Anatomy of a failed rebellion within the Liberal Party

THE messy fight for the federal presidency leaves the Liberals looking less united.

Alan Stockdale

WHEN Tony Abbott discussed the Liberal Party presidency with Peter Reith last month, he had his riding instructions: tell Reith that challenging incumbent Alan Stockdale would be a messy distraction the Liberal Party didn't need. Not when Labor was under pressure; not in the lead-up to the anniversary of assassination day, Kevin Rudd's phrase of choice for his prime ministerial demise 12 months ago.

It isn't often that an opposition leader is deployed with riding instructions, but such is the power and influence of one Nick Minchin. He finishes his Senate term on Friday after 17 years of parliamentary service, but it would be a mistake to assume his departure is matched by a loss of authority inside the Liberal Party.

The only problem was that Abbott didn't deliver the message in the way Minchin had requested, so much so that Reith walked away from their discussion believing he had Abbott's support for a tilt at the presidency.

How could two senior figures such as Reith and Abbott have such vastly different interpretations of what was said?

"It may say as much about Reith's listening skills as it does about Abbott's ability to deliver a message, assuming the blame for the misunderstanding is shared equally," one well-placed Liberal MP tells The Australian.

The contest last Saturday for the Liberal Party presidency had so many twists and turns, so many delicious ironies to it, that it could have been torn from the pages of a Yes Minister script.

Both camps believed they had Abbott on board, which is all the more intriguing after the contest was decided by just one vote. The secret ballot may have kept the truth from us, but Abbott showed his ballot on stage to Stockdale and his deputy Julie Bishop, picked up by the Sky News cameras.

However, Bishop was a strong backer of Reith's candidacy - as she thought Abbott was - which made her knowing look of approval when presented with Abbott's ballot paper all the more impressive for someone not schooled in the fine art of acting.

Reith wasn't personally working the numbers, at least not as ferociously as Stockdale was.

"If he was really keen on the job he should have taken a keener interest in where the numbers were going," says one opposition frontbencher who took more than a casual interest in the affair.

Reith believed his supporters when they told him they were comfortably ahead of the incumbent, but they were wrong.

To shore things up, those same supporters - which included the four vice-presidents serving under Stockdale: Alexander Downer, Danielle Blain, Tom Harley and David Russell - wrote an open letter to Stockdale informing him why they were supporting Reith's bid to topple him.

It backfired, becoming the perfect tool for a savvy Minchin to use against his opponents within the party.

"In my 32 years of full-time service to the Liberal Party, I have never seen an act of treachery quite like this," Minchin told the media.

But says a Malcolm Turnbull supporter in the bruising leadership contest Abbott won by just one vote in late 2009: "Talk about hypocrisy. If Nick needs help searching the annals of his brain for an act of treachery, might I direct him to how he and his boys in the Senate acted not that long ago, resigning one by one through the media."

It's not hard to see how internal party ructions can become a distraction from taking the fight up to the government.

Despite the treachery of the letter to Stockdale from the four vice-presidents - which included lines such as: "You know our views on the party's financial situation and the failures in decision-making . . . we share your aspirations. Where we differ is that we have confidence in Peter to actually do it" - Blain sent Stockdale a text message shortly after his victory telling him she hoped to put the recent events behind them and she looked forward to working with him into the future.

"That's chutzpah!" exclaimed one federal councillor, who thought the VPs had to resign. "If they don't, what sort of open attack on the competence of a president does warrant a resignation?"

Reith, the former Howard government minister who so cogently argued the case for tough reforms, including waterfront reform, gave a poor speech on Saturday. "After what [Reith] put the party through we deserved a better argument for change," says one councillor who supported Stockdale.

Reith described himself as an activist addressing a room full of activists - odd rhetoric in front of a conservative gathering.

Stockdale, not known for rhetorical flourishes recently or when Victorian treasurer under Jeff Kennett in the 1990s, outlined a zeal for reform if re-elected despite not having seriously embraced such thinking in the lead-up to the day. Indeed, a lack of reform to party practices and financial disclosure had been the basis of Reith's decision to challenge Stockdale in the first place.

Downer joked on Sky News' Australian Agenda the day after the vote with a cheeky grin that while his man hadn't got up at least their opponent had morphed into a reformer.

Downer and Minchin have long been close political allies, as have Downer and Reith. When Minchin called on his friend to stand up for Stockdale, Downer put his loyalty to Reith first. After all, it wasn't as if Minchin were running for the position, although strong suggestions (since denied) have circulated that perhaps doing so in 12 months lay behind Minchin's opposition to Reith.

Downer also felt that reforms Reith was pushing, such as directly electing the president, were a good idea, likely to engender a more activist membership for the future.

The line-up of high-profile names backing each candidate makes for interesting reading. In addition to an array of sitting federal MPs, Reith was supported by the likes of John Howard, former party treasurer Ron Walker, NSW Premier Barry O'Farrell and former Howard minister Amanda Vanstone: a genuine cross-section of the party.

Despite having reservations about the distraction that a contest for the presidency might create, Christopher Pyne joined the Reith camp late in the piece. It was a long time ago now, but in the 1990s, before he became a supporter of

Peter Costello, Pyne was a strong backer of Reith. (Pyne and Minchin also have been long-time rivals in South Australia.)

Stockdale's camp included names such as Kevin Andrews, Eric Abetz, Andrew Robb and Mathias Cormann.

When you go through the groupings, with one or two exceptions, the dividing lines are similar to that other contest Minchin won by a solitary vote: Abbott's showdown against Turnbull.

It seemed that most Liberals had a strong opinion one way or the other on the contest for a position that is unpaid and, in the words of former Victorian Liberal Party president Michael Kroger, is powerless because of the decentralised nature of the party.

"It was only Tony Abbott the weathervane who couldn't seem to commit one way or the other for so long," one of his parliamentary colleagues says with a laugh.

Adding to the layers of complex self-interest attached to this contest was the rumour that Reith, as part of his planned organisational upheaval, would get rid of federal director Brian Loughnane, who happens to be married to Abbott's chief of staff Peta Credlin. It certainly motivated Loughnane's supporters.

There have been suggestions that Minchin opposed Reith because of fears the latter would support the moderate wing of the party, threatening the power base of the outgoing senator. Holding back a moderate advance was certainly part of the sales pitch used to retain Stockdale.

However, more significant in Minchin's mind was a desire to preserve equality for state divisions in the federal structure of the Liberal Party, as well as the autonomy of those same divisions, free from federal interference. (The federal council is made up of 14 delegates from each state, including the ACT, as well as the 15 members of the federal executive.) It was a powerful message for councillors from states such as Western Australia, South Australia and Tasmania who worried that if Reith's desire to move to a directly elected presidency was enacted, that person would inevitably hail from the population centres of Sydney or Melbourne.

Minchin has long been a federalist, even though, like others, he had to suppress the tendency as Howard centralised government in Canberra. Minchin was at least happy that Howard never tried to do the same internally to the Liberal Party.

Another irony of Saturday's contest presents itself. In his book Battlelines, Abbott restates a view he has expressed many times before, that he isn't a supporter of federalism. The Reith reforms therefore suit his world view, even if the messiness attached to delivering them might be a distraction from Abbott's desire to keep the focus on the government.

The irony goes the other way, too. Barry Court - son of Charles Court, former West Australian premier and noted states rights campaigner - was one of the few WA delegates to back Reith's centralising ideas.

Minchin's multifaceted approach to telling individual delegates what they needed to hear - to park their vote in Stockdale's column - put him a cut above his opponents on this occasion.

"It was a masterful performance in engineering the numbers," a Reith supporter laments, adding: "WA cost us victory. We were led to believe we had more delegates from there in the bag than must have turned out to be the case."

"WA overwhelmingly supported the incumbent, that is true," a Stockdale supporter adds.

By Saturday, the bad blood attached to the campaigns of both candidates was significant.

Doing their best to reduce tensions, Stockdale and Reith thanked each other for staying out of the nasty fray. But pointing to the actions of each other as individuals was a deliberate swipe at supporters on both sides who used the media and factional muscle to mount nasty arguments.

In Liberal circles there is a sense that the saga was a bit of a "storm in a teacup", as one MP puts it.

That may be true, but some Liberals worry that the organisation isn't in good shape and an opportunity for change has been lost.

Others say as long as three of the four VPs who wrote the letter of no confidence in Stockdale remain in their positions, the party will be dysfunctional at the top.