Hockey: Not Your Average Joe (14 page)

Joe wanted $250 million, and, despite being in the minority at the end of the deliberations, he had Howard on his side. If he had not been able to deliver it, a promise he had staked his ministerial post on, he would have had to step down. But he wouldn’t have been alone. Entsch, who was a parliamentary secretary, also went and saw the prime minister. ‘I said to him that he would not be losing one person from his ministry, he’d be losing two. I would also resign,’ Entsch says. While Joe is gregarious and friendly, and his friendship with Entsch was solid, he can carry the odd grudge, too, and his relationship with Ian Macfarlane is evidence of that. It was around this time, when Joe was Macfarlane’s junior minister, that their tense relationship was cemented, and it would resurface again in 2013, once Joe was in charge of the Treasury coffers and Ian Macfarlane, as industry minister, was fighting for the future of Holden.

Joe saw his relationship with Howard grow stronger during this period, despite still butting up against him every now and again, but particularly when it was viewed that he was straying into another minister’s territory. At one point, as the minister for small business as well as tourism, he criticised plaintiff lawyers. His entire office later overheard the conversation between the prime minister and his young minister, helped by Joe holding the phone several centimetres from his ear. The prime minister’s anger was palpable, believing Joe had deliberately intruded into assistant treasurer Helen Coonan’s area. Small business needed a champion, too, Joe fired back, as well as someone to speak out about public liability issues. Those listening to the call were in agreement that Joe came off second best. To Joe, public liability issues were rife in a climate where people were quick to sue, and a few celebrated cases meant the tourism industry saw itself drowning in risk. New Zealand became a big competitor in the adventure market because a system operated there that provided a cap on payouts. In Australia, insurance costs continued to skyrocket, providing another obstacle for small tourism operators.

While much of Joe’s focus was on tourism, small business issues also surfaced regularly. One of these was a home goal, after he agreed to a Sky television interview with his father, conducted by David Koch. It had the potential to be a great yarn. Joe’s father had arrived in Australia as a new immigrant, pulling himself up with hard work, to become a respected businessman. He had a strong work ethic and understood what you needed to do to get ahead. How did you set about doing that, David Koch asked?

‘Screw the government,’ Joe’s father, Richard, answered.

Joe, with the camera rolling, was lost for words. He couldn’t believe what his father had just said. Didn’t he realise his son was the country’s small business minister? Koch couldn’t stop smiling.

‘Dad, you can’t say that,’ Joe said.

‘But it’s true,’ his father replied.

‘But Dad, I’m the minister for small business.’

As the cameras rolled, Richard barely paused. ‘I know,’ he said, ‘but you have to screw the government to get ahead.’ Richard went on to explain how earlier in his life he would take his ration entitlements and then game them on the black market. Joe just kept shaking his head.

Just as Joe’s management of the GST controversy and HIH coloured his time as financial services minister, it was the parameters of his role as tourism minister that raised the ire of some. Joe saw his job as being in charge, and he didn’t baulk at crossing any lines. ‘He used to like to know the faces of those who wrote the briefs,’ Mazitelli says. That meant a public servant could turn around to find his minister looking over his shoulder. Mazitelli liked that, but some of his colleagues didn’t.

Chris Brown tells a similar story, once being summonsed to Joe’s office. ‘He wanted to show me the advertisement he had produced,’ he says. ‘I’m thinking, let’s ignore the governance issues for a second here, how cool is this that the minister’s just designed an ad for us.’ Others are more circumspect, and several of them use the word ‘interference’ when describing how active Joe was during this period.

‘I would say that he was more involved than the textbooks would prescribe a minister to be,’ one senior tourism figure said. ‘Joe struggled with the boundaries of what a minister should do and what a public servant should do,’ another said, adding that Joe was also keen to grow the careers of people who worked with him.

Joe couldn’t care less about that criticism, or the fact that he would frequently go around the boards running organisations to find what he needed to know. And in some ways, that modus operandi worked for him. ‘I’d never mark someone down for being enthusiastic,’ John Howard says. ‘Good public servants like enthusiastic ministers. Voters like Joe’s enthusiasm.’

As the 2004 election neared, Joe was hopeful that the lessons he’d learnt as tourism and small business minister would hold him in good stead for his next challenge. When John Howard handed out the jobs next time, he had his eyes on a Cabinet post.

TWELVE

Joe sat down
to write himself a letter. As minister for human services, he wrote to every new parent, gifting them his government’s baby bonus. And now, in 2005, he had joined the parent club, filling out the required form himself. ‘Dear Joe …’ His staff looked on, laughing. Joe was enjoying it, too, but that didn’t last long. He turned the first page, and then the second. And then the third. ‘How many pages are here?’ he demanded to know, as staff slipped discreetly out of his office. He kept counting, until he got to 29; 29 pages of a form for a payment that wasn’t means-tested. Wendy Black, one of his advisors, was still in the room watching. She’d seen him do this with other forms, checking whether they were user-friendly, and he was leaving no doubt now that this one had failed the test. Why was the department gathering all this information? he demanded to know. Why was it needed?

‘I went bananas,’ Joe admits. His mood only worsened after learning that Centrelink held 275 kilometres’ worth of files, including photocopies of birth certificates, drivers licences and even electricity bills. A similar check at Medicare found that the area needed to store the forms ran to 3 square kilometres. Joe thought it was ridiculous and he told Jeff Whalan, head of Centrelink, exactly what he thought. How could one voter receive four different letters on the one day, from different agencies within his department?

Other examples abounded, and Joe’s new chief-of-staff, Rod Whithear, would add more to his inbox regularly. He remembers the briefing that showed 100 million letters each year were sent out and the note that showed $82 billion in payments were made; that meant $2600 was pumped out every second of every day by the department. Joe began to rant and rave, his arms flailing around him. Why did he need to provide his income details and his travel history for past years to get the baby bonus? And what was this about how many times his partner had been in and out of the country? She ran a bloody international business, he yelled. ‘This is a non–means tested payment!’

Jeff didn’t say much. He took the form his minister handed him. ‘You try and fill it out,’ Joe told him.

Children weren’t really in the Hockey-Babbage wedding plan, as much as Joe would have liked them to be. Melissa thought it was crucial, as a couple, to have financial security. They both worked long hours and Joe resigned himself to the fact that he would not have his own children. ‘Then one day she woke up and said, right let’s have children. We’re moving to the suburbs, trading in the sports car for a four-wheel drive and we’re having children,’ Joe says. Joe thought all his Christmases had come at once. At 39, Melissa fell pregnant quickly and Joe, the minister for human services, began to learn all those things reserved for expectant parents, including the regular visits to an obstetrician. ‘I said to him [the obstetrician], if anything goes wrong I’m the guy who issues the provider numbers for doctors,’ Joe jokes.

Xavier Augustus Babbage Hockey had been born on 29 July 2005, in North Sydney’s Mater Hospital – the same hospital Joe had been born in, 40 years earlier. Augustus had been chosen after Joe’s dad, Richard Augustus. Xavier took his first name from Frances Xavier, a Jesuit saint who devoted his life to serving others. It was a high point in Joe’s life, as it is for almost all new parents – his first-born son. But it was the form he needed to fill out – and which thousands of other parents would fill out – that now seemed to be creating as much emotion.

‘Fix it,’ he told Jeff Whalan. (By the time their second born, Adelaide Bede Babbage Hockey – Bede was Melissa’s father’s middle name – arrived in December the following year, in 2006, the 29-page form was gone.)

It had been only 14 months earlier, in October 2004, that Joe had been appointed minister for human services by John Howard after another win at the polls. From the beginning, it was made clear the job wouldn’t be easy. No department existed; it would be made up of a group of agencies that weren’t used to sharing their patch, or information. Joe’s task was to bring them all together.

Joe sat behind his desk, and turned to his inbox, picking up three notes from Centrelink. The first one alerted him to the arrears notices that would be sent out just before Christmas, for all money owing. Joe read it. Then he read it again. ‘I thought, what the hell is that about?’ The second one revealed that Centrelink was about to sign off on a contract with Telstra for $200 million. The memo on his desk didn’t ask for his authorisation to spend that amount of money, just that he note it. ‘Why am I noting this?’ he asked everyone who walked passed his desk. The note held him accountable for a decision he had no role in making.

He called the head of Centrelink, Sue Vardon. Vardon didn’t take a backward step. She was doing her job, she told him. Well, he wanted to do his, he retaliated. Before their first meeting, Joe put in a call to Dr Peter Shergold, who headed up the Department of the Prime Minister and Cabinet, the top job in Canberra’s bureaucracy. He confirmed to Joe that those were now his decisions to make; it was not the role of a public servant, however senior. ‘I remember saying to him, you need to exert your authority as the minister in the first meeting,’ Shergold says now. ‘Your first 24 or 48 hours are crucial here. You have to make it clear that you are going to be the minister in charge of this department.’

Sue Vardon walked in. Joe intended to dismiss her. But she beat him to the punch, announcing she was resigning as head of Centrelink. Sue had thought the creation of a department was a strange step but accepted it was open to the government to do that – but it was unlikely their relationship would have worked. Just as he had in tourism, Joe intended to interfere in the bureaucracy as much as he needed to get the job done. He wanted his footprints all over everything, and Sue was used to doing it her way.

Joe accepted her resignation, and turned his eye to the next hurdle. One by one, he hired new CEOs, sacked boards, changed reporting lines and restructured units. The biggest hurdle was an ingrained culture that didn’t acquiesce to a minister. At least one department head sought legal advice on whether Joe had the right to exercise his authority. This was because while he was in charge, some chief executives had their own piece of legislation that made them, under law, responsible for acting in the best interests of their organisations. So when he had to, Joe went over their head, to his prime minister, John Howard.

At the end of his tourism stint, Joe had been hoping for a Cabinet post. That didn’t come, but at least this time he had his own department, with an assigned department head, Patricia Scott, a respected civil servant who had come from the Department of Prime Minister and Cabinet, where she was deputy secretary. The first step was to create a department – with an ABN, an address, a dedicated IT system. Howard wanted to put Centrelink, the Health Insurance Commission, the Child Support Agency, CRS Australia and Australian Hearing and Health Services Australia under one big service umbrella. The idea had come from Shergold, who saw a flaw in Cabinet discussions: the skill and experience that existed in the service delivery agencies was not being taken into account around the decision-making table. Howard wasn’t inviting Joe into Cabinet yet, but he would now head a new service-delivery department, with 35,000 staff and huge logistical challenges. While Joe broadly came under Nick Minchin’s senior ministerial finance and administration area, he determined early on that he’d try to run it his way.

Big changes happened swiftly. Queensland’s Fair Trading Commissioner, Matt Miller, was appointed to run the Child Support Agency. Jeff Whalan, who had headed the Health Insurance Commission, was given the sticky job of running Centrelink. Catherine Argall, the managing director of the Child Support Agency, became the head of the Health Insurance Commission, which several months later became Medicare Australia. As well as Rod Whithear, whom Joe had poached from finance where he was an assistant secretary of the department, he was joined by Wendy Black and Emma Needham as advisors; Nadia Levin took over from Sasha Grebe as press secretary within a short period, and later James Chessell also came on board. Patricia Scott sat atop the department.

Instead of spending money, department heads were told to cut chunks out of their budget. Whithear went to Joe with figures showing head office had grown in size from 500 to 1500 in eight years. A new building was on the drawing board, in a move that would have set the department back further tens of millions of dollars. Medicare sought Joe’s approval to record a significant operating loss for the year. Joe said no.

Catherine Argall told Joe she would need to lay off 400 of her 6500-strong staff to meet her budget. ‘Do it,’ Joe responded. He wrote to treasurer Peter Costello and Nick Minchin, telling them 400 people would be sacked to stem losses of $20 million each year.

The culture in a public service can be opaque and unwieldy, especially in organisations that are allowed to flourish in such a way, and much of Joe’s time was spent talking to CEOs about how they could change the attitude within their part of the organisation. That was a big ask. Public servants become used to working for interested and disinterested ministers, and often do their job without much interaction with them. Interference is frowned on, and in a repeat of his time as tourism minister, some senior public servants thought Joe was overstepping the mark. They didn’t like that he called it ‘my’ department, and complained to their bosses. It’s a small example, but telling.

Joe’s ministerial style had developed in tourism, and an approach where he was happy to work with, and inside, and around the department had become part of his tool kit. He was the elected minister and would cop the wrath of voters if they didn’t like something, so he believed there were few lines a minister couldn’t cross when it came to the department they led. After being presented with the sick leave statistics from each agency showing an average of 9.5 sick days per year, which was slightly higher at 11.5 days in the child support area, he had performance markers on sick pay put into the employment contracts given to department heads. He wanted the department to be seen as the retail arm of government, an ideology illustrated by his introduction of ‘drought buses’.

Jeff Whalan was given a week by the minister to scour the nation for vehicles that could act as drought buses – taking Centrelink offices on the road to outback places where farmers, suffering drought, didn’t have to visit a city office. Farmers had an enormous amount of pride, National MPs had told him, and many didn’t want to make that trip into town to admit they needed help. The mobile buses travelled the backroads, welcoming farmers where they were needed. The buses boasted connectivity, with a big satellite dish on top, as well as specialists onboard. The number of farmers seeking assistance increased dramatically.

It was a clever piece of infrastructure – Joe’s department was the place where most Australians had their interaction with government, but its customer service focus was appalling. Joe wanted to run it like a small business, irrespective of its size. It had worked in tourism, and he believed it would work here, too. He was happy to play the good cop, to his CEOs’ bad cop routine, and every time he visited a Centrelink office he’d scrawl across the wall. ‘I’m very proud of you. Thanks for what you do. Your minister Joe Hockey.’ They’d never seen that before and some just sat and stared. But he knew they liked it.

The Child Support Agency, which had been the poor orphan previously, got a boost in funds and a refocus. Never wanting to be too far from a headline, Joe’s campaign against ‘deadbeat dads’ gave talkback fodder, and allowed him to never stray too far from the spotlight. Significant changes were made legislatively, but he also ordered non-paying support parents to be stopped at airports. A public campaign was launched, after it was revealed some were only paying a few dollars a week. Joe milked it for all he could, but walked a fine line, too. Women were also responsible for non-payment of child support, and some shocking cases surfaced. With the staff in that area of his department being almost 80 per cent female, he needed to be careful of attacking one gender over the other.

If this period has to be characterised by one thing it would be Joe’s hatred of red tape. He confronted it with the baby bonus, but it seemed to create a hurdle at every opportunity. Each fortnight he would have a meeting with all agency heads, demanding they put on the table their new idea for cutting bureaucratic claptrap – whether it was on forms, in meetings, or in regulations involving professional bodies. It was also this assault on red tape, and a bid to stamp out fraud, that led to Joe’s determination to introduce an access card. Joe had learnt in a chat with the Australian Federal Police (AFP) that Medicare cards were involved, in some way, in more than half of all identity fraud cases. Conceivably, one Australian could apply for 17 different cards. You couldn’t switch any of them on or off, either.

‘It was a joke,’ Joe says. A chip-embedded Medicare card was being trialled in Tasmania, but it was fairly insignificant as a prototype or a national pilot study. As financial services minister, Joe had seen advances in ATM use and how some banks were interacting with their customers around the world, but identification constantly stood out as the biggest impediment to improving service delivery. Joe’s goal was to morph security and entitlements, and to do that Australians needed a smart card. To many, including in his own party, it seemed like another attempt at introducing the Australia Card, a controversial plan by Bob Hawke two decades earlier for a national identity card.

Resistance grew loud and strong. Joe expected that, having seen how much angst surrounded the sharing of information between different areas of his own department. Still, he was determined and headed off to Paris and London with Whithear to look at what technology could be used. His Cabinet submission, which followed that trip, requested $1.1 billion for the technology to do it. Howard strongly supported him but others didn’t, despite this proposal involving a voluntary card that would only be used for accessing taxpayer benefits. Electronic banking had already taken off, and the private sector was embracing e-commerce. But government is often the last to embrace new technology, and the experience in the UK, where banks already boasted a pin and chip system added further complications as the Australian community did not then understand the technology. The UK had a major identity card project running, and concerns about this far-reaching project drew parallels with Joe’s plan and created a tougher uphill battle. He became a bit like a fire warden, putting out spot fires.