘What? A former prime minister, and he can’t get anyone to lend him a telephone?’18

  CHAPTER TWENTY-FIVE

  The New Man

  1968–1969

  Three days after the leadership ballot, McMahon sent his new prime minister a letter. ‘So that you will be aware of the background of my recent problems with Mr McEwen,’ he wrote, in a rather drastic understatement, ‘… I attach copies of some aide-mémoires and a document of a short history of my difficulties with Mr McEwen.’ There was a lot of material in the package he sent. The ‘history’ ran to thirteen foolscap pages and the aide-mémoires to twenty-five. ‘I think it is essential for you to know everything relevant to this problem,’ McMahon went on, ‘because, doubtless, other rumours will eventually circulate designed to exacerbate the tension between Mr McEwen and myself, and the tensions between the parties.’1

  It was a defensive ploy. McMahon was well aware that with Holt gone, he would need Gorton’s help to counter McEwen’s influence and advocacy on matters of trade, tariff, and economic policy. He knew, too, that Gorton possessed considerable licence as a new prime minister and little liking for him personally. Gorton, recalled Tony Eggleton, who had been retained by the new prime minister, ‘acknowledged McMahon’s seniority and ministerial experience. But,’ Eggleton added, ‘like former leaders, he had reservations.’2 Public support for the Victorian senator was strong, and there were calls for him to use his accession to break with the past. On the day of the ballot, The Australian editorialised that the first task of the new leader should be ‘to make absolutely sure that Mr McMahon is not returned as Treasurer’.3 The calls continued after the ballot, even while McMahon received favour for his decision not to stand. ‘There is a chance for the new Prime Minister to give entirely new shape and direction to some key posts in the Ministry,’ ran one editorial.4

  Gorton did just this following his 24 February election to the House of Representatives as the new member for Higgins. Don Chipp, the minister for the navy, was dropped, as was Peter Howson, whom Gorton blamed for the VIP affair and had little regard for anyway. Chipp took the rebuff with good grace, but Howson felt deeply injured by it. He blamed Gorton for the VIP affair, and thoroughly resented the fact that the man who had embarrassed him so was now the leader of his party and his country’s prime minister. From the backbench, Howson would become a trenchant and hostile critic.

  Gorton filled the resulting two vacancies, and those created by Holt’s death and the retirement of senator Denham Henty, with supporters. Senators Malcolm Scott and Reg Wright became ministers, as did MPs Billy Wentworth and Phillip Lynch.

  Had Gorton been bolder, McMahon might also have been removed from the Treasury.5 On taking office, Gorton had taken care to be briefed on McEwen’s concerns about McMahon’s relationship with Maxwell Newton, to the point that he even consulted the director-general of ASIO, Sir Charles Spry.6 What he heard did not cause Gorton to think better of his treasurer, and he began sounding out the consequences of sacking McMahon. There was support within the party, as Robert Southey, the president of the Victorian Liberal Party, intimated in an April letter. But weighing against this were state-based factors. McMahon still enjoyed support among the New South Wales Liberal Party, Sydney’s business community, and the Packer press. Moreover, to remove McMahon could suggest that Gorton was giving in to the Country Party on economic policy. Gorton pulled back.7 It was better to maintain the still-fragile peace.

  And it was fragile. The events of the summer were not going to be easily forgotten, no matter the number of paeans about unity. The rift with McEwen was still palpable. When Gorton opened a cabinet meeting on 28 February with a speech on proper process, McEwen followed with a spiel on propriety that was wholly directed at McMahon: it was important, McEwen said, to approach cabinet decisions objectively, without any ‘earlier “lining up” of support’. At the same meeting, when tariffs on stoves arose, the two clashed again. McMahon pointed out that the Tariff Board had taken no evidence on solid-fuel stoves, yet had recommended a duty anyway: ‘Surely this should be non-protective.’ As usual, McEwen reiterated that reports from the Tariff Board should be accepted — or what was the point of having the board?8 Moreover, McEwen was quick to reopen old debates: within weeks of Gorton’s taking over, McEwen had spoken with him about the prospects of the Australian Industry Development Corporation.9

  There were other issues to tackle as well. The royal commission into the sinking of HMAS Voyager reported with a complete exoneration of Captain John Robertson. Whether to provide Robertson with compensation, and in what form, was the topic of several cabinet discussions. Reversing his earlier position, McMahon argued that an ex gratia payment was the best option.10 The Tet offensive also brought up Australia’s commitment to the US military efforts in Vietnam. Two months before his death, Holt had overruled objections from McMahon, Hasluck, and Fairhall, and had committed another battalion of troops and a squadron of Centurion tanks to the conflict. With Australia’s contribut
ion now at some 8,000 soldiers, Holt wrote to the US to advise that Australia had reached the ‘full stretch of our present and planned military capacity’.11

  Now, at Gorton’s suggestion that Australia’s commitment left little space for further contributions, McMahon noted that during his talks with Johnson, the president had said Australia would not be asked to contribute more unless it was able to meet the request. Moreover, mindful that public opinion was turning — he was telephoning ‘a hell of a lot,’ said pollster Roy Morgan12 — McMahon was critical of the conflict. His longstanding reservations returned. He did not believe that South Vietnam was ‘pulling its weight’, and he urged caution. The government needed a ‘reappraisal’ of everything raised so far. It needed more knowledge of the US strategy in Vietnam, and to understand better the domestic and economic strain that the Vietnam commitment was imposing.13

  Less than a week after that meeting, something of that economic effect was felt when the turmoil that had forced Britain to devalue sterling caused a run on gold and the failure of the London Gold Pool, which had helped balance demand since 1961.14 McMahon led the cabinet discussion on the US proposal for a two-tiered market to govern gold sales — the first, in effect, for governments and central banking purposes, where gold prices would be fixed at $35 per ounce; the second, where the price would float, for speculators and industrialists — though he acknowledged that it was an interim measure only.15 Not even two weeks after that came Lyndon Johnson’s surprise decision to forego seeking a second presidential term and to immediately halt the bombing campaign in North Vietnam. This news, announced before the government was informed, prompted another scramble in the cabinet.16