Tiberius with a Telephone

by Patrick Mullins

  Clearly aware that the government could fall should the motion succeed, McEwen approached Howson and Fairbairn with a draft amendment to Patterson’s motion, seeking their support in order to ensure that the overall censure was defeated. Howson insisted that there be an understanding that the offshore legislation be delayed until the next parliamentary session. McEwen took it to Gorton, and Howson began negotiating with his colleagues to ensure they would support it. State politicians rang in to lobby and pressure both sides. In New South Wales, the general secretary of the Liberal Party, John Carrick, ‘put the bite’ on New South Wales Liberals not to vote against Gorton.37 In the House, some saw the opportunity for amusement. Jim Killen, the minister for the navy, passed Whitlam a note. ‘It’s going to be alright,’ the note said. ‘McMahon is on his way back from Djakarta.’ Whitlam’s reponse was pointed: ‘Is that so? I understood he was going to join Sihanouk.’38

  By five o’clock, having gone back and forth on a draft that would satisfy Howson and his rebels, McEwen managed to extract an agreement with Gorton on a draft amendment. Gorton had reason to be satisfied. He had stood his ground, accepting only the most inconsequential of amendments. He had forced the malcontents to expose themselves, and they were found wanting. He had won. The rebellion faded, faltered. And when word of that leaked, the heat went out of the whole debate. Howson introduced the agreed upon amendment, toothless as it was. Labor quarrelled with the Speaker over a ruling. With the exception of Fairbairn, who abstained from the vote, the dissenters fell into line to support the government. The motion failed. It was over.

  That evening, Gorton was scathing about the rebels and buoyed by his victory. To Hasluck’s guarded queries about the day’s events, the prime minister grinned and suggested it all was ‘perhaps just as well’ — an assessment that staggered Hasluck.39 When Hasluck mentioned the possibility that the rebels might, by pairing with Labor, force the government to defer the offshore legislation for six months, Gorton was adamant that he would do no such thing. ‘I’ll take them to an election! It would be the best thing.’40

  The day’s events had not prompted any new caution in Gorton. But it had revealed how deep the antipathy to his policies ran, how much the party festered with tension and dislike. McMahon was on the phone, eager for news from all and sundry, and old enemies were in the mood to take up their own arms. Fred Osborne, president of the state Liberal Party in New South Wales, rang Howson to accuse him of disloyalty. Howson gave no quarter and dismissed Osborne entirely. It was all due to the way that McMahon beat Osborne back in 1951, he decided.41 The possibility that Osborne might not still be nursing this grudge did not appear to have occurred to Howson; nor did the possibility that Osborne might have good reasons for supporting Gorton over the minister for external affairs.

  When McMahon surveyed the political landscape after his return from Djakarta, he was delighted. Howson’s actions had been ‘useful’, he said over the phone. Gorton’s mood since had been murderous. The party was febrile, much more divided than it had been in the leadership challenge only six months before. What a week it had been.42

  ‘OF course, there was persistent tension in the cabinet,’ said Tom Hughes, later.43 Serving as attorney-general — the pinnacle of political life for a practising lawyer, as he was — Hughes was well-positioned to observe how that tension and division cut across the government, and how often it centred on McMahon.

  For there was the obvious enmity with Gorton. Mutual, personal, and professional, that enmity had not changed in the time since McMahon moved to external affairs. Gorton did not respect McMahon’s handling of the new portfolio44 and still distrusted his propensity to leak, which prompted him to avoid passing on his correspondence with Nixon to McMahon or the Department of External Affairs.45 The prime minister thought McMahon bent on treachery and disloyalty. ‘All the little bastard is interested in is promoting himself,’ Gorton had declared within earshot of journalists, while visiting Tokyo that April.46 McMahon, in turn, disliked Gorton. He was still angry about his move to the external affairs portfolio, seeing it as a ‘dirty move’ to sideline him.47 There was the enmity with McEwen, still deep despite suggestions of a thaw. There were the inter-party suspicions of Anthony and Sinclair. There was the generational divide and dislike of Fraser, Chipp, Killen, and Peacock. But these were not the only causes of discord: there were clear philosophical and ideological differences as well.

  The most notable and important of these was on federal and state government relations and powers. Gorton and his supporters emphasised nationalism, and, perceiving the limits of state-based action, saw the virtues of a strong federal government. Neither Gorton’s nor his supporters’ views about this were new: Menzies and Holt had recognised and presided over the steady accretion of power towards the Commonwealth. But both of Gorton’s predecessors had downplayed it, even as the reliance of state governments on Commonwealth-collected revenue increased. Gorton’s forthrightness, however, inhibited him from following the Menzies and Holt line. In his dealings with the states, Gorton had been blunt. There were no platitudes from him about where the real power lay.

  But such talk was anathema to the state governments that heard it and to the generation of Liberals — generally ‘forty-niners’ — that had entered politics to fight against the perceived socialist powers of the federal government under Labor. That the current federal government was, for now, Liberal-controlled did not weaken their objections to Gorton’s approach. The state governments, with their various powers and influences, were bulwarks against the growth of a centralised, all-controlling, Canberra-based federal government. They were to be strengthened, not denigrated or overpowered. As one anonymous state Liberal party official put it to the British diplomat Martin Reith:

  The Federal Government may come and go; it may be Liberal and a friend one time, it may be Labour [sic] and an enemy the next. We dare not put into the hands of the present Government in Canberra powers that could be used by a Labour Government to bring socialism into the States.48

  Thus, Gorton’s efforts on the offshore legislation exposed fissures that ran through the government and cabinet — and, indeed, through the wider party organisation and membership. By declaring that the Commonwealth possessed powers that were, in large part, assumed to be held by the states, Gorton was forcing his party towards a fundamental reckoning — to choose between the ‘horizon’ he could see, as Don Chipp put it, and the status quo.49

  McMahon hewed to that status quo. In keeping with his long-held beliefs about the necessity for power to be diffused, beliefs that had characterised his election to Parliament in 1949, he did not agree with the continued accrual of power to the federal sphere. In the face of Gorton’s push for this power, his preference was for inaction. Gorton’s allies saw this position as cowardly, political, calculated to avoid controversy. They did not see the philosophical belief underlying McMahon’s position. ‘If there was a choice between action and inaction,’ said Hughes, ‘he [McMahon] was quite often in favour of inaction.’ On the question of offshore legislation, Hughes said, McMahon’s response was ‘to leave it alone’. This never held weight with Gorton or Hughes.

  ‘I believed that the prime task of an attorney-general — I’m talking about myself, as attorney-general — was to explore the limits of Commonwealth power and act within them as established,’ said Hughes later. ‘Hence, I was entirely in favour of having the High Court determine who owned the territorial sea — [the] Commonwealth or the states?’ McMahon’s willingness to avoid that determination was simply untenable. ‘One had to know who owned the area,’ said Hughes. ‘… It had to be settled.’50

  Nonetheless, the events of May had left the party’s divisions exposed. In June, the Liberal Party’s federal council met to discuss a timely internal party report on federalism. Gorton, reckoning with the anger of delegates from Victoria and Western Australia, had to defend his trespasses.51 ‘We need a large and continuing infus
ion of capital from overseas to sustain our growth,’ Gorton said, on the AIDC. ‘If this is a departure from Liberal principles, a foray into socialism, [then] so is the TAA [Trans Australia Airlines], the Commonwealth Trading Bank, the Australian National Line, and a myriad of other ventures.’ The offshore legislation, meanwhile, ‘is intended to discover who has the legal responsibility for control of the seas around Australia, who has the legal right to control areas which are at present in dispute.’52 The defences were of little use. What Killen later called an ‘inexorable gathering of political forces’ had been unleashed.53

  McMahon, observing it all as the deputy leader of the federal parliamentary party, could not have failed to perceive the deep disharmony. It would have been a hint of Gorton’s increasingly precarious footing; moreover, for a man as familiar with the Liberal Party as McMahon, it would have been easy to perceive the ways that disharmony could be used to his advantage.54

  Through his time working with the Policy Research Group and his involvement with the New South Wales party organisation, McMahon possessed an intimate knowledge of the federal Liberal Party machine. From his years as a minister, where he had travelled broadly to campaign for colleagues, he had developed contacts and links that went across the nation. From his years as deputy leader, he knew his parliamentary colleagues, their weaknesses and strengths. From his years as an MP, he knew what it augured within the party membership. Bruce MacCarthy, still prominent within the Young Liberals in Lowe and Sydney, thought McMahon ‘was someone who actually listened’. McMahon would regularly telephone MacCarthy, and ask him to come to see him in his office in the Commonwealth Bank Building in Martin Place. They would sit — the minister for external affairs and the 20-year-old MacCarthy. And then McMahon would speak. ‘Well, okay, what’s going on?’ he would say. ‘What’s happening? What are people saying out there?’55

  Alongside his attention to the party’s base, its networks, and outposts of power, McMahon was sure to keep tabs on the press. ‘He accorded a high priority to contacts within the media,’ Kim Jones said later. ‘He kept in frequent close touch with Press Gallery journalists and senior editorial staff, sometimes on a daily basis.’ Of course, it went higher than this. ‘He was close to [Sir Frank] Packer,’ Jones recalled. ‘There was no doubt about that.’ The relationship was broad: when McMahon decided he needed a press secretary, he rang Packer for a recommendation. And although Packer had pulled back from outright public opposition to Gorton, Alan Reid was still involved in fomenting unrest.

  As well as giving advice to Howson and Fairbairn, Reid was working on a sequel to The Power Struggle. His still-unnamed book, largely toiled over at night, was to chronicle the path from Gorton’s accession to the rebuke of the 1969 election. Given Reid’s connections and propensity to retail gossip and insider information, it promised to be much in the vein of its predecessor, with revelations that could destabilise the government. Meanwhile, in the pages of Incentive, Newton was hammering at Gorton with a fervour that was both desperate and angry. Still stinging from the raid upon his offices, he ran regular criticism of the government’s handling of the economy and Gorton’s policies. The AIDC was ‘another nail’ in Gorton’s coffin, he wrote in June, and treasurer Bury was lacklustre and ‘passive’ in the face of the problem of inflation.56 This was an attack that McMahon was happy to echo in private, despite entreaties of confidentiality and discretion.57 Speaking with Howson repeatedly throughout July, McMahon talked freely about preparations for the upcoming budget, so much so that when Bury delivered it, late in August, Howson saw no reason to change the judgement he had formed in the weeks beforehand.58

  THROUGHOUT these months, there were issues that rose to prominence, fell away, and swelled again. For the government, the most serious were the continued ructions between Gorton and the state governments, exacerbated now by litigation over the levying of the receipts tax and the pending offshore legislation. For McMahon, there were intermittent questions about the whereabouts of Francis James, the former editor of The Anglican who had stood against him in Lowe in the 1966 election on behalf of the Liberal Reform Group. Rumours were rife that James had been arrested on espionage charges after illegally entering mainland China, and Labor and Liberal MPs pressed McMahon about what he was doing to locate James and bring him home.59 McMahon was also contending with the needles and barbs of Bill Morrison, the new Labor member for St George. A former diplomat with experience in London, Moscow, Washington, Thailand, and Malaysia, Morrison was quick to point out the flaws, inconsistencies, and mistakes of McMahon’s conduct of foreign policy.

  Then there were the global tides. The June election of Edward Heath’s Conservative Party in the United Kingdom, and its decision to retain a token British military presence in the Pacific under the new Five Power Defence Arrangements (with Australia, New Zealand, Malaysia, and Singapore), meant McMahon had simultaneously to welcome the news while making clear that Australia could cope without the British. It was a line he failed to walk convincingly, with some observers remarking of McMahon’s public comments that he was still living in the 1950s.60 Furthermore, even on such important occasions as this, the rivalries of domestic politics were undisguised to international observers.

  ‘Mr Gorton’s isolation from his colleagues was clearly brought out,’ wrote the British high commissioner in Canberra, Sir Charles Johnston, after the British defence secretary, Lord Carrington, visited Australia for talks on the British presence. ‘His Ministers of External Affairs and Defence, Messrs. McMahon and Fraser, although inclined to be jealous and suspicious of each other, were united in the way in which they spoke about him — or rather did not speak about him.’ Both men reassured Carrington that any attempt by Gorton to make troops unavailable for use in East Malaysia would be prevented, and urged the British to hold the next Five Power conference anywhere but in Canberra, where Gorton would have to chair sessions. Their reason, they said, was that Gorton had been needlessly provocative by speaking of ‘Malaya’ at the previous year’s conference in Canberra.61

  When not speaking ill of their prime minister, McMahon and Fraser did ensure that the new Five Power Defence Arrangements were realistic and useful. They successfully pressed for inclusion of ‘externally promoted subversion and insurgency’ among the causes that would activate the agreement for the countries to consult. As McMahon put it, ‘if insurgency were not covered … the commitment would be virtually useless in military terms since insurgency was the only real threat.’62

  Cambodia continued to occupy much of McMahon’s time.63 Early in July, as fighting in the country continued, McMahon travelled to Saigon to attend the SEATO (Southeast Asia Treaty Organization) conference of foreign ministers, which was set to discuss the crisis. Defending the organisation from charges that it was obsolete and unable to deal with the instability resulting from the upheaval in Cambodia, McMahon attracted both plaudits and ridicule for suggesting that SEATO’s worth rested on the promises of a renewed British presence, the American assurance it would honour its treaty obligations, Thailand’s readiness to consider intervening in Cambodia, and the ‘spirit of goodwill at the meeting’.64 Another result of his efforts was the increase in foreign aid to Cambodia. In September, he announced that Cambodia would receive $2m in aid for 1970–71, to be made up of arms, transport, and communications equipment. The purpose of the additional aid was clear: to help Cambodia survive the onslaught and fighting.65

  This was one part of a bigger victory, but it came laced with its own troubles. After pressing Gorton to increase foreign aid to South Vietnam,66 McMahon managed to obtain a substantial increase in the overall foreign-aid appropriation in the 1970–71 budget: the $126m set aside for Papua New Guinea represented a 9.8 per cent increase on the previous year’s sum, and the $57.8m set aside for other countries was 13.9 per cent higher. Coming in the face of opposition from the Treasury, which had sought to contain the aid appropriation to a 7 per cent rise, the increase was marked and t
he victory significant, a validation of McMahon and his department, and of their equal ability to argue their corner.67 But the press reports that publicised this victory gave ample ammunition to Whitlam. While congratulating McMahon’s efforts, the Labor leader pointed out that if Papua New Guinea was excluded from consideration, Australia’s overseas-aid programme would amount to a miserly 0.2 per cent of gross national product, well short of the 1 per cent ambition recommended in a major report produced under the auspices of the World Bank, which cabinet had itself endorsed.68 Moreover, as Whitlam pointed out later, McMahon’s announcement on Cambodia was a reversal of earlier promises, sustained for the five months since Sihanouk had fallen, not to provide military aid. The inconsistency gave Whitlam the opportunity to lambast the government’s foreign policy and its inability to extricate itself from the tragedy of Vietnam: ‘Cambodia is the proof, as it is the product, of the colossal blunders of Vietnam.’69

  But McMahon was not present to hear the criticism: he was abroad. Accepting an invitation that the Japanese ambassador had extended in April,70 McMahon left Australia on 7 September to visit Japan and the United States in a trip as memorable for his conduct as any foreign-policy achievement. In Japan, following a speech on Australia’s aid policy, McMahon staggered Australian officials who were accompanying him by insisting that they join him for a workout in the gym and a Japanese massage. ‘They will walk on your back,’ he told them. ‘This really strengthens your back muscles.’ After the massage, he strode back to his hotel wrapped only in a towel.71

  Things were no less odd when McMahon arrived in the United States ten days later. For although the catalyst of the trip was meetings of the ANZUS Council and UN in New York, McMahon ensured there was room set aside for pleasure. During his time in the US, he was to watch Sir Frank Packer’s second attempt to win the America’s Cup.

  During his quixotic quest, Packer had attracted a large amount of press attention, both at home and abroad, and garnered high-level government support. The Australian embassy had rented a home in Newport for the entirety of September in order to observe the race; had held a costly reception for guests at a Victorian-era chateau; and when shipping delays caused concern that Gretel II — the yacht Packer had built to lead the challenge — might miss the challenge, Gorton had intervened to ensure it arrived on time.72 Documents suggest that Packer might even have attempted, via McMahon, to enjoy further, more explicit, support in the form of a diplomatic passport. But, as Phillip Lynch told McMahon’s secretary, following a conversation with Billy Snedden, ‘no promise was made concerning a diplomatic passport for “Mr Packer” … Secondly, in his present position he would have no entitlement for one.’73