Partnership In Tatters

by Paul Kelly - The Australian

John Howard's mishandling of the leadership issue has enabled Peter Costello to confront the party with its true choice – a leadership transition or a descent into 1980s-style disunity.

The days of denial within the Liberal backbench are numbered. Backbenchers love the easy life – in 1991 they wanted both Hawke and Keating and in 2005 they want both Howard and Costello. And why not?

But that option is no longer available for another election. The leaders, the backbench and the party will have to make a choice. For election 2007 it is Howard or Costello and the Liberal Party needs to snap out of its dream and confront the reality.

This is what Costello made clear on the Ten network on Sunday and at his doorstop on Monday after his talks with Howard. It is no surprise that he gave Howard even more frankly the same message that he gave the Australian public.

"The Liberal Party expects that at the senior levels there will be an orderly transition in relation to the leadership, that this be done in the interests of the parliamentary party and that it be done in the interests of the Liberal Party and its wider organisation and supporters," Costello said.

The Costello camp sees next autumn as the trigger for the transition. That will follow Howard's March 2006 anniversary of 10 years in power. Next year is the key to how this partnership unravels and whether that process will destroy the Government.

The remarkable point is not that the Howard-Costello partnership is coming to an end but that it has lasted so long. It is now 10 years and four months since January 1995, when Howard became leader to Costello as deputy, a record that easily surpasses Hawke and Keating. In his Channel Ten interview Costello was appealing to Howard for a mutually agreed handover from strength in a process that would make them both winners and keep the Liberal Party in the smart politics of a smooth transition like 1995 and not a return to the fatal rivalry of the '80s.

But Costello is making another appeal – for Howard to recognise that he has been a beneficiary of Costello's loyalty and that for Costello, after 10 budgets, a viable transition must come this term.

Howard told the ABC's Kerry O'Brien on Monday night that he has not yet decided whether he will stay or resign this term. There is no reason to disbelieve this. Howard, after all, doesn't have to make up his mind now and media commentary that Howard has decided to stay is wrong. Howard doesn't operate like this – his decision, as ever, will be a function of the politics.

Howard said that when he does decide he will speak to Costello first and then the Liberal party room. He agreed that if he resigns then his successor must have "adequate time to establish his own persona as prime minister". So Howard has rehearsed in his head the right way to resign. He knows how to retire with grace.

The Howard-Costello impasse was apparent in their hour-long talk on Monday when Costello asked Howard to set a timetable for departure but Howard refused outright. Anybody aware of Howard's views knows his hostility to any Hawke-Keating Kirribilli-type pact on a handover. Howard is obsessed about becoming a lame duck and cutting off his options by taking a decision before it is required.

It is obvious that Howard's Athens declaration was a revealing yet inadvertent blunder. Howard was not sending Costello a message on budget eve from Athens that he planned to remain as PM. But this is not the issue.

The issue is that Howard is falling victim to the demon hubris. He is making too many mistakes and the leadership blunder is just the most dramatic. Maybe this was inevitable – he loves the job, he thrives in foreign affairs, he believes he can beat Kim Beazley next time, his poll ratings are strong and he sees no move against him in the party. It's quite a temptation.

Howard has overplayed his hand on the leadership. He has misjudged the situation and he has insulted Costello. In Athens and in his Monday interview with 2GB's Alan Jones, Howard was talking like a leader who is staying and, in the process, he provoked his deputy, who expected a transition last term and has decided that he won't be strung along by Howard for another term.

The implication from the Jones interview is that Howard takes his formula literally – that he will stay unless the party room turns against him.

"My position is at the pleasure of the Liberal Party," he said. "When it becomes very clear to me that the Liberal Party would like a change, then I will acquiesce. I don't get that impression now – I don't think the public has that impression."

This suggests that Howard will have to be put under pressure. But how much pressure?

On the other hand, Howard said: "I have not had any indication from the party that that time has arrived. I will know when it's arrived. I won't need, you know, I won't need some protracted leadership battle to tell me that."

Howard leaves the impression of a leader who wants to put off the evil day because he knows what his obligations should dictate. He has been most unwise to revive the leadership and suggest that he will thwart Costello a second time. The upshot is a government now destabilised at its apex.

By invoking the party room as the operating source for his legitimacy Howard gives a reluctant Costello little option but to take resort to the party room against him.

Many Liberals believe that Costello lacks the ticker and that Howard's numbers are rock solid. They forget their history. Once the party is called on to make a choice – Howard or Costello – then the dynamic changes. Most such contests are decided in favour of the future, not the past.

Costello's public remarks suggest he has crossed the Rubicon in psychological terms. Note, however, that Howard says he accepts that Costello is his successor, that he won't put his own interests before the party's and that he won't need "some protracted leadership battle" to tell him the time has come.

This contest has a long way to run. If Howard's statements are taken at face value they point to a Howard resignation down the track. But Costello, of course, thinks that Howard cannot be trusted.