As Australians lament the generous superannuation scheme enjoyed by politicians it is worth looking back at this excellent paper that Race Matthews gave to the Fabian Society last year about Jeff Kennett’s appalling threats in 1991 to cancel the superannuation payments of Labor MPs if they did not resign immediately.

Mr Kennett’s ultimatum was arguably the gravest contempt of parliament in any English-speaking parliament in living memory. As Mr Tony Parkinson writes in his recent biography of Mr Kennett, the ultimatum was “not only grotesque politically, but possibly dubious legally”. A Melbourne Age editorial of the day condemned it as “political blackmail and populist demagoguery”. It is instructive to review the Superannuation Ultimatum Affair in the light of the subsequent failings of the Kennett government in regard to parliament, parliamentary democracy and public accountability which in so many respects the Affair foreshadowed. As George Santayana reminds us, “Those who cannot remember the past are doomed to repeat it”.

Mr Kennett’s Superannuation Ultimatum

The essentials of the Superannuation Ultimatum Affair are simple. Mr Kennett gained office as Liberal Leader and Leader of the Opposition following the defeat of Mr Lindsay Thompson’s Liberal government in 1982, lost the leadership to Mr Alan Brown in 1989 and re-gained it from Mr Brown two years later. Following his re-election as leader, he announced the adoption of a secret five-stage plan to force the unpopular Labor government of the day to a premature election. When the first three stages of the plan failed to achieve its objective, he stated in a radio interview on the morning of 23 May, 1991, that he was proceeding to an as yet undisclosed stage four. As emerged later in the day, that stage was his superannuation ultimatum.

Mr Kennett told his morning interviewer that “I can never remember anything as dramatic as this ever being done”:

“I will be having a leader’s meeting at 11 o’clock just to bring the coalition membership together again, with the exception of the three that are over in China representing our interests and the Coalition shadow Cabinet will meet at 11:30. The coalition itself will meet at 1:30 and I expect to be announcing to the public at 3 o’clock the fourth stage of this overall strategy.”

The interview also confirmed that the preparation of the ultimatum had been kept secret from all but his most senior party colleagues. Mr Kennett said: “With the exception of the other seven leadership members and one staff member, it has been totally withheld. In other words, no-one outside the parliamentary leadership group has had a clue.”

Faced with so comprehensive a fait accomplit, the party meeting appears to have felt that it had no option but to fall in with Mr Kennett’s wishes. As the Age’s state parliament correspondent of the day, Ms Robyn Dixon, summarised the meeting’s dilemma:

“The misconceived superannuation strategy was closely associated with Mr Kennett. He hatched it in secret, built up public expectations about it, and then sprang it on the party at a meeting where the media waited outside. Coalition members had the choice of embracing his plan or damaging his leadership.”

Even so, the veteran MP and former Leader of the National Party, Mr Peter Ross-Edwards, is reported to have spoken vigorously again the move, damning it as immoral. Other MP’s supported Mr Ross-Edwards’ position. It was only after a three hour debate and a secret ballot that Mr Kennett was able to secure endorsement of his proposal. A report in theSunday Age read:

“The cold-bloodedness of Mr Kennett’s secret strategy had been revealed, and the majority of the 67 coalition MPs, faced with the choice of backing the plan, and their leader, or rebuffing him, supported the move because it promised the slim hope of forcing an election.”

The party meeting’s decision was a foretaste of things to come under the Kennett government. Many of the coalition MPs who were party to Mr Kennett’s superannuation ultimatum also supported him as Premier in his silencing of the Auditor-General and other assaults on government transparency and accountability.

Mr Kennett was now ready to proceed. Following the party meeting, he faxed to Labor MPs copies of a five-page press statement over his name, which in part demanded that the Labor government of the day should call a state election no later than midnight on 29 May, 1991. The statement read:

“If the government has not caused a State election to be announced by Wednesday, 29 May, 1991, then all sitting Australian Labor Party Members of the Victorian Parliament who retire from Parliament after that date and prior to the next State election, or who stand as a candidate at the next election and subsequently lose their seat will be denied access to the taxpayer funded component of their Parliamentary superannuation entitlement. … The denial of the public component of the ALP Members’ superannuation will be achieved through special legislation. This will be introduced by the Coalition Government, and made retrospective for the entire parliamentary service of all ALP Parliamentary Members. … The decision is fixed and firm. The deadline is set and firm. Having taken this step we are committed and determined to proceed.”

As Mr Kennett affirmed repeatedly in media interviews – and subsequently in evidence before the Privileges Committee of the Parliament – he was giving the Labor MPs a five day period to “re-arrange their financial affairs” . Labor MPs would have five days in which to decide whether to resign or risk losing their retirement income entitlements.

Mr Kennett also told a radio interviewer that if he reneged on his stand he would resign. He said “If I do that, and record this and record it well, I will resign. We are not fooling. This is not a gimmick” . Nor was this an off-the-cuff or casual commitment. A later report in the Herald-Sun quotes him as reiterating that “Of course I will implement the policy. If I don’t, I will resign”.

Reaction to the Ultimatum

Four days after the dispatch of Mr Kennett’s fax, on 27 May, the Treasurer of the day, Mr Tom Roper, drew it to the attention of the Speaker of the Legislative Assembly, Mr Speaker Coghill. The Treasurer’s letter to the Speaker reads:

“It is clear that Mr Kennett has attempted to intimidate members, including myself, in the conduct of their duties and that such a threat is a breach of privilege. I ask you to consider this matter and confirm that there is a prima facie case of breach of privilege in order to give precedence for a motion to be moved to refer the matter to the Privileges Committee.”

Mr Speaker Coghill advised the Assembly the next day that, in his opinion, a prime facie case had been made out and that debate on the matter should be given precedence over other business. Following a division on party lines, it was resolved “That the complaint made by the Treasurer on 27 May 1991 be referred to the Privileges Committee for examination and report”.

Meanwhile Mr Kennett’s strategy had begun to unravel. The Clerk of the Senate, Mr Harry Evans – Australia’s pre-eminent authority on parliament and upholder of its prerogatives – was reported as confirming that “The precedents of such contempts, both in Australia and in the United Kingdom, indicate that any threat against members intended to influence them in their conduct as members or to penalise them because of such conduct can be held to be a contempt of parliament”.

Mr Evans also noted that “One could make out a persuasive case that remarks of the kind in question could be held to be an offense” under section 28 of the Crimes Act. The Act prescribes a penalty of three year’s jail for anyone who “by threats or intimidation of any kind hinders or interferes with the free exercise or performance, by any other person, of any political right or duty”.

The Melbourne University constitutional lawyer Dr Greg Craven – no friend of the Labor Party or the government – condemned the ultimatum as “beyond the pale”. In Dr Craven’s view, Mr Kennett’s move was “disturbing” because “it seems to me to retrospectively penalise any MP for their action in Parliament, which poses grave doubts about the freedom of MPs”.

The then Chairman of the Victorian Council for Civil Liberties, Mr Ron Merkel, QC – now Mr Justice Merkel of the Victorian Supreme Court – described the move as “probably one of the most fundamental assaults on parliamentary democracy that we’ve seen in this country”. Mr Merkel continued:

“It’s quite unprecedented and its the sort of thing that you’d expect to hear in fairly uncivilised or immature democracies or petty dictatorships. … I find it very difficult to accept that a threat made to parliamentarians about how they carry out their duties with a financial incentive attached to it to carry out the function in a particular way is anything other than a fairly clear breach of parliamentary privilege. … I think the first thing that should be done is it should immediately be referred to the parliamentary Privileges Committee.”

Media reaction – other than in the rabidly pro-Kennett and anti-Labor Melbourne Herald-Sun – was also uniformly negative. The Australian Financial Review accused Mr Kennett of descending to “the politics of the lynch mob”. An Age editorial of the day reads “The Opposition Leader’s obsessive pursuit of premature power has led him and his colleagues to commit an act of political blackmail so vindictive as to raise grave questions about their political judgment and stability.”

Mr Rupert Murdoch’s Australian – again no friend of Labor – characterised the ultimatum as “Rambo-style headkicking and blackmail threats”. The Age’s “State of the Nation” columnist, Mr Peter Cole-Adams, may have expressed the feelings of many within the community when he wrote “The saddest thing about this exercise is that the coalition parties are desperate enough to support it. But there are surely decent people among their ranks who are this day feeling thoroughly uncomfortable, even ashamed”.

Mr Kennett’s Liberal colleagues in Canberra were no more supportive. In the view of the then Opposition spokesman on corporate law reform and consumer affairs – and future Treasurer – Mr Peter Costello, Mr Kennett’s threat could be seen as an affront to human rights. Mr Costello also said “There is a legitimate question here. Singling out people for punishment because of the political party they happen to represent is not what one would expect in a society that values freedom of political opinion”. Fourteen Victorian Liberal federal MP’s contacted by the Herald-Sun told the newspaper that they supported Mr Costello.

Liberal MPs from other states were reported to “furious” with the Victorian branch. In their view, Mr Kennett’ ultimatum “flew in the face of the image they were fostering for the Leader, Mr Hewson, as a man of impeccable integrity and propriety”. Mr Hewson, declined to endorse Mr Kennett’s stand. The then former Leader – and future Prime Minister – Mr John Howard, said that Mr Kennett should instead concentrate on presenting his party as an orthodox alternative government.

Most of all, much of the voting public emphatically rejected the ultimatum. A week after what Mr Kennett’s had taken to describing as his “quantum leap”, Opposition MPs were reported as being unable to credit the loss of support which it had cost the party. Their concern was justified. According to the Sunday Age:

“Calls to the electorate offices of Liberal and National MPs across the state became increasingly angry at the plan. Many MPs were sent protest letters from voters outraged that the alternative government would threaten MPs with financial penalty if they didn’t resign. Finally, some of Mr Kennett’s most important supporters in the business community began to waver, and they told him so.”

Opinion polling for the Herald-Sun showed that Mr Kennett’s approval rate had fallen since the ultimatum, from 47 per cent to 37 per cent, while his disapproval rate had risen from 36 per cent to 52 per cent. Support for the coalition parties declined over the same period from 62 per cent to 50 per cent. Unsurprisingly, as the Parkinson biography has now disclosed, at party headquarters the then State Secretary, Mr Petro Georgiou, was furious, as were most of the political professionals: “None of them had been told of the plan, which cut across the election strategies they had been carefully putting in place”

The Withdrawal

The inevitable followed. Within a week of Mr Kennett’s announcement of his threatened denial of the superannuation entitlements, his “kitchen cabinet” had walked away from it. As the Sunday Age reported:

“Led by Mr Kennett’s unofficial lieutenant, Mr Tom Austin, a group of senior Liberals delivered the ultimatum: the policy was a disaster and it had to be dropped and damage control initiated. … By the time Mr Kennett called an emergency meeting of the leadership group, his decision to abandon the plan was all but made.”

On 31 May, Mr Kennett announced that his ultimatum had been withdrawn. The Sunday Age quoted him as stating that “It was felt that it was better for us to cut our losses”. For all that he had pledged to resign if his stand was reversed, his resignation failed to eventuate “Since I am not taking the (super) policy into an election, the commitment to resign has ended”, Mr Kennett said.

Even so, there was no apology from Mr Kennett, nor was there any indication that the gravity of his offence was apparent to him. In response to press queries about the debacle, he stated:

… I don’t feel humiliated. It is better to have loved and lost than never to have loved at all. In life you very rarely achieve anything unless you give it your best shot. … If that means I have got to wear egg on my face, I am prepared to do it.

The Privileges Committee

Mr Kennett was likewise unrepentant in giving evidence before the Privileges Committee. According to his testimony, the substance of the statement he had faxed to the Labor MPs had not been intended as a threat, nor could he be held accountable for it as it had been issued in the name of his party, and accordingly should be regarded as a party policy. It is unlikely that even the coalition members of the committee were impressed by either argument.

While the actions of the party meeting rendered it complicit in Mr Kennett’s threat, this in no way absolved Mr Kennett from the contempt he had perpetrated by instigating and implementing it. The logical conclusion from Mr Kennett’s argument was not that Mr Kennett should be relieved of the blame for what had occurred because his colleagues had shared in it, but that they also should be called to account. Members of the committee may also have seen Mr Kennett’s answers to its questions as being – to say the least – evasive and disingenuous.

In the event, neither Mr Kennett nor his fellow coalition MPs answered for their actions. Bombarded as the Privileges Committee found itself on all sides by claims from the Opposition and the media that it was necessarily and inescapably a kangaroo court – that the presence of a majority of government members meant that an Opposition member could have no hope of receiving fair treatment from it – the Committee leaned over backwards in attempting to achieve consensus around a formula, such as an apology, which would extricate itself from having to return a finding that a contempt had been committed, and the parliament from having to impose a penalty commensurate with Mr Kennett’s offence.

The effect was to enable Mr Kennett to divert the committee from its inquiries by first promising to make an agreed apology, and then reneging on his promise. Given the willingness – albeit perhaps in some cases reluctant and shamefaced – of Mr Kennett’s coalition colleagues on the committee to back him in refusing to settle for anything short of an exoneration, no consensus could be achieved.

The Committee’s final report – presented to Parliament more than a year after the events which occasioned it – reflected its inability to reach agreement. It stated:

“The Committee has chosen to report the facts of the matter to the House and propose a course of action for the guidance of Members in future. The Committee therefore recommends that the House resolves to remind all Members to have regard to the privileges of the Parliament and its Members in the performance and discharge of their duties. The Committee also recommends that the House affirm that any act or omission which obstructs or impedes any Member in the discharge of his or her duty or which has a tendency to directly or indirectly produce such results may be treated by the House as a contempt, with the House having the discretionary power to take action on such a contempt.”

That the Committee failed to recommend action against Mr Kennett – that it failed to lead by example in the face of so grave a contempt as Mr Kennett was so near-universally seen to have perpetrated – was unsurprising, given that most other references to Privileges Committees also have unsatisfactory outcomes. The report begs the question of how much greater an offence would be required in order for the discretionary powers to be exercised. In the absence of proper disciplinary procedures, parliaments are at the mercy of members so unscrupulous as to exploit their ineffectuality. How to lift the game of the current Privileges Committee system, or replace it with a better disciplinary procedure, are issues which remain to be resolved. However, well-wishers of parliaments and parliamentary democracy would be unwise to hold their breath in the expectation of an early remedy.

Consequences: Premier and Parliament

The consequences of the inability of the parliament to stand up for itself and defend its prerogatives against Mr Kennett were predictable. Parliament’s failure to call Mr Kennett to account for the Superannuation Ultimatum Affair confirmed him in the contempt for it which the Affair so plainly demonstrated. The Kennett government more comprehensively undermined parliamentary accountability than perhaps any other government – state of federal – in Australia’s history.

The former Labor senator and minister, Graham Richardson may have coined the phrase “whatever it takes”, but Mr Kennett elevated its practice to an art form. The frailness of democratic accountability was never more nakedly apparent than in – to recall only the more obvious examples:

* Mr Kennett’s silencing of statutory watch-dogs such as the Auditor-General, the Director of Public Prosecutions and the Equal Opportunity Commissioner,

* his gagging of teachers, doctors and other professional staff in the public sector;

* his misuse of “commercial in confidence” requirements to avoid public scrutiny of government contracts,

* his insertion of confidentiality clauses in funding agreements with non-government organisations,

* his curtailing of freedom of information entitlements,

* his undermining of the independence of the judiciary and limiting of access to the Supreme Court,

* his restricting parliament to the fewest sitting days on record, and

* his stifling of parliamentary committees, including in particular the Public Accounts Committee.

Mr Kennett’s disdain for parliament was also evident in his refusal to honour the bipartisan agreement on long overdue and urgently needed reforms of parliament and amendments to parliamentary standing orders to which he had been party as Leader of the Opposition. His “Do you sleep with boys?” taunt of the Opposition Leader and his “If you can’t get a girl, get a Melbourne Grammar boy” taunt of the Deputy Opposition Leader were new lows in the habitually abysmal standard of Question Time.

The Kennett years were a time of creeping corrosion of the political and civil fabric of Victorian society. Had the government been re-elected for a third term of office, much of the damage to parliament, parliamentary democracy and public accountability may well have become entrenched. For example, what would have become of such independence as remained to the Auditor-General if a further election victory had enabled Mr Kennett to claim a mandate for his emasculation of the office? And which of such other mechanisms for transparency, scrutiny and accountability as had survived the government’s first two terms of office might not also have been abolished?

Seen in their proper context of the paramount obligation of heads of government to uphold and defend parliamentary democracy and accountability, claims for Mr Kennett in other spheres equate with Mussolini’s making the trains run on time or the excellence of Hitler’s autobahns. It is unwise for democracies to put their trust in leaders who have no respect for democratic principles or institutions.

Race Mathews is a Senior Research Fellow in the International Centre for Management in Government at the Monash-Mt Eliza School of Busness and Government. He has been a federal MP, a Victorian government MP and minister, a municipal councillor and chief of staff to Gough Whitlam as Leader of the Opposition in the Australian Parliament 1967-1972. He was a member of the Victorian Legislative Assembly Privileges Committee during its hearings on Mr Roper’s complaint against Mr Kennett in 1991.

His E-mail address is [email protected]

Peter Fray

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