Losing it (inside look at the Aussie left's election defeat)

THE final Saturday before election day 2004 dawned cool and cloudy in Sydney. But at Labor campaign headquarters in Canberra, the party's senior strategists permitted themselves a brief moment of sunny high spirits.

After a long and haphazard campaign, the main event on Mark Latham's daily itinerary was a barbecue for families in western Sydney, where campaign veterans hoped the leader would get back on track, hammering home Labor's key campaign message: "Families under financial pressure - ease the squeeze."

Like most campaign stunts, the barbecue at a park in Parramatta would appear casual and light-hearted despite being the result of hours of meticulous planning. Sausages, salads and bread rolls had been ordered for about 100 people - mainly young families - who had been invited after careful vetting by the NSW branch of the Labor Party. Although campaign security meant they could not be told about Latham's scheduled appearance, about 80 had RSVPed by Friday.

But the sausages never made it on to the barbie and the salads stayed in the Esky.

According to sources travelling with the leader and at Labor's campaign HQ, Latham woke that morning and decided he did not want to attend a barbecue, regardless of how many supporters had been invited. Nor did he want to speak about families or easing the squeeze.

"The word came back that Mark had woken up and decided to talk about Kirribilli House instead," a senior member of Labor's campaign strategy group recalls. "So that was the end of our opportunity to talk about tax and family benefits."

Says another: "We were like: What?! Why do you actually get the most experienced campaigners in the country nutting these things out and then on a whim change your mind about it?

"We had images of families turning up, still looking for sausages, and he's off somewhere else talking about Kirribilli House. And who cares? It certainly wasn't showing up anywhere in our research."

Neither did it show up in the news the next day. Most Sunday newspapers buried the story, running only a few paragraphs inside about Latham's pledge to give Kirribilli House "back to the people".

To Labor insiders, the barbecue incident was a microcosm of all that was wrong with Latham and his campaign.

Latham had all but rejected the party's vast campaign machinery. The rookie leader was running his campaign the way he wanted it - on gut instinct alone. He had become a one-man show, dictating his daily message, his media opportunities and his campaign strategy. Labor's small army of strategists and advisers had been pushed aside. They had become the ALP campaign's fringe dwellers.

"You think a guy like that would come to the leadership and say, 'Shit, I could do with some help'," one strategist says. "There was no shortage of willing people who wanted to help win the federal election -- and some of them had decades of campaign experience -- but they didn't get an opportunity. He was determined to dictate the direction."

Six days later, Latham - now a barbecue-stopper in his own right - would lead his party to its second worst election result since World War II.

In the blink of an eye, Latham has gone from hero to zero in Labor ranks. The backlash against him is gathering pace with each day of election post-mortems, throwing doubt on his future as leader as he approaches his first anniversary in the top job.

Now, in interviews with The Weekend Australian, key Labor insiders, campaign strategists, advisers and frontbenchers reveal the inside story of Latham's sudden rise and his spectacular fall from grace. The willingness of so many senior party figures to talk so frankly, albeit anonymously, about Latham reflects the depth of concern in Labor ranks about his leadership and a fear, shared by many Labor MPs, that it may be unsalvageable.

Latham has tagged his anonymous critics as big men on the blower but cowards in the caucus. But these insiders reveal a compelling portrait of Latham as a forceful, headstrong and intuitive leader with a swaggering, unshakable confidence in his own judgment. They say Latham's refusal to take advice left him exposed when his judgment failed him and ultimately doomed the party to its historic defeat.

The slide has been so fast that it is easy to forget Latham was embraced as the future of Labor barely 12 months ago. On his debut, the rookie wrong-footed the Prime Minister by ignoring traditional battlefields and instead dwelling on left-field social issues such as reading to children and obesity. It was a quixotic approach to political leadership and could easily have been dismissed as madness if the polls hadn't reacted so well to it.

Latham was fresh, unpredictable and intoxicating. Better still, he was not Simon Crean.

"His unorthodox style was a real plus for us early on, it put Howard off balance," says one Labor MP.

Latham spoke of ladders of opportunity and of his working-class home in a place called Green Valley. He was leading by gut instinct and dragging a once-divided party and a sceptical public along with him. This was conviction politics - Latham style - at its best.

"People didn't know much about him but they were giving him the benefit of the doubt," says one Labor strategist. "He was coherent, he could string two words together and he said interesting things."

By March, the euphoria was such that some in Labor had dared to dream of assuming government by year's end.

But being Crean's successor had also created some baggage. Suspecting that Howard would call an election as early as midyear, Latham felt he could not afford the luxury of building an entirely new team of advisers, opting instead to inherit several of Crean's staff. It was never a good fit.

Even as Latham enjoyed his extended political honeymoon, tensions were simmering behind closed doors about his autocratic style.

"Simon was all about structure and process," says one insider. "He was always at meetings, reaching consensus. Mark was completely the opposite. There was no process at all - he just reaches out and grabs a bit here and there."

Adds a former staff member: "Mark's very much his own adviser, his own tactician, his own strategist, his own media man. There was never a team of people who sat down with him to work out what our messages were and what our strategy was leading up to the campaign. It was just all in Mark's head."

One MP says Latham's lone wolf approach caused problems for the party's factional system.

"He often came to deals with factions and then he would come in and unilaterally change it and then expect us all to go along with it. He would dispatch Laurie Brereton to go and fix things up with colleagues who were going off their tree."

These tensions were being felt behind the scenes, but in March the flip side of Latham's lone wolf style first emerged publicly. Without consulting his colleagues, he declared that as prime minister he would bring Australian troops home from Iraq by Christmas. Latham's aim had been to give Labor a clear point of difference with the Government on Iraq. But the arbitrary Christmas deadline misread the public mood on Iraq, triggering a slide in his approval ratings and effectively ending his extended honeymoon.

"Troops out by Christmas was the catalyst for a lot of doubts to start setting in," says a Labor insider. "People suddenly started saying, 'Hang on, do I really know this bloke that well? Am I entrusting in him my support too soon without thinking it through enough?"'

In that same month, the nation's business leaders got a private glimpse of another side of Latham's personality when he addressed a dinner in Sydney held by the Business Council of Australia. Recalls one guest; "The crunch came when he started answering questions. His replies were dismissive and perfunctory. Frankly, he looked like he was there out of duress."

Latham took questions from the floor on fiscal and monetary policy, but as his lack of interest became apparent, the mood in the room soured.

"By the end of the night several CEOs were openly saying that they were embarrassed by his performance and many others were saying it was unsettling," says one business leader. "Because he clearly did not try, it made business paranoid and worried. By the end of the night there was a dark suspicion that Latham was anti-business."

The BCA dinner was the earliest and most visible example of Latham's indifference to the business community - and there would be plenty more to come all across the country.

Behind the scenes, this approach was dividing Latham's inner circle, with some arguing that Latham should seek to woo big business in the same way that the Hawke-Keating governments had done. At the very least, they argued, he needed to reassure business that he was not toxic.

"With Mark, the business relationship was a joke," says a key Labor strategist. "He said, 'These c---s will never vote for us' - that was his view and he always said it. We stopped taking him to business meetings in the end because it was causing too much damage. It was better not to go at all than to turn on the sort of petulant teenager performances that he did. He would not be across the brief, his speech would be inadequate and his answers would be surly. He reminded me of a grumpy kid who was made to sit in a class and do something he didn't want to do."

The same brusque approach also alienated key stakeholders in the wider community. Says one senior Labor figure: "He wanted to make that a virtue. He wanted to make rudeness towards the business community a virtue, as well as disregarding other interest groups in the community, and the media. I think he wanted to seize the prime ministership knowing absolutely that he didn't owe anybody."

For the next four months, Latham struggled to regain his lost momentum. It was not until July, when Latham forced the Government to amend the US free trade agreement and when he brought Kim Beazley back to the frontbench, that his fortunes brightened once again.

By this stage Latham was all but ignoring the advice of some key insiders, including his chief-of-staff Mike Richards and media director Vivian Schenker. A rare and ironic exception was vanquished former leader Beazley. Aware that he needed to shore up his credentials on security and defence after his Iraq blunder, Latham sought Beazley's counsel. Beazley told Latham the key to neutralising Howard on security was to argue for greater emphasis on fighting terror in Australia's neighbourhood rather than on distant battlefields.

One Labor source who saw the exchange says Beazley laid out what he believed Labor's security and defence policy should be, while Latham sat nodding his head, replying "Yep, yep, yep" to each of Beazley's points. "From that moment on, Mark did not deviate from the script," the source says.

And neither did the Labor Party. Despite some internal misgivings about Latham's style, polls suggested the party had a chance of winning government and there was no choice but to fall in behind the leader.

WITHIN a few hours of Howard fronting the television cameras on August 29 to announce an election date, ripples of alarm were spreading through Labor circles.

Veteran strategists say the first day of an election campaign should run like clockwork because the leader has a single, relatively straightforward task: face the cameras and set out your party's agenda and key messages before the water is muddied by stunts or accusations.

Latham had eschewed the assistance of a speech writer, instead jotting his own notes for his response in longhand in a Spirex notebook, as he would throughout the campaign. Gathered to watch their leader, Latham staff looked on as Latham rambled through a maze of rhetoric without hitting on a single unifying theme.

"Howard's presser was brilliant, ramming home the message: Who do you trust to keep the economy strong and interest rates low?" recalls one member of the Latham travelling party. "Mark was all over the place. By the end, no one had a clear idea what Labor was for because he failed to define our message."

It was a grim portent of what one senior source within campaign HQ would later call the "full horror" of working with Latham on the campaign trail.

As he had done within his office and the caucus in preceding months, Latham quickly made it clear he did not feel it was necessary to listen to, let alone take the advice of, those in the party machine before determining his strategy. Unlike his opponent - Howard is famously almost as committed to the morning hook-up as he is to his morning walk - Latham saw little need to attend daily teleconferences with the rest of the campaign team. On the road, it would be left to John Faulkner or Stephen Smith to sit in on Labor's morning conference, then attempt to convey its key themes and recommendations to the leader.

"Faulkner and Smith deserve more medals than you could ever cast for them," says the HQ source. "They had to carry the day-to-day brunt of knocking on Mark's hotel door, explaining what we'd like him to do today, and then leaving with their tail between their legs."

Even at this early stage, the frustration felt by campaign co-ordinators was compounded by Latham's tendency to change plans at the last minute.

"He's a great one for ignoring formal structures and f---ing around with policies far too late," says a senior source. "But the campaign apparatus is like a large army on the march. You can't just turn it around, say 'Let's attack Japan' one day, then 'No, Cuba' the next. If the leader changes his mind, you have to change everything."

What was extraordinary was that Latham had not prepared an effective counterpunch to the Government's attack on interest rates. For the army of suburban voters saddled with record mortgages, it was a fatal error by the boy from Green Valley. But Latham would not be swayed. He refused to engage on economic issues, insisting that "new politics" was about refusing to fight "on their territory".

In the first week of the campaign, Latham had to be "dragged kicking and screaming" to sign a guarantee that interest rates would not rise under Labor.

"It flopped big-time because he had no personal conviction at all to fighting on the issue," says one campaign strategist.

On several occasions afterwards, he specifically forbade ALP national secretary Tim Gartrell from running ads prepared and tested with focus groups, responding to the Government's attacks on Labor's economic credentials and Latham's record as mayor of Liverpool Council. Ultimately, only about 10 of an estimated 40 to 50 ads prepared by campaign HQ were aired.

Latham's ploy not to attack the Government more aggressively on economic management is believed to have angered Paul Keating who, according to one source in Latham's office, told Latham in no uncertain terms during the campaign that he should parade the economic reforms of the Hawke-Keating era as evidence of Labor's economic credentials.

"Keating was encouraging Mark to talk about the economy and he even gave Mark some lines to include in his campaign opening speech, and none of them were included," the source says. "The relationship at some point totally fell apart then, and now Keating bags the crap out of him."

Another Labor insider says the reported rift is greatly exaggerated. Keating refuses to comment.

Latham's public embrace of Gough Whitlam also raised the eyebrows of some colleagues. "It was idiotic," says one Labor MP. "Gough is an icon within the Labor Party but many other people remember [the Whitlam administration] as one of the worst governments in history - Gough is not a vote winner."

Sources say Keating and Whitlam phoned Latham's office regularly. Insiders say the pair reinforced Latham's sense of utter self-belief and actively encouraged his disdain for his peers, including those co-ordinating the campaign from campaign HQ.

"Someone, probably Gough, told him not to listen to 'the losers'. That meant things sometimes didn't get debated or thought out as they should," says a former staff member.

At the end of a wobbly first week of campaigning, Latham brought the experienced Faulkner into his inner sanctum and - after some resistance and at Faulker's insistence - the former "rooster" Smith. When Faulkner and Smith walked in to Latham's office, they were dismayed by what they found.

"It was a toxic workplace," says one staff member. "There was a swinging-dick group-think culture - it was a horrible atmosphere."

But despite a dysfunctional office and a poor first week, Latham clawed back ground in week two, culminating in a dominant performance in the only leaders' debate on September 12.

"I think his performance in the debate shut down the security issue for the campaign," says Beazley. "National security was never going to be a vote winner for Labor - the thing was to ensure that it was not a vote loser."

But in the fourth week, Howard wrong-footed Latham with a wild pre-election spending spree announced at the Coalition's campaign launch.

Labor HQ saw its chance, sensing Howard's big-spending promises had left the Government vulnerable to claims that it was the one being irresponsible with the economy.

"It was Fistful of Dollars stuff, illustrative of one of our key themes, that this bloke [Howard] is desperate and will say and do anything to win the election, even risk the economy, because his mad spending spree will put upward pressure on interest rates," a source says.

Gartrell began pulling together humorous ads, based on the theme: Crazy John's End-of-Career Sale. The only problem was that Latham and his travelling party had flown to Perth in preparation for two big-spending policy launches of their own - childcare (worth $1 billion) and skills ($700 million) - the next day.

Never happy to be away from his young family on the weekend, word from the road was Latham was tired and not keen to engage in discussion after the evening's phone hook-up. Nevertheless, several strategists argued strongly for a last-minute change to Monday's itinerary. To give their attack on the Government credibility, it would be best to ditch both policy launches and clear Latham's itinerary so he could spend the day talking about how profligate the Prime Minister had been.

"We were just sitting there salivating, thinking Howard's handing us a real golden opportunity," says one. Then the gleeful momentum slammed to a standstill. "We got word back. No, it's Sunday night, he's got childcare scheduled for tomorrow, it would be far too upsetting and unsettling to him to change the plans this late in the piece, having got him over to Perth."

Throughout the campaign many Labor figures were also increasingly concerned by what they saw as class envy in Latham's policy pronouncements, particularly his willingness to openly parade winners and losers. His schools policy highlighted the dangers of this approach.

Rather than focus on the majority of schools that would benefit from Labor's funding formula, newspapers trumpeted the hit list of private schools that would lose funding.

"Latham's policy was the politics of envy and resentment," says one disaffected Labor strategist. "Class warfare is in his head - he was saying: 'We are going to punish you by taking your money', and that's what drove that policy."

By the last week of the campaign, it was clear Latham was falling behind. The dream of government harboured quietly by so many in caucus was slipping away. A miracle was needed, but instead Latham stumbled into disaster in Tasmania.

The forests policy was the most spectacular example of Latham refusing to take advice on strategy - and the most damaging. Almost everyone who spoke to The Weekend Australian agrees Latham had locked the party into an impossible situation on forests by flying to Tasmania early in the year to tour the wilderness with Australian Greens leader Bob Brown.

"From that moment there was this massive expectation that we'd do something," says a former staff member. "But the weird thing is, he wasn't even interested in forests. He came back from Tasmania and we said, 'What did you see?' And he said, deadpan: 'A tree."'

Given that they were committed to acting on the issue, several senior Labor advisers urged Latham to release the policy early - "The earlier the better, like January or February 1901," mutters one - to prevent the issue overshadowing Labor's key campaign messages about families being under financial pressure.

But Latham insisted he would not release Labor's forests policy until Howard had released his - until it became clear he had misjudged Howard who, as one campaign veteran observes, "was clearly waiting to sucker-punch us".

Contrary to Labor tradition, in the vital last week of the campaign Latham effectively chose trees over jobs in the hope that the harm in Tasmania would be outweighed by new votes on the mainland.

The policy was written in Latham's office with no consultation outside those four walls. Labor's environment spokesman Kelvin Thomson received a copy of the policy on the morning of its release. The policy had his name on it, yet - astonishingly - that was the first time he had set eyes on it.

Says one Labor MP: "If there is an image which ruined any chance for us, it was that of Latham skulking into Tasmania and then skulking out to avoid the workers while embracing that madman Bob Brown."

The other devastating image was that of Howard being cheered by his natural enemies, the timber workers. With only days to go before polling day, momentum had turned decisively against Labor.

Latham needed to lock horns decisively with the Prime Minister to regain the ascendency. Instead, meeting Howard outside a radio station on election eve, he locked hands in a handshake that echoed across Australia.

A conga line of Labor MPs argue that this seemingly minor event was a disaster for Latham and Labor. Says one insider: "That was the moment of implosion for Mark. He came across as a menacing, aggressive, intimidating bastard. It turned people off."

Even Latham realised it hadn't looked good. "He was walking around that night, asking us: 'What did you think of the handshake? Do you think I f---ed it up with the handshake? I lost it with the handshake, didn't I?"' recalls one member of the travelling party. "I didn't tell him, but when I saw it, I thought: 'Well, there goes five marginal seats."'

As polling day dawned, only the truest of believers thought Latham could win. On the afternoon of election day, Gartrell briefed MPs and others in Canberra, telling them that Labor was unlikely to win but that it should pick up seats. He was wrong. Labor recorded just 38per cent of the primary vote - its second worst performance since World War II.

Since the election, Latham's public image has taken a bruising that has far exceeded the usual backlash against losing leaders. His ratings have plummeted and dissent within Labor ranks about his leadership style, barely suppressed during the campaign, has spread like a virus.

It was easy for Labor MPs to hide their concerns about Latham's style when the reward might have been to win government. Now that the party has lost, Latham is the target of some extraordinarily savage criticism from senior ALP figures.

"He has turned out to be all tip and no iceberg," a senior Labor MP says. "For a while we thought there was an iceberg underneath."

But Latham's supporters point out that his many critics have engaged in sweeping revisionism since the election. They did not question Latham during his campaign but are happy to pick his performance to bits with the wisdom of hindsight.

"Ask most of these critics what they thought at 6pm on polling day and they wouldn't have mentioned these things," says a pro-Latham MP.

In campaign HQ, several senior figures say they regret that they didn't speak up earlier or confront Latham about his misguided strategies and rude behaviour. But they say fears of triggering a 1996-style schism, when Keating and national secretary Gary Gray were openly contemptuous of each other, hung heavily over the 2004 campaign.

The year 1996 "is burned deep into the psyche of Labor people", says a source. "It was god-awful. With Mark, there was always the potential for a repeat of that because he's so self-assured. There was always a chance he'd just say, 'Get stuffed, I'm doing it my way.' Our overriding consideration was we cannot have a falling-out with this bloke. So that meant a lot of bowing to him."

Plus, adds another, there was an element of The Emperor's New Clothes about Latham.

"There was a bit of collective lack of confidence from being in Opposition for so long - and he was doing all right in the polls," he says. "So Latham was not checked because of that, because there was a sense that maybe this guy was on to something that we didn't get."

For several weeks after the loss, Latham went into virtual hiding. When he eventually emerged to announce his new frontbench, he was a much diminished figure. Latham hardly needed to create new enemies at this point, but in choosing his new shadow cabinet, he did just that.

With his political capital greatly depleted, Latham spent what little he had fighting to keep his vanquished leadership rival Crean on the frontbench. It was an unusually sentimental move by Latham and one that meant he had nothing left in the tank to argue for his close colleague Julia Gillard to take over the Treasury portfolio.

Latham told Labor veteran and former trade minister Bob McMullan that he was no longer required on the frontbench. McMullan will not talk about it but colleagues say he was stunned by the swift brutality of his execution. Contrary to some reports, he was not even offered a junior portfolio.

Colleagues say McMullan paid the price for being one of the more vocal voices in debating Latham's policies. McMullan ignored their warnings not to challenge Latham, saying that debate was healthy, but after the election he was the first to go.

Latham surprised many in the party by elevating his former enemies - Wayne Swan and Smith - ahead of many of is more loyal colleagues.

"He has taken all of his political enemies - the most poisonous ones - and given them good jobs," says one Labor MP. "It is a good move because they are now all in the tent pissing out."

But those who missed out are less impressed. Lindsay Tanner moved to the backbench in a barely concealed huff. "Lindsay said to me he didn't want to leave but that Mark did not even try to accommodate him," one MP says. "And I think Simon was alienated by the way Mark kept him out of the spotlight during the campaign. Which is ironic given how much blood Mark spilled after the election to keep him there."

Latham now finds himself trapped in a leader's hell - with a party largely disloyal to him and fearful of its future, and the knowledge that he remains the leader largely because there is no obvious replacement. Even Latham's strongest supporters agree that he will become prime minister only if he modifies his leadership style to become more inclusive, more open to advice and less headstrong. But can he?

"The ball's at his feet," says one member of the shadow cabinet. "The truth is, this show can't cope with the sorts of [leadership] wrangling we had for two years under Simon. I don't have strong loyalty to him but there's strong loyalty to the leadership and loyalty to the show - the party."

Adds another from Labor's head office: "He's got to accept that it was his choice to run a very top-down approach to strategy. It didn't work and now he's standing there butt-naked. And I don't think he's helping himself by lashing out."

Certainly, Latham's messages so far have been mixed. He says he accepts responsibility for the loss while levelling blame at state governments and even at his own dysfunctional office. He has vowed to improve his relationship with business and to restore Labor's economic management credentials, but most important will be the personal journey to reconnect with the electorate.

One senior figure who heard Latham's address to the national executive post-mortem remains unconvinced: "There was a roomful of people wanting an act of contrition and they didn't get it. It was like, 'I take responsibility for the forests policy and I'm very sorry that there were those outrageous protests about it.' His body language was appalling."

'But some of Labor's elder statesmen say that Latham will survive this tempest. "People often forget that in that job, possession is nine-tenths of the law," says a senior Labor MP. "We should not be thinking about replacing Mark Latham. We should be thinking about making him better."

Sounds familiar? I'm happy that the Aussie electorate saw through this thug and gave the left a resounding thumping.

I admit to being worried in the lead up to the Aussie election (hell, I was worried in the lead up to the US elections too) but the thumping that John Howard gave the left eased my fears a little for you guys. It seems that Australian and American politics tend to parallel pretty well.

And we got a repeat performance here, except for the Barbecue...LOL!

The one time Kerry saw a plate of barbecue (at that soul food restaurant in Detroit), he looked at it like it was a sweaty gym sock. I'm sure the 'cue suffered the same fate as the food at that Kerry - Edwards "double date" at Wendy's - dumped into the nearest trash can as soon as the photos were taken, while the "great men" and their wives dined on five-star box lunches on the campaign jet.

IIRC, didn't Kerry also stiff the servers at the soul food joint?

I would say the closest thing to that moment was 'the handshake'. The Prime Minister had just been in a radio studio being interviewed on the day before the election, and as he came out, Latham was waiting to go in. The PM put out his hand to shake hands, Latham grabbed him and pulled him right into his body.

The PM is about twenty years older than Latham, and is a much smaller man - Latham was basically trying to intimidate him physically. It didn't work.

The thing is Latham has a somewhat chequered past. He once broke a taxi drivers arm in a dispute (possibly with some justification but it still does not look good). He has a record and a reputation as a bully (his ex-wife has described him as emotionally abusive). All through the campaign he managed to get this side of his personality well and truly under control. That happening the day before the election well and truly reminded everyone of his reputation as rude, crude, impulsive, and possibly even violent.

This is the best picture I can find so far - Latham on the left.

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