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The Howard Years -

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This program is not subtitled This Program Is Captioned Live. Good evening. Virginia Haussegger with an ABC News are predicting another big with an ABC News update. Economists rate cut from the Reserve Bank are predicting another big interest tomorrow. A cut was the consensus yesterday tomorrow. A cut of 75 basis points today's new data was the consensus yesterday but weakness in the manufacturing today's new data showing record and a sharp fall in inflation may weakness in the manufacturing sector force the Reserve to cut rates by as much as 1%. Australians are getting out of much as 1%.. A fortunate few Thailand after being political protesters closed the Thailand after being stranded when country's two airports. Around them have boarded buses bound for country's two airports. Around 300 o Phuket where they'll eventually be flown back home. The Indian Government says all the terrorists responsible for the Mumbai attacks growing anger in India about the were of Pakistani origin, but there's

Government's failure to prevent the

attacks. It's now promising

overhaul of the anti-terrorism attacks. It's now promising an measures. Australia has won the second Test

innings and 62 runs. It seems the second Test against New Zealand by a aussies could do no wrong safe hands of Ricky Ponting to the aussies could do no wrong - from the bowling of Brett Lee, who took

wickets for the Test. And Canberra's bowling of Brett Lee, who took 9 weather - a fine day, starting with degrees, warming up to 24. Sydney - 26, Melbourne - 21, Adelaide - More news in an 26, Melbourne - 21, Adelaide - 24.

any time with you today. Sorry I haven't been able to spend You'll find out in a minute why.

It was the spring of 2001 a political roller coaster. and John Howard had been on just about everything We went through including political strength, turning to political challenge turning to political adversity, it was a term with all seasons. But events in the United States of politics worldwide. would change the face the nation, The War on Terror would divide a major election victory deliver John Howard most powerful men in the world. and win the respect of two of the who plays in a scrum He may not look like somebody on the Australian rugby team he's plenty tough. but he was, ah, believe me, and he was with you, If you were difficulty how difficult it got you knew it wouldn't matter he would still be with you. On the 8th September 2001, John Howard arrived in Washington

the new US President, George W. Bush. ahead of his first meeting with it's very nice to be here. Thank you very much, had a packed itinerary waiting, The Australian embassy the capitol's movers and shakers. starting with a BBQ with and it was a wonderful occasion. It was the Sunday night, bar the President, were there. It's as if the whole administration, I mean there was music. if you like, the world was good. There was cheerfulness and, ADVANCE AUSTRALIA FAIR PLAYS finally came face to face. The next day the two leaders may God bless America May God Bless Australia and I first met him on September 10, 2001

and we were having a celebration of the US-Australian relationship and, you know, I liked him instantly. like a no nonsense guy. He was... he seemed House and had a long discussion. We drove up in his car to the White of the United States. Australia is a great friend No mention of terrorism. We talked about Russia and America. broad Middle Eastern situation We talked about, you know, the

in a tangential kind of way, and about Australian-US relations. As dawn broke the next day,

was thousands of miles away. John Howard's major worry of September very vividly. I remember that morning of the 11th I went for a walk. from Peter Costello. I took a phone call He called me actually about back in Australia, to talk about what we were worrying which was the collapse of Ansett. And then I continued on to my hotel. for a news conference And I was getting ready with Australian journalists secretary, knocked at the door and Tony O'Leary, my press

and before he'd talked about them to talk about arrangements the World Trade Center. he said a plane has just hit Oh Shit!

an appalling accident. At that point it seemed like he knocked on the door again And a few minutes later the other tower and he said another plane's hit it's in flames. and the whole building, And both of us knew instinctively that there was, you know, it wasn't an accident. something far more than an accident, The terror attacks weren't over. Washington was the next target. Can I just say... looked out the window We heard a loud explosion, and the Pentagon had just been hit. where the Prime Minister was I immediately asked in the floor below. and he was having a press conference I pulled the curtains aside rising from the Pentagon and you could see the smoke and everybody started to think, this is some kind of attack. just rounded every one up. The Secret Service the Secret Service, George Edwards, The head of my security detail, "Look, we're getting out of here. came and said, I don't intend to start today." I haven't lost anybody yet and Washington DC on that day. It was a surreal experience, the the city was numb. When we walked out into the street, We were numb. On the other side of the world John Anderson, took charge. the acting prime minister, I mean, like so many other people, just some horrific spoof, I thought this must be it can't really be happening. You knew this was something big, in our lifetime. something we'd never seen before It was chilling footage. the next morning. I went in at about 5.30 We had the first of many, many meetings with all the security people that morning. The mood of the meeting was sombre. People weren't sure if this is the precursor to some sustained activity. We were expecting a second wave of attacks of some description. We had to account for every plane that we knew would be in Australian air space

and we had to begin securing Australian airports in case there was some kind of attack on Australia. As the dust settled around the World Trade Center and the Pentagon, the enormity of the attack began to sink in. There would obviously be a massive hunt to find out who was behind this. So while we didn't know definitively during that afternoon exactly who was responsible I think we had a pretty clear idea that it was from Afghanistan and that al-Qaeda was involved.

John Howard had a ringside seat at one of the most dramatic moments in history. Then, as America went into lockdown, the Prime Minister kept his appointment at a defiant joint sitting of Congress. John Howard's gesture in going - you can scarcely exaggerate the importance. It's it's a moment that everyone in the Congress will remember. The chair wishes to acknowledge, however, the presence of the Prime Minister here today. It was quite a moving moment. I was the sole foreign representative and the speaker acknowledged me. I remember being very touched by the standing ovation that I got It was a very, very emotional moment, I think, probably one of the most emotional moments of his prime ministership. Having been in Washington and seen it first hand, I think it got to him emotionally. It wasn't just his head, it was his heart. We have to accept that this is an occasion

where we should stand shoulder-to-shoulder with the Americans, because this is not just an assault on America, it's an assault on the way of life that we hold dear in common. This was the equivalent of planes flying into the Sydney Harbour Bridge or the Opera House. And I only had to say that for people to realise how we as Australians would've felt if that had happened.

By the time the prime minister headed for home, his resolve was even firmer. MOBILE PHONE RINGS My mobile rang and it was John Howard calling from Air Force 2 and we started discussing this whole question of whether we should invoke the ANZUS alliance. The ANZUS alliance says

that if there's an attack on the metropolitan territory of either of the parties, the Australia or US, it's considered a joint attack requiring consultation for a joint response. Well, what that meant was

that if there were some kind of military action we would be part of it. He instantly realised that we faced a world different, you know, than we thought it was going to be. And there was no doubt in my mind from the day after the attack

we would be beside the Americans in retaliating. I had no doubt. And so in many ways our friendship was forged in fire, the fire of war. Good morning. Morning. If John Howard had new and powerful friends overseas

he also had renewed popularity at home. God's blessing on every decision you make. That's very nice. Thank you. On the 5th of October, 2001, when John Howard called the federal election, he would be clear favourite to win his third term in office. This is a time, of course, to choose strength and purpose and stability over the alternative. At a time of bewilderment, a time of world crisis, the natural tendency of the voter is to stay with the incumbent. How are you? Great to see you. Well, the mood I picked up as I went around the country was increasingly that at the end of the day people would stick to the government because they felt we were handling the economy very well

and they also agreed with our position on border protection and on national security generally.

If border protection was a vote winning issue for the government fate was about to intervene. Out at sea, Operation Relex was in full swing, and the navy was busy turning back boatloads of asylum seekers. The day after the election was called, HMAS 'Adelaide' encountered a sinking boat, codenamed SIEV 4, packed with people heading for Australia. The 'Adelaide's commander, Norman Banks, believed that some adults were throwing children overboard. That claim was passed on immediately to the government. It was almost a throwaway line that was the first report they received. It had no policy implications. It was it was a piece of colour, if you will, somebody threatening to throw a child overboard. But in the heat of an election campaign this piece of colour would soon become much more.

The government launched a media offensive. A number of children have been thrown overboard. But our policy remains quite resolute. I regard these as some of the most disturbing practices I have come across in the time I've been involved in public life. We are not going to be intimidated out of our policy by this kind of behaviour. I want to make that very clear. It's interesting that on the morning that the report about children overboard was made to me it was already in the media.

I mean, ministers were already in the public place talking about it before I'd even heard about it. If I had been seen to sit on a report as serious as this, I would've been seen to be derelict in my responsibilities. The government's haste in grabbing the headlines would soon put it under pressure. The navy had taken photos of people in the water and the media were clamouring to see them. Then I rang the CDF and I said, "Look, I've got press people ringing up saying you've got photos, that you've got this, you know, this dah, dah, dah. I said, "Is there any reason..." And the press were calling for us to release the photos. So I said, "Is there any reason why we can't just release these photos? Now joining us in the studio is the defence minister, Peter Reith, welcome back to the drive program. Thank you, very much.

You've got some photos to show us, have you? It did happen - the fact is that children were thrown into the water. But the photos Peter Reith offered as proof did not show children being thrown in the water on the 7th of October, they showed people being rescued the following day. Somewhere between the Defence Department and the minister's office the captions that had made this clear had been removed. The navy also released photos this afternoon of two young asylum seekers floating in the sea as proof that they were thrown overboard. When I saw pictures on the '7.30 Report' without the headings on the pictures, I phoned Chris Barrie to say these are the wrong pictures. These are pictures of people being rescued. These are not pictures of people being thrown in the water. I said, "Will you tell the minister?"

He said, "Yes, I'll tell the minister." Peter Reith and I had a testy conversation about it. I don't think I ever had a testy conversation with Chris Barrie about anything. I really don't. I think Reith was annoyed that this thing seemed to be not fixed, not organised, not under control. So Peter Reith was, you know, he was wanting to put out a story and make a big thing of it as minister and somehow or another

the department didn't seem to be able to get its act together. I think that was the testiness. Well, I don't remember ever having a conversation with Chris Barrie about the validity of the photos. By now, real doubts had surfaced within Defence about whether any children had been thrown overboard at all. I would have said that three days after Banks may have said that there were children being thrown in the water, he had reached the conclusion that there were not children being thrown in the water and my expectation was that Chris Barrie and others would have had the same information. Crucially, the chief of the Defence Force did not change his advice to Peter Reith. There are, I said two reports where there are doubts that there were children thrown overboard and I have made it clear that unless somebody gives me evidence to the contrary, my advice to the government stands.

So he was giving Norm Banks' first statement the benefit of the doubt right through. But Norm clarified his statement about three days after his first one. Why Chris Barrie didn't know or wasn't told is - I don't know. But it was clearly a problem. I think it was reasonable for Chris Barrie to form the judgement that he did and it was certainly reasonable for me to rely upon his judgement, but, you know, it's just a difficult situation, things happen in a hurry, people you know pass the information on and that's what happened. In the days that followed, no one in the defence force or the government took the time to clarify the truth. The question is why? It wouldn't be hard for me to say that in a political context the story was playing into the stance that the government of the time was taking. And therefore to get more mileage out of it you build in stops to let information be clarified because it's in your own interest to keep the story running. I don't believe that this information was deliberately used and manipulated. We were given it, we believed it. Philip Ruddock and I initially made some statements based on it. And then we stopped talking about it. And frankly it went right out of my mind. It wasn't a big issue.

I had other issues on my mind. Indeed he did.

The United States had invoked article 51 of the UN Charter enabling it to respond to an act of aggression. There was a worldwide determination to hit back at those deemed responsible for the September 11th attacks and it was clear Australia would join a global coalition in taking action against Afghanistan. The trail was traced back to Afghanistan and to al-Qaeda and the Taliban. Last night, President Bush telephoned me - he indicated that the United States would like to activate the commitment that Australia had made to join the coalition force. I indicated that Australia would respond. Good afternoon. Great pleasure to be here. Thanks a lot. I'm very well. I'm going to bless you. He is my colleague, he is my friend, will you welcome Mrs Howard and the prime minister of Australia, John Howard. John Howard now had two powerful weapons in his bid for re-election - national security and border protection. We will decide who comes to this country and the circumstances in which they come. I came up with that line on the spot. I mean, there's a lot of mythology about some of my lines. It was not research driven. It was not something I'd thought about before or discussed with anybody before, it just came to me. As he said it I thought that's the line that's going to capture the mood of the population. It was incredibly powerful, incredibly powerful. I certainly thought it was smart politically

but on a human basis I was concerned. When I first saw the slogan I just went gulp. It wasn't about a dog whistle, it was about a sense of sovereignty and a sense of control and you got that through John Howard. I hope nothing goes... I hope I don't. Three days out from the election John Howard seemed headed for certain victory. But doubts surfaced in the media about what really happened with SIEV 4. Now the government was being accused of lying about the children overboard affair. RICHARD MORECROFT: A new controversy over claims that asylum seekers threw children into the sea has overshadowed John Howard's second last day of campaigning. With the Chief of the Defence Force, Chris Barrie, out of the country, the acting CDF, Angus Houston, took a bold decision to re-open the children overboard issue. As he told a Senate inquiry some months later, he rang Peter Reith in an attempt to finally clarify things. Fundamentally, there was nothing to suggest that women and children had been thrown into the water. It was clear to Angus Houston that the information was there and ought to be brought to the attention of the minister. I mean, as I heard it from Angus, you know, he had a couple of days in Chris's office. He had a bit of a rifling around the papers. He'd sort of had a bit of a worry about what had happened and my answer was, "Well, mate, you'd better check it out properly and you should talk to Chris Barrie

because he was the one who did it all, he's been in charge of it, you talk to him." Oh, look, I think Angus did exactly the right thing. I mean it was his call, he had all the power and authority of the CDF of the day. But I have no regrets whatsoever saying to Angus, which I think any defence minister would say, is, "Look, I've had advice from the Chief of the Defence Force, he's out of the country for two days, it can wait until he gets back and you can talk to him. And then the ball is in their court." On reflection I think the government, Peter Reith I guess, or maybe John Howard chose to accept whichever advice they liked which we all know was mine. Look, I'm sorry it got so confused and perhaps wasn't handled well but, and I'd have to say not just by me but, you know, including others around me, But I wasn't, I mean, this idea that this was sort of a devious, nasty, brutal tactic by the government for political advantage is just completely untrue Minister, you might like to... Don't fall in. Peter Reith's decision not to respond to the advice of Angus Houston was the final act of his political career. Waddya think? You like it? Yeah, I like it. He retired at that election and the government went to the people defending the claim that children had been thrown into the sea. Thank you. Great to see you. VOTER: You miserable little man. You've got no vision for Australia. On the 10th November 2001, the Coalition was returned with an increased majority. John Howard had won a third term. People have said, "Would you have won in 2001 without Tampa, without September 11, without border protection?" The answer is yes, I believe we would've won without any of those things. There was a strong swing to us amongst the traditional Labor voters

who wanted border protection

and believed that only John Howard could deliver it. In a phrase - John Howard was the man for the times. The times did seem to suit John Howard.

He had formed a close friendship with the most powerful man on earth. But in this third term where would that friendship lead? States like these, and their terrorist allies, constitute an axis of evil, arming to threaten the peace of the world. By seeking weapons of mass destruction,

these regimes pose a grave and growing danger

For me and I think the same was true for John Howard after September the 11th, you know, we just had a very clear view that this was a security threat faced by all of us, that we stood with America and that was that. Iraq's track record suggested that it might, as a country, irresponsibly hand WMD capacity to terrorist groups

and that was a view that I had. It was a view that Tony Blair had and it was a view that the...

some of the intelligence people had, not all of them, but some of them. I have to say even up until the day I retired I never saw any evidence that said suddenly we had to go off and do a job in Iraq. If weapons of mass destruction were the reason for action against Saddam Hussein, he had the ability to resolve the issue. He could simply allow UN weapons inspectors to return to Iraq. But Saddam Hussein refused and seemed intent on playing a game of brinkmanship with the United Nations. I had - certainly in late 2002 - had not decided and I'm sure John hadn't either,

that you support military action, but you decided that it was one or the other, either done peacefully or done through military action but it had to be done. I didn't at any stage in 2002 say, "George, I guarantee, come what may, if you invade Iraq we'll be part of it." But he would've been entitled to believe that there was a real possibility that we would part of it and we planned accordingly. Well, I just took the man for his words. One thing about Howard, it's easy to understand where he's coming from and when he gives you his word, he'll keep it. The irony of all of this is that if Saddam Hussein had chosen to comply fully in, say, June 2002 with those mandatory Security Council resolutions then who knows whether he would've survived. (ALL CHANT) Shame, Howard, shame. (ALL CONTINUE CHANTING) In Australia, opposition to an attack on Iraq was growing. (DEMONSTRATORS CONTINUE SHOUTING) WOMAN ON TALKBACK: Hello. I'd just like to ask the prime minister that before he commits our sons to any war overseas, I hope he'll include his own.

Well, I've been asked that... (WOMAN HANGS UP) There wasn't a lot of support in the Australian community for us being involved against Iraq. I knew that. There was no doubt in my mind that John Howard understood the stakes. In other words, you know, some leaders didn't really fully appreciate the struggle. And I call it an ideological struggle because it is. But government is about policy not just politics. And it was good policy to get rid of the threat and it's good policy to see the back of Saddam Hussein. If John Howard still had any doubts about following America the next major terrorist attack would harden his resolve. DOWNER: I was rung in the very early hours of the morning to be told that there had been an explosion in Bali and it was possible some Australians had been hurt. It kept rolling through my mind,

this will not stand. You cannot do this to our countrymen and women. Outrage. 202 people were killed, including 88 Australians. Many more suffered terrible injuries. PETER COSTELLO: This was Australia as a terrorist target, unambiguously, for the first time. I think up until the Bali bombing people thought the Americans were the terrorist targets. After Bali they knew Australians were the targets of terrorists. I felt sick because it was sort of holiday central for so many young Australians. He was then going through what, you know, I went through and other Americans went through when - I mean, the reality of this extremist movement came home when he had to hug and console those who'd lost their loved ones. I know it's a corny thing to say but any innocence that we may have retained about the realities of the modern world was totally blown away that morning in - or that evening in Bali. As the shock waves from the Bali bombing subsided, John Howard faced a difficult question. Had his support for the United States made Australians a target? I knew he'd come under a lot of pressure, you know, because that's what happens. If people say why has this been done to us, you know, maybe it's because we've been doing the wrong - you know, there's all sorts of, you know, there's all sorts of speculations about it, but in the end what you're left with is a prime minister in that situation. There's a lot of grieving families and a nation that is shocked and that's a difficult thing to deal with. REPORTER: 22-year-old Josh Deegan was one of the nearly 200 people killed in the Bali bomb blasts.

Six weeks later his father has hit out at the Prime Minister blaming his son's death on Australia's support for the United States. Australia seems to be following that blindly. And... ..we are as a country a soft target. If I'd lost a son and I had a particular political view of the world

I'd link the two and I'd express my feelings. I mean, I don't have any difficulty, although I might not agree with him and I clearly didn't agree with him for a moment, I understood why he would react in that way. (SPEAKS ARABIC) By early 2003, war clouds were looming. For Australia, any final decision to join an invasion force would depend on having evidence supplied by America and Britain that Saddam Hussein had weapons of mass destruction. Knowing this, John Howard left Australia

for a final round of diplomatic talks. I wanted to have some last-minute discussions with President Bush. I knew that if there was going to be a military operation it was going to occur some time not long after I got back. I wanted to have those discussions with both the American president and the British prime minister. I wanted to be satisfied about the consistency of the arguments and our understanding, I guess, of any last-minute intelligence. Saddam's got to disarm. If he doesn't, we'll disarm him. From Washington and London the message was clear. Saddam Hussein had weapons of mass destruction. The threat that preoccupies not just this country but Australia, other countries right throughout the world, is the threat of disorder and chaos as a result of terrorist groups or rogue unstable states

with chemical, biological potentially nuclear weapons capability.

John Howard also met the head of the British secret service. They had an extended discussion about the information that underpinned the assertions or the comments that Blair and Bush and others were making about Saddam Hussein and weapons of mass destruction and the like. What came through in that conversation to me was that they seemed to be very certain of their information and very willing to vouch for their sources.

We accept intelligence on so many things around the world

which are outside of our own capabilities to prove or disprove. We accept it every day. I mean, you get a crystal clear satellite photograph of a tin-roofed warehouse in Iraq and you couldn't ask for a better image, but with an arrow pointing at it saying possible anthrax storage facility. Now that's the part that's imperfect. (PROTESTERS CHANT) No war! No war! The prime minister would fly home to the biggest anti-war protests in the country's history, convinced that Iraq had weapons of mass destruction. I knew it was unpopular in Australia. It was getting to be unpopular in America but the thing about John Howard was he wasn't willing to chase popularity polls to sacrifice doing what was right. This was to me a classic example that from time to time, if you believed something is right,

you have to go against public opinion. And this was certainly the case with Iraq. On 18 March 2003, with Saddam Hussein refusing to comply with a United States ultimatum to leave Iraq, President Bush rang John Howard and asked Australia to be part of the invasion force. I'd indicated that I needed a proper request and that we'd have to have a Cabinet meeting. It was a worrying period, is the word I would use when the Cabinet made the decision. It was in a sullen mood. I went around and I asked each minister, because this is going to war and it was controversial, and everybody went along with it. To my mind the critical thing was the government was going to have to account to the people for any further terrorist incidents. We were worried about what would happen first and foremost

to our soldiers and sailors and airmen and women. I've always believed in the old clich that evil prevails when good men do nothing. Everybody was pretty sombre and nobody was gung-ho but there was a quiet resolve and a determination and a belief that we'd done the right thing. Good evening. The government has decided to commit Australian forces to action to disarm Iraq... ..because we believe it is right... .it is lawful, and it is in Australia's national interest. Of all the decisions I took as prime minister going into Iraq was the hardest, the toughest, the most difficult. I have no doubt that if the whole thing had gone bad it would've been the end for me. I can remember thinking to myself, well, if this whole thing goes bad

they'll know who to blame and I'll take responsibility for it. 2,000 Australian troops were involved in the invasion of Iraq, less than 1% of the coalition forces. To the nation's relief, no Australian soldiers were killed in action. Major combat operations in Iraq have ended. In the battle of Iraq

the United States and our allies have prevailed.

CHEERING AND APPLAUSE The day after George W. Bush declared a premature victory in Iraq,

John Howard arrived in Crawford, Texas, for the full VIP treatment at the President's private ranch. These two men had known each other for only 18 months but the war had sealed a friendship. Howard is a walker. He likes to walk and he's not an easy guy to walk with because he keeps a pretty darn good pace. We stayed with them for the weekend and it was a very enjoyable occasion. We loved showing them our ranch.

You know, it's just a special place for me and Laura, it's our home. Two things were apparent. One was the genuine depth of the personal relationship between the prime minister and the President and the extent to which the President wanted to make sure that the prime minister was fully briefed on any issue on which he wanted to know about and so on. The next day the two leaders held a joint press conference. We were essentially expecting a fairly straight up and down press conference. The prime minister has showed he's not only a man of steel, he's showed the world he's a man of heart as well. And then Bush made the reference to John Howard as the man of steel. It came from my immense vocabulary. My friends might agree with it. My enemies will scoff at it, won't they? There's an old saying in Australian politics - if you want a mate get a dog. That's right. PROTESTER: Shame on you, John Howard! Loser! John Howard's enemies were about to be handed more ammunition. Saddam Hussein did not have weapons of mass destruction.

The primary justification for the war did not exist. REPORTER: Today, the inquiry by former intelligence chief Philip Flood confirmed Australia's spy agencies got it wrong. The intelligence was thin, ambiguous and inaccurate. And Australia shared in a general intelligence failure. Everyone assumed from the Secretary-General of the United Nations downwards, everybody assumed that Iraq had weapons of mass destruction. That really wasn't a subject of conjecture. I was very surprised that they weren't found. I often think the simplest thing for us should've been, in retrospect, is just to have published the intelligence assessments. Rather than actually the government compile a report about them, what we should actually have done was just publish them. The intelligence assessments may in the final analysis have turned out to be defective because stockpiles of WMD were not found although programs and the capacity to generate stockpiles were certainly found. But we didn't take the country to war based on a lie. We didn't invent the intelligence. John Howard had survived the war in Iraq. His future seemed secure. But he had another battle to fight. It was coming up to his 64th birthday. Peter flew to Canberra on Monday and rang me from the car on his way to the office and told me that the prime minister had asked him to go round and see him to have a chat, and I said, "What do you think it's about? Do you think he's got something to tell you?" And he said, "I think he's going to tell me what his decision is." Three years earlier, on his 61st birthday, John Howard had signalled he'd re-think his future before he turned 64. The treasurer hoped the prime minister might retire. But John Howard had news for him.

Peter came round to the PM's office and they had a discussion and it went for about an hour or so. He told me he'd decided to stay and he pushed a piece of paper across the coffee table which had a formulation of words on it. He said he was going to read that formulation of words out to the Party room the next day and it was a formulation that he would be staying as long as the Party wanted him to. There had been a form of words discussed with people in the office and I think outside the office which sought to give the prime minister some further room, I think, to be able to consider his future without being hemmed in by artificial deadlines. I obviously tried to engage him in conversation. I tried to persuade him that this was not the best decision for the Liberal Party. We were both engaged in the discussions but we weren't angry with each other,

we weren't yelling at each other.

I said, "We ought to renew the Party." I thought that we had an opportunity

to go to the 2004 election with new leadership, that this would be in the interests of the Liberal Party and we had a discussion but he said he'd made up his mind and that was it. I still felt very fit. I was still very engaged. I was still very committed. And it was clear to me that the overwhelming majority of my colleagues wanted me to stay. Peter was gutted and shocked. He wasn't expecting it. He came back - he didn't say anything to anyone. He walked past my office. I could see his face was a bit dark. Peter rang me and said that he'd just had a meeting with John Howard

and he wasn't going. And I think Peter was stunned. He was incredibly upset. He was devastated. Peter Costello may have been disappointed but when John Howard announced his decision to stay on the Coalition Party room responded quite differently. I remember Jeannie Ferris applauding very loudly from the front row as though it was the best thing that ever happened. Well, there certainly was applause, yes. There was a lot of applause, yes. There was a lot of applause. There was always applause. I mean, whenever John Howard said that he was going to stay there was always applause. Yeah, a great ovation and excitement. There's no doubt about that. Well, always plenty of people ready to applaud the prime minister. REPORTER: Were you disappointed?: Well, it wasn't my happiest day, put it that way. I think after that day Peter went into a bit of a funk. I mean, the prime ministership doesn't work on the basis of Buggins' turn, you know. Not everybody has a turn. He was in a good position to become the prime minister, but that wasn't to say that anyone owed him the prime ministership.

I mean, it's one of those things you have to get, you have to get somehow or other. You need a cunning plan as how to become the prime minister. My attitude was that this was a decision that he had made, it was going to be his last term, 2004, that there was no point in rocking the boat, that it was much better to concentrate on winning that 2004 election, and if I concentrated on winning the 2004 election in the interests of the Party then an opportunity would come later for me. I never had any sort of difficulty in understanding his ambition. It's the ultimate prize in Australian politics. And if you can become the prime minister of Australia by what you might call internal succession that's good. Very good. And I could understand that. DJ: It's John Howard's birthday soon. What are you going to give him? I'll send him a card, I think.

Oh, that's a bit mean! What about a present? Happy birthday, prime minister, from 2UE. Thank you. Good morning. How are you? Leave that there. Ladies and gentlemen, I think I've got a fantastic team... With his leadership secured, the prime minister turned his attention to defeating Simon Crean. There was just one problem. By December 2003 it was clear that Simon Crean would not be given the chance to lead the Labor Party to the next election. Labor would choose between Kim Beazley, or the untested Mark Latham. The result of the ballot was 47 votes for Mark Latham, 45 for Kim Beazley. (ALL GASP) Good luck! Thanks, Simon. Latham had won by two votes, which surprised me. I remember vividly John Howard putting his hands together and looking up and saying, "Thank you, Lord." And then corrected himself because he knew that that moment of hubris or that moment of excitement might come back to bite, and, jeez, for a few months it certainly looked like that. He got off to a rip-roaring start.

Where's his best friend, Buzz Lightyear? He started off with doing some fairly unfamiliar things to the prime minister, like sitting on the floor and reading to children. Goodness. What's Woody going to do? Is Woody going to sort out the problem and rescue everyone? Yes. People forget this - Latham actually got out to a large lead. In fact, you know, I can tell you, through 2004 John Howard, on a number of occasions, addressed the Party room on the possibility of us losing the 2004 election. We were behind in the polls. Latham was connecting with the public. He had a very good radio manner and a good turn of phrase.

LATHAM: If a federal election is held this year - say the election was in September and there was a change of government, we'd be hoping to have them back by Christmas, certainly. But then when the Iraq issue came along, you know, getting the troops out by Christmas, then the wheels started to come off a bit for Latham. I don't think he ever really recovered from that because people deep down thought it revealed a fundamental irresponsibility

and a shoot-from-the-hip approach. And that's what I always thought he was like. In August 2004, sensing he had Mark Latham's measure, John Howard decided it was time to go to the polls. This election, ladies and gentlemen, will be about trust. The Labor Party was really focusing on you cannot trust John Howard, because he's done this, that and the other - don't trust him.

Who do you trust to lead the fight on Australia's behalf against international terrorism? So I thought the best way to deal with that whole thing was to really take the issue of trust head-on... ..and make it an issue of -

who do you really trust to run the economy? Who do you trust to keep interest rates low? Who do you trust to keep the budget strong? By the way, you're not allowed to spin your own number. No, I know that. With polling day inching closer, both parties played a game of cat and mouse on the issue of green preferences,

with each waiting for the other to release their Tasmanian forest policy. Mark Latham blinked first, announcing an $800 million package to protect old growth forests. There will be no net loss of forestry jobs under Labor's policy. REPORTER: This is Mark Latham's $800 million bet. He's punting that he can gain green support without losing Labor's Tasmanian timber seats. Thank you very much. I watched the union people outside the building waiting to talk to him and him going out the back door. And I thought, this is extraordinary. UNION ORGANISER: We're yet to see what John Howard's policy is. It was as good an example as I can recall of my prime ministership, when going with your gut instinct was the right thing to do. I had thought about the idea of a big green package and most of my advisers, almost to a man and a woman, had said you ought to. And yet right when I got to the point of going in that direction something held me back. John Howard had decided on a package that favoured jobs over forests. The prime minister and his team arrived in Launceston aware this was a pivotal moment of the campaign. We saw all these big trucks outside...

HORNS HONK ..all these rather burly individuals in their forestry gear and we thought, well, this will be an interesting day

and of course he walked in there, walked onto the stage and he got a rapturous reception. There has to be a solution that is both environmentally friendly and fair to local communities

and doesn't ask of a small number of Australians

to carry the burden of what the great majority of Australians want. RAPTUROUS APPLAUSE And then I went down amongst them and shaking hands and embracing. Thanks, Mr Howard. And I thought, you know, this is an extraordinary experience. Many of them had tattoos on their arms and flannel shirts and they were quintessential blue-collar workers... ..but in a sense I was keeping faith with the Howard battlers. By election eve, the Coalition was confident of victory. And now Mark Latham was doing everything to help. How are you, Mark? Good, good. How are you? I'm very well. Good to see you. You too. What I can say about that handshake is that I knew it was coming, and the reason I knew it was coming was that on the night of the debate at Channel 9 the cameras weren't on us but he did the same thing to me.

How are you, Mark? John, good. How are you? Pretty well, good to see you. You too. So I recall very vividly when I knew that we were going to shake hands outside that radio studio, I said to myself, "This bloke will do the same thing as he did at Channel 9," and right on cue he did. How are you, Mark? Good, good. How are you? I'm very well. Good to see you. It was very silly. I know it offended a very large number of women. It was only a matter of giving him enough rope and, you know, he'd blow up. On the 9th October, 2004, Australia voted. And with an early daylight saving, the first results that night came in from Tasmania. We'll look first at two of the seats which are causing problems. Certainly, the seat of Braddon, which may well be lost to Labor, and the seat of Bass, which is also seriously in doubt. The first results that came in from Bass and Braddon did show very heavy swings. Michelle, do you think at this stage... You look as if you are suffering some of the expected backlash from Mark Latham's forest policy. And it was obvious from then that the Labor Party was in trouble in both of those seats. And I felt to myself then that it was inconceivable, really, that they could win enough seats from us on the mainland. I can remember on election night, 2004, he put his arm around me. He said, "Mate, I don't think we ever thought 10 years ago this was going to happen." And we hadn't - would never have dreamed

that the John Howard who was in trouble in the mid '80s and you couldn't give him away, that all of a sudden he'd just won a fourth term as prime minister of this country. That really was an extraordinary turnaround. I mean, if you'd have said to me in 1996 that we'd win not only that election but the three subsequent elections I'd have just said, "Well, that's wishful thinking, go away." I thought - it was beyond all my wildest dreams politically. John Howard was now as powerful as any prime minister in Australian history. It led a lot of colleagues to believe that we were invincible. We'd come from behind so many times - we'd had that 10-goal last quarter in AFL terms - that we'd be able to do it again. Whereas, really, what 2004 gave us was a great opportunity most political parties don't get and that was an early warning of what would happen if we didn't have some generational change. And I thought John Howard would have seen that - being the student of history that he is and being the astute politician that he was -

that he had had a get-out-of-jail free card. Well, I have heard people say that Latham was a get-out-of- jail-free card for the Coalition. One will never know that. But a win is a win. CHEERING AND APPLAUSE (ALL SING 'ADVANCE AUSTRALIA FAIR') In fact, the Coalition increased its vote and its majority in the Parliament. The size of the victory would give John Howard

enormous authority within his own party. But no leader, however powerful, can forever avoid the issue of succession. # ..advance Australia,.. #

Would John Howard, like his hero, Sir Robert Menzies, choose the time of his own departure or would the public do it for him? Closed Captions by CSI * This program is not subtitled This Program Is Captioned

Live. Good evening. Australians

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