In Conversation: Senator Arthur Sinodinos

Senator Arthur Sinodinos makes his maiden speech earlier this year. AAP/Alan Porritt

Welcome to this In Conversation between Liberal Senator Arthur Sinodinos and Macquarie University politics expert Craig Mark.

Sinodinos is a political paradox: he’s the newest member of the Australian parliament yet also one of the most experienced, having spent 10 years working as chief of staff to John Howard. Before that, he’d been an advisor to Howard during both his stints as opposition leader.

Sinodinos left his role as Howard’s right hand man in 2006 having gained the respect of nearly everyone he dealt with, no mean feat in the febrile atmosphere of Federal politics.

But after five years working in the private sector, Sinodinos chose to fill the vacancy in the Senate created by the departure of Helen Coonan.

In the wide ranging and disarmingly frank discussion, Sinodinos explains why he took that decision and offers his take on politics past and present:

  • Why he believes in a “bigger Australia”
  • His aims in the Senate
  • How America ignored the lessons of the Asian financial crisis
  • John Howard’s growth and challenges as Prime Minister
  • The issues facing Julia Gillard and the ALP

Craig Mark: Senator Sinodinos, thank you very much for your time. My first question is: why have you decided to return to politics? You were John Howard’s chief of staff, you then went into the banking sector and now you’ve come back and into opposition.

Senator Arthur Sinodinos: I looked at my career over time and I thought, “what is the missing bit?” and the missing bit was being on the front line and being an advocate rather than just someone who was – important as the role might have been – just an advisor to someone else.

I thought also after discussions with the family that if I was going to do it at the age of 54, coming to the stage where it may well be the last job I have before retirement – and you have think very carefully about what you do then – I thought I will give it a go.

My family were supportive of me doing it and it is consistent with having an interest in public policy, wanting to contribute in a way that makes a difference. I enjoyed the commercial stuff, I would love to still be involved in it, certainly financially it would better for me but I think I enjoy the public policy and the clash of ideas for want of a better phrase and contributing to that whole process.

A bigger Australia?

The concept of a Big Australia has waxed and waned in political popularity over the decades. AAP/Paul White

Mark: In your maiden speech, which many people have praised for being very positive, you mentioned the importance of your migrant background and what migrants have contributed to Australia, but also the importance of a “Big Australia.”

Sinodinos: A bigger Australia.

Mark: A bigger Australia then. Certainly in the 2010 election campaign one of the issues both the Coalition and Labor almost agreed on was that they went away from supporting Kevin Rudd’s Big Australia. How do you stand?

Sinodinos: I was disappointed that Rudd, having raised the concept, then ran away from it because I had to that point taken it for granted that we want to keep growing the place. We want to make it bigger and the reason for that is not because we want to fill it with people but because there are geo-political, economic, social and cultural reasons why a bigger Australia would be a more dynamic, interesting, vibrant and good place to be.

It would certainly help us to punch even further above our weight in the world. It was [said] in a context where I wasn’t just saying everybody is growing their population therefore we have got to grow.

There’s actually a situation in the West where population is stabilising and except for the US possibly going to tail off. Certainly in many developing countries as they become richer the population stabilises and may even tend to come off.

I wasn’t looking at this in terms of being the irresponsible person who wants to add to the unsustainability of the planet. I thought we could actually do this in a way that is overall better for the planet, if I can put it like that, because we can make a contribution to issues around the planet if we have a stronger voice, given the sort of culture we have and the perspectives that we bring to many global issues.

I want us to have more influence in the world, because if we have more influence in the world, we are in a position where we can better look after our citizens as well. We have just got to realise that the world is a very competitive place and they are not standing still, as I said in the maiden speech, waiting for us to succeed.

We have got to make our own way and the best way to do that particularly in a context where we can’t always rely on our great and powerful friends, they have their own issues, we have got to make our own way in the world as well.

Dealing with economic crises

Mark: We have Eurozone crisis at the moment, GFC Mark II, or some would say the ongoing GFC from 2008. From your perspective, especially considering your experience in the banking industry, what role did the regulation of the Australian banking industry play in leaving us in a better position?

Sinodinos: I think since we had the GFC, the banks have been required to keep more capital aside to meet their loan and other obligations, so that is making them more conservative. It is going to have an impact on their ability to lend, particularly to small- and medium-sized enterprises. That approach could have a backlash in terms of business lending.

Australia has so far avoided the worst of the global economic meltdown. AAP/Emilio Naranjo

What I am saying is that, if anything, the GFC will have made the Australian banks even more conservative, which may be helpful in terms of them avoiding risky investments and ventures going forward. But we have to understand there is a price to pay for that in terms of their overall capacity to lend.

I think the other thing that will continue to help us is that because of our position in the Asia Pacific region, China will continue to give us a growth impetus. We can’t avoid the backwash of what happens in Europe because at least half of the wholesale funding of banks now comes from the international capital markets. So when those markets freeze and don’t lend, or the risk premiums in those markets go up and we have to pay much more for the cost of our funding, that flows through to the cost of our consumers.

So that debate you see in Australia about the banks not passing on all of the RBA-sanctioned interest rate adjustments, that reflects that in part the cost of their funding may be going up in a way that diverges from the Reserve Bank and they have to make up for that and that is a challenge for them.

Mark: Yes, part of the excuses for the banks not passing on the rate cuts is that with a potential liquidity freeze coming from Europe, they may need to have as much of a financial reserve as they can.

Sinodinos: In a perverse way, what the RBA may be doing is by cutting rates saving the big banks from raising their rates because of ongoing funding pressures, but that hasn’t actually factored much into the debate.

Could the GFC have been avoided?

Mark: How does the current GFC compare with the Asian financial crisis on 1997/1998, which was the first big crisis that the Howard government faced in terms of economics?

Sinodinos: The Asian economic crisis was a bit more contained in a way, because that was in developing financial markets rather than developed financial markets like the US, in the case of the GFC.

What surprised us at the time is that if you just let the exchange rate go, the economy was flexible enough to accommodate that and actually as a result of that we were able to keep ourselves afloat – in part because we were able to generate trade and exports, and the exchange rate was flexible.

And that reminded people that the previous 20 years of economic reform had had an impact by making the economy not only more open but more flexible and better able to deal with shocks.

What was good at the time of the Asian financial crisis was the work we had done in ‘96 in putting the budget back into balance was useful because it meant we weren’t necessarily classed along with those Asian economies that were under fire.

What was happening in Asia was a lot of short term capital flowing in and out was playing havoc with the financial markets and we didn’t have that issue in Australia, we were seen as having a more stable budgetary framework.

What we learned from it was economic reform did pay off in terms of the suppleness or flexibility of the economy. The other thing we learned was that we could influence what the IMF and others do in a more direct way. We did that [with] Indonesia where they had a particularly harsh austerity program, which was leading to riots, and we intervened with the IMF to get it changed to assuage some of those impacts.

That really reminded us about the role we could play in terms of international security and international financial policy. It was after that we set up a group within Australia to look at reform of the international financial system and that raised issues about some of the very entities; the hedge funds and what we call the shadow financial system that played a role in this latest crisis, but the Americans at that stage were not keen on reform of the international system which addressed some of that.

Mark: If they only listened to you we could have avoided all this.

Sinodinos: It was about listening to the Treasury. It was interesting because it was maybe more interventionist than you would associate with a Howard type of government but the Americans under Larry Summers and Robert Rubin and others weren’t interested at that stage.

Slashing red tape

Mark: One of your new jobs is to be in charge of a review committee on deregulation, and reducing red tape particularly for small business. What areas do you think you will be looking at there?

Sinodinos: In one sense, how long is a piece of string? because government has a pervasive impact on the economy. There’s the federal dimension that we are mainly interested in, and the state and the local dimension, and sometimes it is the interaction between them, which is the problem for business because they are getting hit from all sides and they feel like it is all a bit uncoordinated.

My point is that the remit of this taskforce is federal, so we are looking across a range of departments. Some departments have more of regulatory role than others. The Tax Office for example has a pretty significant role in regulating business, and particularly small business, but there’s a whole variety of business regulation that comes through the Department of Industry.

We are not looking so much at industrial relations in its own right because that is a separate policy area but we are going to look at the impact of various government programs that are either meant to benefit small business or they are meant to be able to apply for.

If you are going to apply, how much red tape do you have to go through, how quickly do you get an outcome? Even approval processes – how long do they take, how much time, how much effort, how much expense?

Of course, governments don’t have to pay for that, but if you are a business looking for approvals and they are taking a long time, it is the opportunity cost which is important as well. We’ll also focus on some of that Commonwealth/state stuff that is being done around the seamless national economy. There are a number of de-regulatory initiatives there. Are they working, is that happening quickly?

At this stage we are going through a process before Christmas of prioritising the sort of areas we will deal with, but in a sense the whole of the Federal Government is our canvas.

Mark: Is one of the objectives of this to provide some budget savings?

Sinodinos: There are cases where that will be the case but a lot of it is really the cost to business. If you can take away some of the costs to business of doing business, hopefully that means they have got more money to invest or create new jobs. We can even make savings in time for them, maybe even work/life balance issues, they will have more time to spend with their family and less time on paperwork.

Mark: This is one of the issues facing the Opposition, isn’t it – reforming fiscal policy? The government claims there’s a $70bn black hole in the budget once the carbon tax is repealed and the mining tax.

Sinodinos: I’m not sure about how big the task is, because if you repeal the carbon tax you presumably don’t have to pay the compensation that goes with it. There may be some compensation; there might be a separate tax package that the opposition has talked about. That will need to have a bit more precision put around it in due course. We will see that closer to the election.

No government has its own money

Mark: Going back to your period in the Howard government, was that one of the weaknesses towards the end? The loss of fiscal discipline, particularly after you left in 2006?

Sinodinos: I don’t know about that. There’s a bit of myth around this but the reality was that the economy was performing pretty strongly, revenue was pretty strong, so there was a capacity to have both surpluses as well as some tax cuts, as well as put some money away for various funds. We had a higher education fund as well as the future fund and other funds for capital investment in the public sector.

As far as the surpluses are concerned, the Reserve Bank and the Treasury seemed to be quite happy with a surplus of around 1 to 1.5% of GDP so there wasn’t any pressure to have massive surpluses of $20bn. Yes, there was pressure to also have funds, and we put money away for that, but the view in the government philosophically was: if we get extra revenue, part of it should be returned to the taxpayers because it is their money in the end. Governments never have their own money; it is always someone else’s.

Sinodinos with his former boss John Howard after being awarded the Order of Australia. AAP/Alan Porritt

The idea was: give tax cuts back as well. The Treasury in those days weren’t necessarily great fans of having sovereign wealth funds. Ted Evans and, to an extent, Ken Henry were of the view that you were better off recycling the money into the economy through tax cuts, which improved the incentive to work and to save and to help encourage people, particularly those who might be second-income earners in the household, back into the workforce.

I can remember the old budget where they would model the impact on labour force participation of cutting tax rates, and that is an ongoing challenge.

Sovereign wealth fund

Mark: On sovereign wealth funds, do you think it is a sensible idea for Australia to have one on the model of other countries like China or the Emirates or Norway even? Malcolm Turnbull has raised it as an idea.

Sinodinos: I mentioned it in the maiden speech. Joe Hockey used to argue that it was like wanting a Maserati – it is nice to have if you can afford it. For us, if it is affordable at some stage in the budget cycle it is not a bad thing to do, because I was linking it with the idea that you then invest particularly in emerging economies as a way of getting more of a stake in those economies and then geo-politically having a bit more influence because of that.

The way the Singaporeans and the Koreans and some of the others use it is they have that sort of influence and clout and if you talk to people here in Australia about the Singaporeans and others that is certainly their view, that it is used to give smaller countries more clout.

In a perverse way, that is promoting Australian investment abroad, shouldn’t we invest at home and my answer to that is that you can do a bit of both. But to the extent that you get a bit of influence in emerging economies that’s a good thing too because they are the ones with the growth potential.

Foreign policy

Mark: Apart from economic crises, what were some of the other main challenges you faced when working with the Howard government, especially in terms of foreign policy?

Sinodinos: On the foreign policy front, East Timor in the late 1990s was important because I think it gave John Howard a taste [of how] the UN in particular works, because he ended up leading that coalition. He spent a lot of time with Kofi Annan on the phone lining all that up.

The Americans were happy to help with the heavy lifting but they didn’t want to lead the coalition, so it was left to Howard to do that and I think that gave him a real insight into how the international system at its best can work, when all the players are on a similar wavelength and want to work together to achieve an outcome.

Australian troops on parade at Dili port in East Timor. AAP/Capt John Toohey

I think he got a lot out of that process. It is interesting. Over time, as prime ministers stay there, and they are longer in the job, they get to have longer relationships with overseas leaders and they get a bit of corporate memory.

I think Howard enjoyed foreign policy more when he’d been through a few crises like this; they’d given him a feel for how things like this work, he’d developed good relationships. Jiang Zemin was the leader he probably saw the most in the period he was prime minister, they developed a good relationship.

I remember they were watching the fireworks together in Shanghai at APEC in 2001 and Jiang and he were holding hands the Chinese way. There was this camaraderie, esprit de corps, whatever you want to call it, that develops between leaders, so the international dimensions of the job became more important over time and of course the War on Terror gave a new point to all of that.

The relationship with America after all of that was shaped by that influence, and in John Howard’s case by the fact that he was in Washington on 9/11 and had seen the impact on the “American homeland” in inverted commas, and out of that one of the reasons he was keen to support the American action in Afghanistan and Iraq was because he linked the whole issue around the War on Terror and weapons of mass destruction.

I remember going on the odd trip with him during that period and this issue of WMD was like conventional wisdom; everywhere you went in the US, in Britain, in other countries. Even Kevin Rudd I remember talking about this as if it was conventional wisdom.

That period John Howard spent increasingly focused on international security issues. In the run-up to the 2001 election, the whole border control/boat people thing came to a head with the Tampa. That took a fair bit of time, putting in place the Pacific Solution. After that period of getting the numbers of control there was a period, 2002 to 2003 where the issue was children in detention, what are you doing about that, trying to get that sorted.

You might remember there were issues around Cornelia Rau, people being put in detention who had fallen through the cracks. There was a period there where the focus was more on international security issues and immigration issues. Economic and social policy went on and things happened, but it wasn’t a big focus.

Economic and social policy came back into it more towards 05/06 when WorkChoices was around, welfare-to-work reforms and other issues around the budget and taxation came more to the fore again.

The rhythm of politics

Mark: Again, looking at the historical perspective – before even being part of government you were an advisor to John Howard in both periods of opposition, from '87 to '89 until he ended up out of office …

Sinodinos: In the dustbin of history.

Mark: … temporarily, before he came back to '95/'96. How has politics in general changed since that period of the '80s?

Sinodinos: That’s a good question. I think, and it is trite to say this but true to say this, the media cycle is a lot quicker. You really do have to feed the beast 24/7. The proliferation of programs, Sky News would run interview programs morning, noon and night and they need talent to fill that and that creates its own dynamic.

Politicians have also discovered the proliferation of media and they have tried to take advantage of that. You’ve had a situation where they are doing not just print, but radio and TV and more social media as a mechanism for getting messages out.

The channels of distribution have changed, I suppose and the focus on getting the message out has increased. [This has happened] during a period where the number of rusted-on supporters for either side of politics has tended to go down and there has been a perception that post-Cold War that the issues between the parties aren’t as significant as they used to be.

Sinodinos echoes many of former ALP politician Lindsay Tanner’s views on the interplay between politics and the media. AAP/Alan Porritt

Therefore you have had a situation where more single-issue parties have tended to come to the fore. Part of the success of the Greens has been to use the environment as a banner under which they marshal a group of people, partly on the left, some of whom would have been on the right, who might have been less right than other people on the right, so they might have been interested in some of those issues.

There has been a tendency for third parties to grow, and then third parties like GetUp and others to be part of the scene. In the old days there weren’t that many other political players. The unions would have been the main non-political player, and some elements of the business lobby, but these days it is more fragmented and it is more systematic – GetUp and others can use social media to get their messages up and tap into people.

The political marketplace is in some ways tougher, and part of the challenge for politicians is how to get to people they may not be able to get to through traditional means. Social media plays some role in that, but there are a lot of people who don’t get their news or information through social media. They may read the odd magazine. What do you do about them?

The other challenge is that the economic debate is more sophisticated, there are more players in it, more vested interest. They have the capacity to get independent economic advice, so you get the battle of the models, the battle of the facts and that creates its own tension for political parties and governments and the public service. There’s competing sources of advice.

That creates an environment where issues can be picked up – the mining tax before the last election is an example – and really run quite hard and become the focus of political attention and activity. It is quite a battleground for politicians, they don’t have it to themselves the way they once did.

They can no longer control the rhythm of politics; the rhythm of politics is controlling them. I notice this alleged secret part of the last ALP report which talked about Rudd’s problems around spin and lack of purpose. Part of the problem can become that you get so focused on getting your message out that it is not so much that you don’t think about the message, but you get more relaxed about the message, and you are more focused on getting it out and feeding the beast and dominating the media because if you don’t dominate the media, the opposition will.

I think one of the problems Labor has had in this term of government is having a consistent, for wont of a better phrase, narrative about what it is about. There are elements of it there in various ways, but often for tactical reasons they haven’t stuck to the narrative, they have tended to jump off their own narrative.

They did this before the budget, where they are building up to the budget and their story about maximising the benefits of the boom and making sure that there’s skilled jobs, and as they’re building up to it they suddenly announce the Malaysia Solution which immediately takes the focus off the budget and onto boat people.

Then they announce the budget and they don’t spend very long selling before they’re off saying that there’s Abbott and his budget reply, he’s got to tell us what his alternative budget is. They didn’t even spend much time spruiking their own stuff.

It is this sense of what you are about, and why are you doing what you’re doing, that people like to know, and they know when it is missing.

The Greens

Mark: What is your opinion on the Greens? Could you work with the Greens? They do control the balance of power. Your Senate colleague Cory Bernardi thinks they are trying to destroy the fundamentals of society.

Sinodinos: To a greater or lesser extent all the parties in the Senate cooperate on things. There was recently that report on coal seam gas that Bill Heffernan chaired on behalf of the Coalition and the Greens were on that. These conversations occur all the time.

I think what Cory is trying to get at without putting words in his mouth is he’s trying to say ideologically, what are the Greens about, and is this an agenda that at the end of the day the vast majority of the Australian population support? The issue then, and I referred to this in my maiden speech, is on things like growth. What do they really think?

They talk about sustainability, but they are not all that big on growth. They have reservations about growth. The fact is that in terms of jobs – and the fairest way to help people is to have jobs – you need some sort of growth. In some ways their dilemma is, and now they’ve peaked in popularity people will give them more scrutiny, their dilemma is having a program that appeals to the public as a whole as opposed to a sectional interest which, by dint of minority government, they are in a position to impose on the rest of the public.

Sinodinos argues the Greens may have peaked in popularity. AAP/Alan Porritt

It is unrealistic to say we can just live off renewable energy within a decade. It is unrealistic to say we can close the coal industry overnight. It is not just whether you think that is a good thing, it is unrealistic that you can do it if you are a responsible legislator. It ain’t that easy to close a whole industry like that overnight or in a short space of time.

In the past they have been allowed to get away with a certain looseness around this. They have policies they highlight on their website without getting much scrutiny. That is changing because they are at the heart of government and they have a responsibility to the electorate as a whole.

Ageing parties

Mark: Earlier on, you mentioned the challenges of the media cycle and representing people adequately. That was an issue at the ALP conference where Senator John Faulkner mentioned the ageing of the Labor Party and that it is shrinking. With your NSW Liberal Party President hat on, is that also a challenge for the Coalition parties?

Sinodinos: Particularly relative to the size of society, yes, I think that is right. If you look at the demographics of the Liberal Party, it is an ageing demographic and to some extent society is ageing, but even more so the political parties are, and Faulkner has a point on that. Both sides have Young Labor and Young Liberals and all the rest of that but in terms of the broader membership, it is fair to say that it is ageing and this in part reflects the fact that it is hard to get young- and middle-aged and professional people to get to branch meetings by the end of their work and family responsibilities.

All the parties are looking at strategies to try and engage those sorts of people. It is a real challenge. One advantage the Liberal Party potentially has over Labor is the extent that it still maintains a fairly independent grassroots influence over the party machine. There can be circumstances where you want more control from the centre; you can impose certain solutions on things. But to some extent the benefit of having that greater grassroots influence is that it maintains that vitality because you have people who are members of the party who feel they have a say in what goes on. I don’t think they have as much of a say as they should have and we are looking at ways in NSW of maximising that, say, and I noticed Labor at their mational conference were essentially talking about the same thing in terms of giving individual members more say.

Even more so than us, they have tended to have their centralised bodies to impose pre-selection and candidates on various seats. It has got to a stage where it is almost like a Politburo setup, where power is exerted from the top rather than coming up from the bottom. That is an issue because it erodes the value of membership if you are a grassroots member, because you have no influence on what goes on, you are just there to hand out how-to-vote cards at election time.

The other issue they face is their relationship with the trade union movement because it is both a great benefit in terms of resources and organisation on the ground and helping distributing stuff both at, and between, elections. But the other problem is the situation where the party becomes too influenced by one interest. You could say it is a pretty fundamental interest and it is but the trade union movement today does not represent all workers simply by the changing industrial composition of society.

There is an issue about whether that hobbles the ability of Labor to be a more broadly representative party and in touch with ordinary Australians, even though the unions would argue through their very membership base they’re are in touch with ordinary Australians.

In one sense they are but I’m not sure to what extent that really filters up rather than comes down. I think they have got to do something about the trade union link but I think it will be difficult for them to do that while the unions have so many resources tied up in the ALP.

If that link can be watered down to some extent it would probably be easier for both sides of politics to go forward in a more sensible way. And at the moment I think what has happened is that Labor have been bankrolled by the unions and that has allowed them to dictate the policy pretty effectively and they got a big payoff in '07, and we handed that to them on a platter in a way, but it is a major issue going forward.

The WorkChoices misjudgement

Sinodinos admits the Coalition misjudged reaction to WorkChoices. AAP/Justin Smith

Mark: You did say when you made your maiden speech that things may have gone a bit far with WorkChoices, possibly as a result of having a full majority in the Senate.

Sinodinos: On the Senate point, it was certainly a surprise that the Coalition got a majority in the Senate after the 2004 election. There was certainly a debate internally, or a view that we shouldn’t be seen to fritter away the opportunity that might give us, to do things which we hadn’t been able to do because the Senate had been opposing through most of the time of the Howard government.

I think that was partly informed by the view that when Malcolm Fraser had majorities in the Senate in 1975 and 1977 till 1980 it wasn’t really used to do big things or keep things really going forward. That informed the thinking on the need to do reform and all the rest of it.

On industrial relations, most of it was a codification of things we’d tried to get through before but couldn’t. I think the big error was assuming that if you take the safety net away and rely on the idea that agreements subject to national standards would be ok wasn’t go to fly in the end. You still had to have someone to vet the agreements and make sure that workers weren’t being potentially undermined.

I had assumed, and I don’t know about others, that in a strong labor market that would not necessarily be the case. But what I was hoping, and to some extent there is evidence of this, is that a more flexible system would make it easier to create entry-level jobs, make it easier for people with a marginal attachment to the labour force into the workforce and complement other policies that were promoting people being in work rather than on welfare.

A double dissolution

Mark: Again talking about the Senate, and now the government is likely to go full term and the Greens maintain the balance of power, what are the prospects of a double dissolution happening soon after an assumed Coalition government?

Sinodinos: Tony Abbott has made it clear that if he couldn’t get through things he felt he had a clear mandate for, he would look at a double dissolution. I think he mentioned that in the context of the carbon tax. It is a possibility but he was hoping Labor would at least respect the mandate of a Coalition government, particularly if it won a significant victory at an election.

That has been his thinking, and the dynamic can change after an election, and parties can rethink their positions, can change so Labor might re-think its position but certainly at the moment they have been very strong that they would oppose any abolition of the carbon tax, as would the Greens.

Mark: On that scenario, it wouldn’t be until at least 2015 until you could repeal the carbon tax or the mining tax.

Sinodinos: That is absolutely right. If people want change they are going to have to vote big.

Kevin Rudd and the Copenhagen mistake

Mark: Do you think Rudd made a mistake by not going to a double dissolution in early 2010 when he was flying high in the polls and had the trigger?

Sinodinos: He may have made a mistake. It would have been more consistent with his rhetoric around climate change being the great moral challenge of our time, the fact that he was prepared to go to the public with it. He was a first-term prime minister, just been through the GFC, the atmospherics would have been quite supportive. Either that or coming back from Copenhagen and saying the rest of the world is going to take longer on this so I am going to put the ETS on the backburner. That was the other option he could have taken just to take the heat out of it.

That was the other option he could have taken, just to take the heat out of it. He came back from Copenhagen and he was still quite bolshie about it and didn’t really drop it until he was seen to drop it under pressure because of deteriorating opinion polls.

What that did was to say to people was, “Hang on, does this guy really believe this is the great moral challenge of our times?” And you won’t follow a leader who doesn’t seem to have the courage of his own convictions, and I think that fatally undermined his credibility in the community.

I think at the time when Swan and Gillard and others may have given that advice to drop it they were just reacting to the polls. It is Politics 101, it isn’t going too well, it’s toxic, let’s get rid of it. I don’t think they understood the link between the policy and the brand of their prime minister who had campaigned big on Kyoto in 2007 as well.

Winning elections

Mark: In your previous experience with elections, to what extent can you say it is a combination of luck and leadership that brings victory?

Sinodinos: Mark Latham was a lucky break, there’s no two ways about that. I think it was McClelland, [then] Attorney General, who was the one vote difference that got Latham the job. You could say that [an opponent] like Latham is lucky in one way, but you also make your own luck. I think in the run-up to the 2004 election there was no overwhelming case to change the government apart from the fact that by then it had been in government for about eight years and people could say it is getting on a bit.

But Labor, even under Latham, hadn’t made a strong case. One thing about Latham is that he is one of the few Labor thinkers who had thought in opposition but when he became the leader, he didn’t really seem to want to pursue many of his own ideas, he just seemed to adopt what was seen as the appropriate set of policies. The machine people got to him, I think.

Former Labor leader Mark Latham - a lucky break according to Arthur Sinodinos. AAP/Rob Hutchison

Early on, even though he made some gains by talking about reading to kids and bringing the troops home by Christmas which sounded good, what happened in the end was there wasn’t sufficient of a mood for change and also he did those ads during the '04 election where he said “I’m 43, and I’m ready to govern” which reminded people of their reservation about him, which was that he was too young to be the national leader.

Mark: What about 1998? How close to being a one-term government were you?

Sinodinos: Pretty close. I think what saved the government then was some pretty good campaigning by the marginal seat members, there’s no doubt that helped. But we lost on the popular vote, but the popular vote wasn’t in the right places, and that’s where the marginal seat campaigning was so important.

There were probably a lot of big swings, and I’d have to check this, in safe Labor seats where you might have got working class groups concerned about the regressiveness of the GST.

That was a funny election because some of the analysis done by the ANU afterwards suggested that some other groups were attracted to the government because of the GST proposal; because they thought it isn’t popular, so they must be putting it up because they think it needs to be done. So you get a response positively because they think it is the right things to do not because it is politically popular.

But the challenge Howard faced in '97 was that the government had been a bit wobbly in its first term and to stabilise it he used the second half of the first term to have an overarching project to pursue and that turned out to be tax reform and I think that helped stabilise the government, gave it a purpose and gave it a policy and a narrative for its second term.

2012 … and beyond!

Mark: What do you see as the big issues next year the opposition is going to try to take to the government?

Sinodinos: On one level keep up the fight on the mining tax that comes to the Senate in March I think after a Senate inquiry. Try and keep the rage alive on the carbon tax, reminding people of that, issues like boat people will have their own dynamic. The boats may stop during the typhoon season and restart afterwards.

Tony is talking about putting out more of his own policies. He’s already put out a few when you tot them all up, making sure people are aware that is what he is doing so it is not just attack there is also the alternative.

Slipper is a bit of a walking time bomb given his background. He will be more careful than he has in the past. Craig Thompson is still walking around, at some stage he could still be charged but because they have now got one vote up their sleeves, Labor may think we can cope with something happening to Craig.

The problem in politics is that things tend not to happen just in ones, you can have a few things happen together. Even though the government may have vote up its sleeve it is not out of jail yet.

Julia has to make up her mind what she does about Wilkie and pokies by May. People have said that because she has got the one vote up her sleeve now she can afford to burn him. But if she burns him, well, Ronald Reagan used to talk about you always dance with the one who brought you, Andrew Wilkie would exact his revenge if he felt he was being dudded like that. There is no point having a vote up your sleeve over here if you are burning a vote over there, permanently, potentially.

The other issue is that the government have forecast a surplus in 2013 in the next budget. You’d expect them to put a surplus into their budget. The question is what confidence they have about how long they can sustain that as the figure in their budget and therefore what dynamic that sets up going into an election soon after the budget or early in the second half of calendar year 2012. A lot depends on how popular Julia is.

The other dynamic that is going on and won’t go away is the whole Kevin Rudd thing. That is still playing out there. The higher primates learn from experience. Given the undermining of Julia during the campaign and the accommodation of Kevin by giving him the foreign minister job, they have to stop snubbing and sniping at each other, like on the Australia TV tender or not mentioning him.

What does it matter if he is mentioned in the speech with Curtin and the rest of them? She might not think he deserves to be there but she should mention him. He’s here. He’s in the room! Former prime minister, the guy who got them into government. I think there is just that lack of judgement about things like that that allowed, at the end of the year, the story of the Kevin Rudd/Julia Gillard rivalry to come right back into it.

It happened at the beginning of the week after the conference – Rudd lets go on the faceless men, they leak; then, someone faceless, leaks a secret report on him and his government, manna from heaven for the opposition.

Then the Australia TV deal, the ABC now permanently get the gig and that can again be interpreted as a snub to Kevin as he’s flying to Germany. That dynamic appears to be there. I thought that by the end of the year, with Slipper in the chair and everything else and Julia having her tail in the air that maybe Kevin would start to pull back but if anything it seems he’s not pulling back, his backers are not pulling back.

That is a long-winded way of saying the first part of next year; will circumstances arise where Kevin decides to have a go? Julia might decide to head that off and go to the polls, but her problem is she needs her vote to be above a primary of 31% to be in striking distance. She can be in the late 30s because if you add that plus the Green vote you’re sort of getting there. But 31? Not enough on a primary?

Divided we fall

Mark: On the disunity-is-death thing, would you say that was one of the things that really weakened the Howard government in its last years, the Costello leadership issue?

Sinodinos: It was one of those things where if people expected John Howard to go with a gun to the head, that wasn’t going to happen, that’s not his style. I think the psychology of that was all wrong, the McLaughlin note as a way of levering him out. What I found about leadership tensions in the Howard government was that they would erupt from time to time but the work of the government went on at the level just below that.

Peter Costello never formally challenged John Howard for the Coalition leadership. AAP/Alan Porritt

Even at the height of the McLaughlin thing we, the PM’s office, had quite good relations with the Treasurer’s office. It was almost like, fact of life, like the weather that these things would be happening. You just sort of got on with the work because at no stage was Costello contemplating pulling the pin. It wasn’t like a Keating 1991 scenario where the threat was always that “If I don’t get my own way I’m going to bring the whole show down”. That didn’t seem to be his modus operandi at all, which is probably in a sense to his credit and may have been to his disadvantage.

The point is he never wanted to bring the whole show down so he always maintained cooperation even during periods when relations were strained.

Guiding philosophy

Mark: On a personal level, what is the governing idea that gets you out of your political bed in the morning? You’ve spent a life inside politics, you seemed to think you wanted a life outside it but then you came back. What gets you doing it all, working the late nights, fighting the fights?

Sinodinos: Excellent question. Can I answer it on two levels? In terms of ideas, the idea that we get better off, that we get freer, better able to meet individual aspirations is to me a good thing and to me the idea that I can make a difference to that is quite motivating.

The other thing that gets me out of bed in a way is that if you can help in situations of negotiations with other groups and get a common outcome, where everybody feels they got something out of it, I find that quite energising. I remember with the GST package when we finally got an agreement with the Australian Democrats, they got a fair bit of what they wanted, we got a fair bit of what we wanted.

I mentioned in my maiden speech, what’s a good reform? Getting 70 or 80% of something is better than getting zero of something that is perfect, you won’t get it. The idea that you get people together and they agree, fundamentally I quite like but it has to be an agreement about something that keeps things going and improves things. But I quite like that idea.

We are the sort of society where ultimately we don’t want anyone left behind. We ultimately want a society where we feel we are in this together. One of the dangers of societies that evolve, this is broadly, not just Australia, is you don’t want a situation where it becomes so stratified because of wealth or whatever that groups end up having not that much in common.

Then you ask yourself, “what is it that brings us together?” then you get this idea of social cohesion. Not in a racial or colour or creed sense, but in a sense that there is something in it for all of us, that really appeals to me and in the modern world there are all sorts of pressures pushing and pulling at that.