CANBERRA OBSERVED: by News WeeklyNews Weekly
Divisions exposed in ranks of Victorian, NSW Liberals
, April 8, 2000
Prime Minister John Howard's biggest problem in deciding the timing of the next election may not be the GST, but internal problems in the Liberal Party. It is no exaggeration to say the largest two state parties - New South Wales and Victoria - are in serious trouble across a number of fronts.
Divided, dwindling in membership and strapped for cash, the branches will need considerable time and leadership to fix the problems before a federal campaign, which is going to be anything but easy.
Both states' party administrations have also suffered an exodus of experienced political operators.
The Liberal Party across Australia is suffering from a decline in membership, although the party is reluctant to reveal the true level of financial membership.Cash-strapped
Financially both states are drained of cash, with NSW in particular almost wiped out by the 1998 state and federal election campaigns.
Liberal insiders say that Federal Treasurer Ron Walker was furious when he found out how the NSW Executive had attempted to hide the level of the party's debts from the Federal Secretariat.
Even with the recent sale of the party's headquarters, the NSW branch is still believed to be in debt to the tune of up to $2 million and certainly is in no fit state to fight a federal campaign.
Mr Walker has been a brilliant fundraiser over many years, but he believes NSW has not been pulling its weight for some time.
Now with Jeff Kennett gone from the Victoria political scene, fundraising has become a much tougher job, with many big business donors drying up. Having to bail out NSW was never in Walker's plans.
The NSW branch is also bitterly divided between the Group a slef-styled "moderate" wing which has had a strong influence in the party for some time, and the so-called Right, which is in the ascendancy.
NSW is further complicated by claims of a "gay mafia" within the Group which exerts an influence in party matters including preselection far beyond its numerical size.
The Victorian Party is suffering its own set of problems which, though not as serious as those in NSW, is also deeply divided.
The Victorian Liberal Party is not so much an ideological battleground, as a faction war based on personalities.
Firstly, the party is still shell-shocked from losing the unloseable election to Labor's Steve Bracks, and it is only just starting to dawn on the party that Labor could govern for four years, or even longer.
Putting its entire faith in the leadership and vision of Jeff Kennett proved to be an absolute disaster leaving a talent vacuum as soon as he left office with rumors of a leadership challenge surfacing already.
But the bleeding in the party is more internal, as the two main factions try to shift the blame for the loss on each other.
On the one hand there is the force broadly known as the Kennett Group, which has been running the party for the past few years. On the other, there is the Costello-Kroger camp which was once a formidable group in the party, but which has taken a series of heavy defeats in recent times.
The recent elections for the state executive of the party have done nothing to solve the deep divisions in the party.
Powerbroker Michael Kroger has been concentrating more and more on family and business interests in recent years so that his influence over party affairs has greatly diminished.
The Victorian branch is also suffering from a collapse in membership, and a serious lack of political experience in head office.
Mr Howard is hoping that come July, when it will rain money from Canberra for a few weeks, Australia's attitude to the GST will improve.
Going early to the polls (perhaps in the post-Olympic euphoria) is one option he is keen to keep open.
But his problem is that the party is far from ready, administratively and financially, to fight a do-or-die campaign.
The other choice is to wait as long as possible.
But the danger is that the Liberal heartland will discover just how pervasive and invasive the new tax system will be and how heavily weighted it is to the top end of town.
Once small business, farmers, contractors and professionals see the new tax system in action, it won't simply be a matter of fixing the problems in the state branches, but finding supporters to hand out the how-to-vote cards.