Aust govt leadership row

Just this morning, Mr Howard denied cutting a deal in 1994 to hand the leadership to Mr Costello.


But this afternoon Mr Costello emerged, in a brief press conference, to confirm former defence minister Ian McLachlan’s account of a meeting 12 years ago, in which allegedly Mr Howard offered to hand over the leadership midway through a second term of government.

Mr Costello said Mr Howard made the offer spontaneously during a meeting on December 5, 1994, when the Liberals were in opposition. “He told me that he intended to do one-and-a-half terms as prime minister and then would hand over,” Mr Costello told reporters in Melbourne.

“I did not seek that undertaking, he volunteered it and I took him at his word. Obviously that did not happen.”

Mr Costello said during the meeting, which was witnessed by Mr McLachlan, Mr Howard had asked him not to stand for the Liberal Party leadership “because he did not want a vote in the party room”.

Mr McLachlan, who took notes of the meeting, had said that Mr Howard told Mr Costello he only wanted to be prime minister for two terms before standing aside for his treasurer. He says the deal was struck amid manoeuvring to replace then-Liberal leader, and current foreign affairs minister, Alexander Downer.

Two years later and with Mr Howard in the top job, the coalition won the election and took government.

‘Entirely accurate’

Mr Costello also said he had not encouraged Mr McLachlan to make any revelations about the 1994 meeting. “But his account is entirely accurate,” he said.

“That was precisely what happened. They are the full facts of what happened. “I have a very clear recollection of the events. You can interpret them as you like but that is the full truth of what happened.”

But when asked by a journalist, Mr Costello stopped short of calling Mr Howard a liar, saying, “Look, I’m telling you what happened. I’m not making any allegations against anybody, I’m telling you what happened and, look, you can interpret whatever you like.”

The prime minister has clearly denied ever striking such a deal, telling reporters earlier “There was no deal made.”

No contradiction

But he has replied to this development, through a spokesman, saying there is no contradiction between the statements, but Mr Howard did not dispute Mr Costello’s claim.

“Nothing said by Mr Costello today has in any way altered the position that no deal was made about a leadership transition,” Mr Howard’s spokesman said.

“This is the position that Mr Costello and I have always maintained.”

1000 jobs go at Coles

But the company says plans to employ 1,600 workers for new distribution centres, at different sites, means that there will be no overall net loss of jobs.


Coles Myer informed the 440 staff at the Somersby distribution centre on the NSW Central Coast and about 580 workers at Hampton Park, in Melbourne’s south-east, that the centres would close.

Although Coles has pledged to pay out all staff entitlements, severance pay and edeployment services, the National Union of Workers (NUW) says the closures are a traumatic blow to the communities.

“It’s a lot of long-term workers, most of them are family people … it’s a really traumatic thing for the locals,” union spokesman Mark Ptolemy said.


Mark Launt, who has worked at the Somersby centre for 12 years, said the closure was devastating, “Seventy per cent of us are families with kids and mortgages … people are devastated, you can just see the look of loss on their faces.”

Coles Myer says six of the new distribution centres, announced in 2003, are under construction and that through these new centres 1,600 people will be employed.

“Overall in our supply chain transformation program we anticipate no net loss of jobs,” Coles Myer spokesman Scott Whiffen said.

Mr Whiffen said the company will help the workers affected, “We have made the decision to close these centres now to minimise uncertainty for our people and allow us to get new arrangements in place before the peak retail trading period.”

The centres will be shut over the next four to six weeks.

Aust leadership row unresolved

The two men appeared at a party cabinet meeting for the first time since the quarrel began, and then Mr Howard says they spoke privately for about half an hour.


Mr Howard told reporters after the meeting, that during their discussion Mr Costello did not specially ask him to stand aside immediately or before Christmas.

Mr Howard says he does not believe their professional relationship has broken down and as far as he’s concerned its business as usual.

“It is the overwhelming desire of the parliamentary Liberal Party … that Mr Costello and I in our current positions continue to work for the benefit of the Australian people and for the benefit of the Liberal Party,” he told a packed press conference this afternoon.

Mr Howard said that obviously Mr Costello would like to see a favourable leadership change before the next election, but he declined to comment when asked if he would run for election again saying only “I haven’t called the news conference to talk about my medium- to long-term future.”

No resentment

Mr Howard said he harboured no resentment towards Mr Costello for his leadership ambitions, “There is no personal venom that’s ever been part of our relationship.”

He admits that the public quarrel may hurt his party in the short term, “We’ve had bad days before. I think the public makes a judgment over a longer period than two days.”

Mr Howard said he was confident his working relationship with Mr Costello would be restored. “We have been a very strong team. We’ve, obviously, had a bad few days.

Mr Howard also refused to comment when asked if Mr Costello’s recent behaviour had hurt his chances of becoming party leader, but did say he still believed that if he was to fall under a bus, Mr Costello was the person most likely to succeed him as prime minister.

Adding quickly, “I am still very careful about crossing the road.”

Silent Costello

Mr Howard again insisted there was no leadership deal with Mr Costello.

A smiling Mr Costello emerged from the federal cabinet meeting in Sydney refusing to say anything more about the leadership to the pack of reporters waiting outside.

Mr Costello had little more to say when he touched down at Melbourne Airport.

A confident treasurer was met by a small posse of waiting journalists, but did not reveal the contents of the conversation he had with Mr Howard.

“I had a full-on press conference this morning, I answered all the questions that the press had and what I said was entirely accurate about what has happened in relation to these matters,” he said.

Mr Costello also dodged questions about his future.

Costello practices patience

Following a half-hour meeting with Mr Howard yesterday to discuss the Liberal Party leadership, and the treasurer’s ambition to possess it, Mr Costello has ruled out giving up his portfolio and moving to the backbench, saying he’s committed to public life for the long term.


But he’s refused to commit himself to standing as treasurer again, if the coalition wins the next election.

Mr Costello also says he Mr Howard that he believes the Liberal Party would be best served by a smooth transition.

But when asked if he was suggesting he would take no action to secure the leadership, Mr Costello only said that he was committed to Australia’s long term future. “And I want to give leadership in this country on the issues that will concern us in the 21st century.”

No reprimand

Mr Costello said Mr Howard did not reprimand him for confirming to the media secret talks held 12 years ago which allegedly contained a leadership deal between the two men.

He also brushed off the prime minister’s suggestion that he was guilty of “hubris and arrogance” saying, “You get called a lot of things in politics so I don’t let that worry me in the slightest.”

But the public spat may have damaged Mr Costello’s support in the party room, though he’s denied his actions were an attempt to undermine its choice in picking a successor to Mr Howard.

“This suggestion that somehow I don’t value the partyroom, no-one values the partyroom more than me. I’ve stood for election in the partyroom in 1993, in 1994, 1998, 2001, 2004. I absolutely value the partyroom.”

Speculation and mischief

Liberal backbencher Warren Entsch says Mr Costello has now damaged the government and himself, but he also says the prime minister’s failure to declare his intentions over the top job is fuelling speculation and mischief.

Capitalising on leadership problem in another party, federal Labor leader Kim Beazley has accused Mr Costello of orchestrating the leak about the meeting, so that the treasurer could put the issue on the agenda.

Mr Beazley has again called on Mr Howard to reveal whether or not he will run in the next election, telling Southern Cross Radio, the leadership crisis is keeping from their proper jobs, “They’re not concentrating on things which really matter to ordinary Australians while they’re fighting each other… There’s an awful lot that’s just not being done while Howard makes up his mind whether or not he wants to keep on being prime minister.”

Mr Beazley called the current crisis a sign of dangerous instability within the Howard government. When asked who he would like to go head to head against in the next election, he told reporters he wanted John Howard.

“What we need from Howard now is that at least he is prepared to take responsibility for the product of his deception, and that means he contests the next election, holds himself accountable.”

Banana drought nearing end

The shortage, caused when Cyclone Larry wiped out 80 per cent of Australia’s banana crop, has sent prices soaring to record highs.


In the last few months, bananas have averaged A$12 to $15 a kilogram nationally, before the cyclone prices the favourite fruit rarely topped $3 a kilo.

But relief for consumers is in sight, the Australian Banana Growers Council says the shortage has bottomed out and prices are unlikely to go any higher. “I wouldn’t expect the quantities to go any lower,” council chief executive Tony Heidrich said.

“We should start to see some reasonable quantities flowing back onto the market in mid-September, and it should be back to normal by mid to late December. Prices should be back to pre-cyclone levels by then.” Mr Heidrich added.

Since the Cyclone Larry destroyed so many crops in north Queensland, the country’s biggest banana growing region, consumers have received most of their bananas from the sub-tropical zones of southern Queensland and northern New South Wales.

Australia’s other two growing regions – the Northern Territory and Carnarvon in Western Australia – produce only a small amount of fruit.

The Banana Growers Council has encouraged north Queenslanders getting back into the industry to stagger their production so that the supply drought doesn’t turn into a glut and drive down prices.

“If everybody brings their crop in at the same time then we’ll also have another shortage in the middle of next year,” Mr Heidrich said.

Mr Heidrich said many growers had learned from the oversupply after crops were devastated by Cyclone Winifred in 1986, when a flood of fruit drove prices below the cost of production.

“More people went broke as a result of the glut 12 months after Cyclone Winifred than actually went broke during the cyclone,” he said.