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

British chancellor of the exchequer, and had decided that Australia needed a minister resident in Europe to make the case over an extended period of time. Janette was heavily pregnant at the time, so Howard had to leave her in Australia as he decamped to Europe for three months to make his government’s case. There is no doubt that Howard approached his task with alacrity and diligence, but he was no more successful than his boss had been. Despite his lengthy stay in Europe, the protectionist European wall could not be breeched, and it stands strong to this day.

Fraser did not hold Howard’s lack of success against him, however, and within four months, Howard had become the second-youngest treasurer in Australian history, in one of the most politically spectacular and controversial ascensions to the Treasury portfolio that Australia has seen.

Not a Stopgap Treasurer

When the Liberal Party won government in 1975, deputy leader Phillip Lynch took the Treasury portfolio, little knowing he would not survive in the role long enough to face the next federal election. In 1977, suggestions were made in the Victorian Parliament that Lynch had been involved in property speculation and had benefited in deals from his position as treasurer. Questions were asked of Lynch in the federal parliament, but no conclusive case was made as to his culpability and the issue receded. However, during that year’s election campaign, the issue resurfaced in sensational fashion, with ABC Radio’s AM program broadcasting more details of the treasurer’s land-speculation activities. Lynch was slow with a comprehensive reply to the detailed allegations, partially because he was in hospital recovering from surgery. In the heat of an election campaign, this failure to quickly and comprehensively respond was fatal to Lynch’s tenure as treasurer.

Fraser himself asked Lynch for an explanation and grew increasingly dissatisfied that he was not getting the information necessary to mount an effective rebuttal. At one point, Fraser and Howard held a joint press conference to attack elements of the Labor opposition’s policy—Fraser had appointed Howard as the government’s election spokesman on economic matters in Lynch’s absence, a clear sign of what was to come. None of the questions from the attending journalists were about the substance of the Fraser–Howard attack; they were all about the Lynch scandal. Fraser’s election message was being derailed. As Howard said many years later, ‘Fraser walked from the conference with a stony face and I knew that Lynch would not remain as Treasurer through to the election.’5

By mid-November, with the election only a month away, Fraser still had not received the comprehensive rebuttal that he had demanded from his treasurer. And so, during an election campaign, he began the process of removing Lynch. Fraser’s modus operandi when removing a senior colleague was not to act unilaterally, as he was entitled to do, but rather to assiduously consult other senior ministers and ensure they backed his decision. In this case, the situation was made even more complex because Lynch was unable to meet with Fraser personally due to his hospitalisation. Fraser convened a meeting with Lynch’s senior staff member, Andrew Hay, and ministers Peter Nixon, Tony Staley, Tony Street and Howard, together with Liberal Party director Tony Eggleton. It is telling that Howard was regarded as being senior enough to be at this meeting and that he was very much on Fraser’s mind as the likely next treasurer, given that at this point he was not even a member of the Cabinet. Fraser asked if anybody disagreed with his decision to demand Lynch’s resignation, but none of those present argued for another course of action.

Fraser rang Lynch in hospital. While Lynch complained that he had not received the appropriate amount of loyalty from his boss, he nonetheless gave Fraser his resignation. Events moved quickly. The 38-year-old John Howard first heard that Lynch had resigned and that he was to be appointed in his place when the secretary to the Treasury, Sir Frederick Wheeler, rang his Wollstonecraft home and said to Janette, ‘May I speak to the treasurer?’

It was highly unusual for a new treasurer to take over while his party was in office, and for him not to have Cabinet credentials. Howard understood that the experience might be short-lived. Not only was the election campaign underway, but Lynch had only resigned as treasurer, not as deputy leader of the Liberal Party. Howard knew that when and if Lynch was cleared of any wrongdoing after the election, he might seek a return to the Treasury portfolio. Still, Howard and Fraser went drinking at various Kirribilli hotels after Howard’s swearing-in at the governor-general’s residence, the celebration only interrupted when Janette managed to track down the new treasurer in a pub to ask him when he might be returning home.

The Fraser government was duly returned in the December 1977 poll, with only a slightly reduced majority. The question of who was to be treasurer in the newly re-elected government quickly came up. In this matter, Howard acted with admirable integrity.

After the election, Lynch provided Fraser with a statement of rebuttal of the claims of improper land speculation. Fraser insisted the statement be given to two eminent Queen’s Counsels (QCs). When the QCs indicated that Lynch had done nothing wrong, Fraser asked for the advice of senior ministers. To Howard’s credit, he proffered the view that Lynch should be invited to continue as deputy leader, and as treasurer as well. Howard was taking a risk here, but an honourable one. It was, after all, open to him to argue that Lynch was too damaged by the scandal to continue in this most senior of roles.

After a few days of consideration and consultation, Fraser decided to support Lynch’s continuation as deputy leader and to let him choose his own portfolio, explicitly saying that he did not mind if he wished to continue as treasurer. Here, Fraser was almost certainly being coy with Lynch. The prime minister’s political judgement was keen: he knew that it would be difficult, if not