Queensland July to December 2000

Political Chronicles 265

JOHN WANNA Politics and Public Policy, Griffith University Once again, as the millennium year came to a close, Queensland politicians demonstrated they had not lost the talent for entertaining the nation. Not content with producing the One Nation whirlwind between two successive minority governments, politics in Queensland saw the Labor party inflict major damage upon itself as evidence of electoral rorting began to emerge. With Labor's credibility in tatters, Premier Peter Beattie ended the year hounding electoral rorters from his own party, losing his Deputy Premier and another backbencher in the process and with clouds hanging over other Labor members associated with the Australian Workers Union faction. The grubby revelations of skulduggery and forgery that provided much media entertainment, were brought on by factional infighting and pay-back politics mainly inside the AWU faction. For Labor, the one bright note from the whole incident was the unshakeable personal standing of Beattie (remaining around 58 per cent throughout the crisis), which paradoxically appeared to be enhanced by his uncompromising "clean out the rorters" stance. Labor remained more popular than the Coalition throughout the entire second half of 2000 despite the electoral forgery allegations. The government was riding high in the polls in June with 62 per cent support on a two-party preferred basis and 49 per cent primary support (its highest level of support since the immediate post-Fitzgerald days of 1989-92). Labor held its ground in July-August (retaining 49 per cent primary vote) despite losing slightly in two-party preferred terms (down by 4 per cent to 58 per cent). But in polls conducted in September-October the party regained its huge lead with its primary support increasing to 51 per cent and two-party preferred rising to 60.5 per cent. The Coalition, by contrast, failed to make inroads into Labor's lead despite the vote-rigging scandal. Coalition support fell to a low of 37.5 per cent in two party preferred terms in June 2000, but recovered slightly in the following months to sit

© Department of History, School of Political Science and International Studies, The University of Queensland and Blackwell Publishers 2001. 266 Political Chronicles between 40-42 per cent. Its primary support was of the order of 33-34 per cent. The poll results for the Liberals showed them registering 23 per cent, while the Nationals were probably under-estimated at 10.5 per cent. Support for the minor parties and independents (a crucial factor at the next election) was around 18 per cent with the Democrats attracting 6 per cent, the One Nation group registering between 3-6 per cent and the Greens at 3.5 per cent. Independents and other parties (eg, the City-Country Alliance) were polling 5.5 per cent (Bulletin, 3 October 2000 and 5 December 2000). The Opposition leader Rob Borbidge managed a personal approval rating of just 15 per cent in August. Acknowledging the "disastrous" result for his leader, the Nationals' deputy leader Lawrence Springborg attempted to rally the faithful behind Borbidge, arguing he was the best leader the Opposition had and that individual members "had to lift their work rates because they were over-reliant on Borbidge, whose approval rating was suffering as a result" (Courier-Mail, 5 August 2000). Springborg's predecessor, Mike Horan, a former challenger for the leadership position, argued that the polls understated the level of National Party support and that of its leader. Perhaps sensing a degree of resignation, he commented that the Coalition had been in the same position before the 1995 election against Wayne Goss, yet pulled off a remarkable victory. In mid-year, Premier Beattie found time to commemorate Australia's Federation by attending a London shindig along with other serving and former heads of government. Flocking around the halls of Westminster, the luminaries entertained themselves with topics of conversation ranging from the state of the hotel rooms, the insistence of Janette Howard to meet the Queen mum, and which expatriates they could manage to avoid. The occasion, costing Australians $20 million and described by Kim Beazley as a trip "that would make Marco Polo proud", was so memorable to the British Prime Minister Tony Blair that in an unfortunate slip of the tongue he confused Australians with Americans — implying perhaps former colonies are hard to distinguish. The big day for the Australian entourage was just another delegation passing through for the Brits. The Queensland Premier, perhaps conscious of the negative press, visited Ireland to negotiate a trade deal. He also ventured that state governments should take the initiative on the republican question by going ahead with electing future governors either by a two-thirds vote of the legislature or by popular election. He did not indicate whether he would follow his own recommendation if and when the time came. Marketing the Budget With the unemployment rate stuck around 7.9 per cent, the Beattie government injected another $5.29 billion into capital spending to boost employment — with projections of 61,000 jobs dependent on the funding. According to government figures, this level of commitment brought the total capital works spending to $15 billion over its first three budgets. The main capital works projects funded were in mines and energy ($1.4 billion), followed by health ($473 million) with education and police- corrective services both receiving around $250 million. But even with this level of public spending it was questionable whether Beattie would achieve his jobs target of no more than 5 per cent unemployment by 2003. The other measures included in Treasurer David Hamill's second State Budget (delivered on 18 July 2000) included: 800 additional teachers, a $114 schools renewal program, 360 extra police, a $90 million employment training program, $90 million on public housing, and $25 million

© Department of History, School of Political Science and International Studies, The University of Queensland and Blackwell Publishers 2001. Political Chronicles 167 for further implementation of the Forde Inquiry recommendations in the area of children in institutional protection. In total the government budgeted to spend $18.2 billion on the provision of goods and services for Queensland — an increase of almost 5 per cent on the previous year but a massive hike in real budget outlays over the decade Small out-year surpluses were projected ($70 million in 2002-3 and $91 million in 2003-4). The State's own- source revenues were down on forecasted levels (by $800 million) mainly due to the reduction in gambling taxes (although total revenues were up over a billion on last year's budget projections to $18.15 billion). In all, Hamill described what would become his last Budget as simply "responsible". However, one of the more noteworthy incidents associated with the Budget was the leaking of an embarrassing briefing paper to the Deputy Premier Jim Elder in late July. In the briefing paper the Treasurer's spin-doctors discussed an explicit "strategy to sell the budget by making journalists see its strengths and miss its weaknesses" (Courier- Mail, 13 July 2000). The media release advised Labor politicians to "laugh off' suggestions the budget may be in trouble. The release stated: "in all media (and therefore marketing) opportunities, be it interviews, press conferences, dinners or simply over the phone, we cannot afford to hesitate simply because of what we know internally. There is no room to be defensive, and nothing like the perception of enthusiasm to drive the agenda we want from this Budget" (Courier-Mail, 12 July 2000). The briefing paper was premised on the government's internal calculations that the State had a small cash deficit and that a looming "black hole" was possible. In the Opposition leader's Budget reply, Rob Borbidge made reference to the secret document, believing it was an admission that Queensland was going backwards. He also criticised the government's jobs record and blamed Beattie for low business confidence and investment (Hansard, 20 July 2000). Petrol Taxes, Turbulent Incidents and Stranded Tankers On advice from Treasury officials, the government floated the idea mid-year of removing the fuel tax exemption on petrol in exchange for reducing the annual vehicle registration fee. The problem for the government was that a uniform fuel tax was now federally collected, which meant that the Queensland government was reimbursing petrol distributors 8.3 cents per litre. The government claimed that petrol was being purchased in Queensland at the reduced rate and transported south into NSW — thus imposing costs on Queensland taxpayers. The new proposal was conceived ostensibly as a way of minimising this leakage of the subsidy. The Treasurer, David Hamill, persuaded the Premier to announce the idea, which received almost universal disapproval. As soon as the idea was announced it sent shivers up the collective spine of most Queenslanders who had long been attached to lower petrol prices and proud their State imposed no levy on fuel. After touring a few shopping centres and "talking to people" the Premier reversed his decision but in the process suffered some embarrassment and appeared to be making policy on the run. In this case, however, the backdown was popular. At the same time controversy arose in July over the payment of performance bonuses to senior public servants of up to $30,000 per annum (or 15 per cent of salary). While Beattie claimed that these bonuses were justified because they "saved taxpayers

© Department of History, School of Political Science and International Studies, The University of Queensland and Blackwell Publishers 2001. 268 Political Chronicles billions in improved standards", the government was simultaneously resisting a pay increase of just 3 per cent for nurses (Courier-Mail, 27 July 2000). The hospital dispute escalated into a major conflict between the government and a number of public sector unions including the AWU (Courier-Mail, 11 July 2000). Also in late July executive staff changes were forced on the government after allegations of sexual harassment against the deputy Public Service Commissioner Ian McGaw were investigated by the Criminal Justice Commission. When the report was finalised and sent to the Public Service Commissioner, Dr Brian Head, he did not appear to take any immediate action and was subsequently criticised by the Opposition leader Rob Borbidge for inaction and double standards. The Premier then stood Head down and investigated the Commissioner's behaviour, fmding that he did not provide information or advice to the government in a timely and detailed manner. The Director-General of the Premier's Department, Dr Glyn Davis, and then Helen Ringrose acted as interim commissioners, before Rachel Hunter was confirmed in the position. Dr Head was demoted and transferred to other duties in the Environmental Protection Agency, while McGaw resigned from the public service in July. The new Virgin Blue airline was launched amid much hype and promotion in early July with full schedules beginning from August. The airline, which had earlier announced Queensland as its headquarters, was able to offer flights to Sydney for $99. However, the Auditor-General would later begin investigating the circumstances surrounding the deal to get Virgin to locate in Queensland (including government assistance of payroll tax concessions, training support and other financial benefits). Other problems were created for the Transport Minister Steve Bredhauer on 2 November when a Malaysian tanker carrying general cargo ran aground on the Great Barrier Reef north of Cairns. The stranded tanker remained stuck on the reef for two weeks — after which government agencies managed to refloat it. While the reef was relatively unscathed, under the Environment Protection Act the tanker owners faced fines of over $1 million but in the event were fined $40,000 plus the costs of the salvage operation. Coalition Blues While Borbidge's leadership came under scrutiny because of the low opinion polls, his position was never seriously threatened. The same could not be said of the Liberal leader David Watson who raised the ire of his party colleagues over his stance on petrol excise increases. In November Watson indicated he opposed the Federal Coalition's plan to increase petrol excise by the full amount in early 2001 (a higher increase because of the spiked effect of the GST on the CPI). As the issue of rising petrol prices began to bite, federal Coalition MPs called on the State Liberal leader to resign when he refused to defend Prime Minister John Howard's petrol excise policy — and after he voted with the Labor government in support of a motion condemning the excise rise. Watson also attracted criticism from some senior State Liberals who began urging a leadership spill (but with no pretender other than Santo Santoro in the wings the challenge dissipated). The incident both served to underline the potency of petrol prices and the instability among the Liberal party itself. In December further destabilisation occurred in the Liberal party over the role of the State president, Con Galtos, who was pressured to resign by the opposing faction led by Santoro and Bob

Carroll. Labor also set the Coalition on the back foot over a proposal to force sitting local councillors to resign their positions before being able to contest State seats. Since 1990 councillors had been entitled to stand for State office and if successful then chose which constituency they would represent — but unlike before they could no longer hold both simultaneously. In August some Labor members (such as John Mickel, member for Logan) began to advocate to the Local Government Minister Terry Mackenroth that local councillors ought to quit prior to standing for state election (thus, causing them to calculate the risk of not winning and perhaps discouraging some from standing). The so-called "Terrymander" was treated by the Coalition and the media as an attempt to prevent National Party shire leaders from making a transition to state politics. Other Coalition members had their own headaches. In August Allan Grice, the National member for Broadwater, was charged with assaulting a brothel owner, John Trimble (who loaned him $300,000 for a luxury boat) and was summoned to appear in court. Pleading guilty, he was placed on a good behaviour bond, but it subsequently transpired that Grice had neglected to include the related business arrangements surrounding the boat on his register of member interests. Allegations of Electoral Rorting — the Shepherdson Inquiry During the second half of 2000 allegations of electoral rotting by senior Labor factional leaders dominated the media and distracted the government from its administrative responsibilities. The rorts scandal emerged from allegations made by Karen Ehrmann, a former endorsed Labor candidate for Mundingburra and a member of the AWU faction in Townsville. Ehrmann was charged with electoral fraud, but at her trial in mid-August confessed that she was only a "bit player" in a much wider vote-rorting scam involving the AWU and senior Labor party identities. She claimed a secret "slush fund" operated within the AWU to pay for ALP memberships and that lists of false memberships had been maintained to fight pre-selection battles within the ALP. Ehrmann was found guilty of electoral forgery (24 counts of forgery and 23 of uttering) and given a three-year sentence — nine months of which was to be spent in gaol before parole was available. Allegations continued to surface and the Criminal Justice Commission announced in August that a provisional CJC investigation would be held (after the Attorney General Matt Foley had asked the Electoral Commissioner Des O'Shea to review the court evidence — and O'Shea had found the allegations were of a serious nature). The Opposition had also called for an inquiry. The initial CJC inquiry (conducted by Phillip McMurdo QC, a Brisbane barrister) began investigating not just Townsville but unusual enrolments in Brisbane seats around the time of ALP pre-selections. McMurdo's report was finalised in early September, and claimed there was reasonable suspicion of misconduct and recommended further investigations be carried out against a number of Labor MPs. The CJC announced on 6 September the establishment of a special inquiry with the powers of a royal commission to be headed by Tom Shepherdson, a retired Supreme Court judge. The Shepherdson inquiry began on 3 October and heard evidence from a number of AWU factional operatives, including a disgruntled former AWU party organiser Lee Birmingham. Birmingham admitted to the inquiry that he and a small

© Department of History, School of Political Science and International Studies, The University of Queensland and Blackwell Publishers 2001. 270 Political Chronicles cell of AWU members had committed electoral fraud and made false electoral enrolments for factional advantage. Allegations were made at the Shepherdson inquiry concerning a number of sitting state MPs — namely Grant Musgrove (Springwood) Paul Lucas (Lytton), Mike Reynolds (Townsville), Gary Fenlon (Greenslopes) and Mike Kaiser (Woodridge). There were also allegations made about sitting federal ALP members. The ALP Townsville mayor Tony Mooney (the former unsuccessful Labor candidate for Mundingburra) was also named as a principal involved in the Townsville rorts. In other evidence it was alleged that a cadre of other AWU party workers had been involved in various electoral frauds including Andrew Kehoe, Joan Budd, Andrew Linden, David Barbagello, Sean Black, Joe Felice, Warwick Powell, Rodney Mugford, Lynda Fraser, Peter Aicher, and Dennis Mullins Many took the stand to admit having personally committed electoral fraud. On many occasions Beattie publicly supported the inquiry and (unlike Borbidge with the Carruthers inquiry in 1996) did not attempt to interfere with the course of its investigations. He claimed the inquiry was painful but would have longer-term beneficial effects. He also made it clear that he would root out the rorters and force them to quit the party, insisting he would risk his government rather than rely on the support of the fraudsters. The inquiry took a sensational turn when it was alleged that the Deputy Premier Jim Elder was under suspicion for having illegally signed six false electoral forms for family members in his seat of Capalaba. While the Premier was overseas, Elder called a press conference on 22 November at which he stunned journalists by announcing his resignation as Deputy Premier. A week later on the 30 November he resigned from the ALP. He was followed by backbencher Grant Musgrove (Springwood) who was forced to resign from the party. Initially, Musgrove offered only to resign from the Parliamentary Labor Party (the accepted name for the parliamentary caucus — but not itself a legal entity). However he was forced to resign from the ALP in December after a series of meetings with Mackenroth and other party officials. Neither Elder nor Musgrove resigned their parliamentary seats. The Shepherdson inquiry continued its investigations through to the end of 2000 and finally announced that it would resume in the new year for a final hearing into allegations of voting irregularities around the 1986 state election involving Mike Kaiser. Various Fallouts and Stage Exits Parliament adjourned early, finishing in mid-November with the final scheduled sitting week cancelled (even though there was a backlog of twenty-two pieces of legislation waiting to be dealt with). The Liberals charged that Beattie had been scared to allow Parliament to meet, fearing he would lose his majority on the floor of the Assembly. After the resignation of Jim Elder and Grant Musgrove, the government's official party numbers on the floor of the House had fallen to 43 (although arguably it could have relied on the support of both these disgraced members). The Coalition stated that it regarded the Beattie government as a minority government and challenged its right to make long-term appointments such as to judicial vacancies. Labor spin doctors responded that the minority issue was not actually tested on the floor of the House — principally because Labor did not re-call Parliament.

In a minor ministerial reshuffle, Beattie appointed Terry Mackenroth as Deputy Premier and Minister for State Development (retaining Sport, Communication and Information from his previous portfolio) and promoted Nita Cunningham (from the AWU faction) to cabinet as Minister for Local Government and Planning. Mackenroth (from the Labor Unity — Old Guard faction) had the support of the AWU faction — mainly as a ploy to prevent the Left's Anna Bligh from gaining the deputy's position. Beattie defended the decision to promote Mackenroth, saying he needed a "strong son of a bitch who will stand by me, to protect my back from the scum who are going to be squashed". He added, "Terry is the hard-head who will get tough — along with me — with the rorters" and will be prepared to "kick and kick" (Australian, 27 November 2000). Interestingly, after the fall-out of the Shepherdson inquiry, Rob Borbidge who had long accused the CJC of political bias, said "I'm quite happy to admit that I am pleased the CJC has restored certainly my public confidence in them" (Courier-Mail, 1 December 2000). Realising the rorts issue offered an opportunity to hurt the popular Premier, Borbidge kept challenging Beattie to call an early election as a means of clearing the air. He also offered to support the Beattie government, in the event Parliament was recalled, in passing electoral legislation to prevent future voter fraud. Business leaders likewise echoed the call for an early election, as a way of ending uncertainty and assisting business confidence. In other quarters, the Police Commissioner Jim O'Sullivan retired in October after a career of forty-one years in law enforcement. He had risen to prominence as the senior investigator attached to the Fitzgerald Inquiry between 1987-89 and was appointed Commissioner succeeding Noel Newnham in 1993. The Treasurer David Hamill also announced his intention not to contest his seat at the next State election. He had been in Parliament since 1983 — and while often regarded as one of Labor's talented front bench had also earned a reputation as a "pedestrian pollie" whose political judgement was often questionable (Courier-Mail, 13 December 2000). Hamill's announcement came after he had been passed over for the position of Deputy Premier after Elder's resignation. Hamill was still only forty-three years of age and had had enough of public life — opting to continue his career in the private sector. Hamill's resignation gave the ALP five seats for which they needed to select new candidates — and Beattie indicated he would be involved personally in selecting clean candidates. He announced a "clean team" on 20 December of five new candidates: Anita Phillips (Thuringowa); John English (Redlands); Barbara Stone (Springwood); Michael Choi (Capalaba) and Rachel Nolan (Ipswich). Finally, the former Labor member, Bill D'Arcy, was found guilty of sex crimes and sentenced to fourteen years in November. He pleaded not guilty, but was found guilty by a jury on all eighteen sex offence charges against children — three charges of rape, 11 of indecent dealing with a girl and four of indecent dealing with a boy. The crimes were committed in the 1960s and all his victims were aged between six and thirteen at the time of the incidents. He had resigned from his safe seat of Woodridge in January 2000 and been granted his full parliamentary superannuation of $660,000.