The Money Men by Chris Bowen (superbooks4u .txt) 📕

Swan and His Prime Ministers

The eruption involving Rudd and Swan in June 2010 and the flare-ups in subsequent years deserve to be recorded as the most spectacular of all breakdowns in relations between an Australian prime minister and treasurer. When Rudd challenged Gillard in his first, unsuccessful bid to regain the prime ministership, Swan issued a public statement that bristled with disdain for his former friend. This raises the question as to how effective were Swan’s working relationships with the two prime ministers he served under. Given Swan supported the move to oust Rudd as prime minister in June 2010, it would be tempting to conclude that his relationship with Rudd was ineffective throughout that first term in office. This, however, would be incorrect.

Rudd and Swan were the first prime minister – treasurer duo to have attended the same school, although Rudd’s presence at Nambour State High School was briefer than Swan’s and they didn’t know each other in their youth. They first worked closely together in the late 1980s, when Swan was secretary of the Queensland branch of the ALP and Rudd was chief of staff to Labor leader Wayne Goss and then director-general of the Premier’s Department. The Goss–Rudd–Swan troika was a powerful collaboration that determined the strategy of Labor’s return to power in Queensland after an absence of thirty-two years, and then the running of the new government’s political strategy. As a result, Rudd and Swan became close friends.

Both men were candidates in the 1996 federal election, Swan having entered parliament in 1993 as the member for Lilley, and Rudd running for the nearby seat of Griffith. On that occasion they both lost, but they were allies in the Caucus when they won their respective seats in the 1998 election. They shared a Canberra house during parliamentary sittings with another MP elected in 1998, Bernie Ripoll.

Their first significant falling-out came in 2005 when Swan refused to support Rudd’s unsuccessful bid for the party leadership, preferring to back former leader and close friend Beazley. Swan felt that Rudd’s candidacy undermined Beazley’s chances of winning, and their relationship soured; they parted ways as Canberra housemates. Swan continued to be a key ally and organiser for Beazley when Rudd challenged his leadership in 2006. (I remember telling Swan in the run-up to the ballot that I would be voting for Rudd. He told me he respected my decision, and my honesty in telling him, but that he thought Rudd was fundamentally unsuitable for the leadership.)

On winning office in 2007, Rudd and Swan developed an effective, if not a warm, working relationship. For example, the first major speech Rudd gave on economics was the Perth speech on inflation at the start of 2008, mentioned in the section above. Of this speech, Swan later said, ‘This was a very good speech, closely worked on by many in his office and mine. It was an early example of both our offices working as one and helped form the basis for what would evolve into an effective policy machine over the coming years.’20

Rudd established a ‘kitchen cabinet’, the SPBC, which consisted of just himself, Gillard as deputy prime minister, Swan and Tanner. Inevitably dubbed the ‘Gang of Four’, it was this group that made all of the big decisions of the Rudd government. The dominance of the SPBC would eventually create difficulties with Cabinet colleagues, sparking their resentment. But in the intense environment of the GFC, it was the perfect decision-making forum. These top four ministers were very much a ‘team of rivals’, having had years of enmity and distrust among them, but they fashioned themselves into a professional and effective team. As Tanner writes: ‘As a mechanism for dealing with the Global Financial Crisis, the SPBC worked extremely well.’21 Kelly likewise observes, ‘The truth is that for most of their time in office, Rudd, Gillard, Swan and Tanner worked well together.’22

The GFC threw Rudd and Swan together in the battle of their lives. A crisis suited Rudd’s management style and he exercised considerable prime ministerial authority, but Swan was not put out by Rudd’s assertiveness when it came to policy. This was largely because they both agreed on the fundamentals of what had to be done. Swan would later say of Rudd during this period, ‘I freely give him credit for the role he played in the way we dealt with that imminent threat to the nation’s economic security and long term prosperity.’23

There was a division of labour between Rudd and Swan, and the work was gruelling. Hours and hours of meetings working on the various GFC responses were just part of the burden. Plenty more hours went into preparation and research. Even Rudd and Swan’s biggest detractors would need to concede that each had a prodigious and remarkable work ethic. Chalmers is right to conclude that ‘Never before has the Australian Treasurer carried so much of the burden of Australian foreign relations as he did during the first five years of Wayne Swan’s tenure and especially during the deepest troughs of the GFC.’24 In 2008 alone, Swan visited the United States in April; France, the United Kingdom and China in June; the United States again in October; Brazil and the United States in November; and China again in December.25 Swan’s seven visits to China as treasurer surpass the visits to that country of all thirty-seven of his predecessors combined.26

Swan is not gilding the lily when he says of himself and Rudd that ‘we were an effective team during the GFC from 2007 to early 2010’.27 Importantly, Rudd was willing to back Swan’s judgement on the need to introduce a profits-based mining tax, a political risk that many prime ministers would have forbade their treasurer from taking. They would both suffer a political cost for the conflict that would ensue, but it was Rudd who would pay the higher price.

Swan was not a key player or agitator in the move to topple Rudd as prime minister in 2010, but he