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How clashes with a minister helped get the future PM fired

Sep 10, 2021

Advertisement After his October 2004 federal election victory, John Howard made few changes for his fourth-term bench. He promoted two new junior ministers and seven new parliamentary secretaries but otherwise kept his Cabinet largely intact. One of the winners in the mini-reshuffle was Fran Bailey, who held the marginal seat of McEwen in Victoria. It was her second promotion in six months, having been elevated to employment services minister in 2003 – now she was in charge of small business and tourism. Minister for Small Business and Tourism Fran Bailey became increasingly suspicious that she was being bypassed by the TA board and directed the blame at Morrison. Credit:Craig Abraham Having run her own farm and retail enterprise, Bailey knew a lot about small business, but tourism – especially international tourism – was relatively new to her. She publicly confirmed this within days of her appointment, telling the Gold Coast Bulletin she had “no experience” with tourism at the national level. Bailey’s uncertainty about her new role was matched by tourism industry suspicion concerning their new minister. It was a bad start. Meanwhile, after serving for four years as state director of the NSW Liberal Party, Scott Morrison was looking for a chance to return to the tourism sector. Howard had told him that if he did a good job, the next job would look after itself. In late 2003, the Howard government announced that four existing tourism organisations would be merged to form Tourism Australia. And following a three-month hunt, Morrison was offered the $320,000-a-year role as managing director of the federally funded body – reporting to the TA board chairman (and former deputy prime minister) Tim Fischer and to the new minister for small business and tourism, Fran Bailey. Bailey had no say in Morrison’s appointment, nor had she had much to do with him in his previous Liberal state director role – she was a Victorian. But a few weeks after Bailey had been sworn in as the minister for tourism, Fischer and his deputy chairman, Tony Clark, asked to meet her for lunch. Bailey assumed it would be a somewhat bland meet-and-greet, but those familiar with the meeting say the pair came to Canberra for one reason only: to warn her about Morrison, who was already proving difficult to handle. Morrison was a marketing man and wanted to be the face of tourism in Australia. After stints at competing tourism lobby groups and the NZ Tourism Board, Morrison knew the industry and its characters intimately and didn’t seem interested in kowtowing to the minister. Within months of that initial introduction, Bailey privately began to criticise Morrison for trying to steal the limelight, including by issuing press releases without approval from her office. “There was a clash of personalities from the start,” one Howard government staffer says, adding that Morrison “just had a strong self-belief in what he was doing, and he wasn’t going to let the minister stop him”. Scott Morrison, then managing director of Tourism Australia, in 2004. Credit:Michele Mossop Those familiar with the stoush believe Bailey wanted more transparency in, and influence over Tourism Australia, while Morrison did everything he could to avoid dealing with his minister, resulting in accusations that he was bypassing her office on key decisions. One of the few things that Morrison and Bailey agreed on was the need to attract more tourists to Australia. Within six months of Morrison taking on his new job, the TA board kicked off the search for a new ad agency to help lure international travellers. Selling Australia to a global market is an ad agency’s dream and many leading agencies bid for the work. Morrison had already worked with international agency M&C Saatchi, which had engineered the successful “100% Pure New Zealand” campaign. Advertisement Inside advertising circles, rival agencies were critical of the tender process, complaining that the criteria were skewed towards an individual agency to deliver a predetermined result. “The advertising industry was up in arms,” one tourism insider recalls. “There was absolutely no doubt he [Morrison] wanted Saatchi to make the ad.” TA did little to counter this narrative when it refused to reveal how many agencies had tendered for the work or which companies had made the shortlist. This got back to Bailey, who demanded to know what was going on, not least because any contract worth more than $5 million required ministerial approval. “I was the one that had to sign off on $180 million worth of funding,” Bailey says. “Scott is unrelenting in pursuing his agenda.” Anticipating scrutiny, TA called in auditors from KPMG to review the tender process. Government sources who worked alongside Bailey at this time believe that her primary concern was whether the process was in line with the federal government’s procurement guidelines which, if breached, could lead to a minister being sacked. As it turned out, she was right to be concerned. Auditors would later find that documents submitted by TA to assess the ad agencies were not comprehensive and the process lacked transparency. Former government staff report that Bailey became increasingly suspicious that she was being bypassed by the board and she directed the blame at Morrison. She was eventually persuaded to sign off on the first tranche of funding for an advertising campaign after being told Australia was at risk of missing out on lucrative advertising space in target markets if she delayed the process any longer. In February 2006, after spending millions of dollars on market research, TA unveiled its big new international advertising campaign, which asked the world: “So where the bloody hell are you?” It was meant to entice tourists in key markets — including the United States, Britain, Germany, Japan, China, South Korea and New Zealand — and was the culmination of many months of work by marketers and the TA board, especially Morrison. A star is born ... Lara Bingle in the $180 million “Where the bloody hell are you?” Tourism Australia campaign. Bailey and Fischer went to see the prime minister in Sydney to show him the final product. There were 12 different versions but the one in which the smiling, bikini-clad model, Lara Bingle, voiced the tagline was considered a standout. Bailey was rightly nervous during the screening: a lot of money had been poured into the campaign and its catchphrase was expected to grate on some. But after seeing the ad with Bingle the first time, Howard is said to have turned to Bailey and smiled approvingly, saying: “She’s a very nice young woman, isn’t she, Fran?” Tourism Australia had even anticipated criticism of the use of the word “bloody” as a little crass, preparing a pamphlet for the ad’s launch to defend its decision. Within days of its launch, the campaign was making headlines globally – it was proving somewhat controversial but it was a marketer’s dream. Howard weighed in saying it reflected the humour of Australians: “I think the style of the advertisement is anything but offensive. It is in context and I think it’s a very effective ad.” But not everyone agreed. Within days of the ad’s release, TA was accused of both pandering to crude stereotypes and offending foreign guests. Advertising standards bodies in Asia requested changes so as not to offend, and subtitled translations of the slogan were altered to reflect “cultural differences”. In the US, the American Family Association objected to the use of the word “hell”. Marketing gurus will tell you that there’s no such thing as bad publicity, but this was a fine line. TA, meanwhile, insisted it was all part of the plan. Just as he had done throughout his political career, Morrison put his faith in the data that had been collected over months and months by both TA and M&C Saatchi. The message had even been tested in key markets to gauge the reactions of the targeted travellers. TA argued it wasn’t going after Baby Boomers but “experience seekers”. These visitors were considered “opinion leaders”, an early term for “influencers”. The data showed these tourists were open-minded, affluent and educated. They weren’t going to be offended by some straight-talking Aussies. Despite the initial controversy, the hype began to work. Within days, the campaign had made headlines around the world, leading would-be travellers to hunt it down online, especially in the markets where it was banned. In one month, more than 100,000 hits were recorded on a dedicated website. The commercial was also downloaded in 80 per cent of the world’s 191 nations. But within weeks of its release, the campaign hit a major roadblock. Britain’s advertising regulator, the Broadcast Advertising Clearance Centre, banned the ad from free-to-air television. The potty-mouthed Poms had ruled that the word “bloody” was only acceptable in a clinical setting. The sticking point was section 6.1 of the advertising code, which stated that such words could cause serious and widespread offence. The ad was duly struck out. Publicly, Bailey was furious with the ruling, pointing out the inconsistency given Britain was the home of gauche and smutty TV shows like The Benny Hill Show and Little Britain. “How anyone can take offence at a beautiful girl in a bikini on a sunny beach inviting them to visit Down Under is a mystery to me,” she said. “The regulator is out of touch with British opinion. Based on our research and the initial feedback, the British are loving our cheeky sense of humour.” So where the Bloody hell are you? Australian Tourism advertising campaign in Japan. Privately, Bailey was starting to question the research of Morrison and his team. When she demanded to know whether anyone at TA had checked the British advertising code before commissioning the campaign, it soon became apparent that no one had. “It was really serious,” says another former Howard government minister. “It could have torpedoed the entire campaign.” At TA’s Sydney headquarters, Morrison and the board tried to convince Bailey that the censor’s decision was not entirely unexpected. He had effectively hired the firm responsible, he had seen the data, he believed the research, and he wanted to be the one to go to the UK and save the day. So he packed his bags and booked a flight. At the same time, the Howard government was plotting its own rescue mission: an Aussie delegation, led by Bailey, would fly to England. Bailey quickly called former British high commissioner Sir Alastair Goodlad to help arrange a series of meetings, and on March 10, 2006 she flew to London to push Australia’s case, shadowed by the ad’s star, Lara Bingle, now Lara Worthington. Morrison had been blindsided. He made his way to Europe but was excluded from every meeting. Bailey told Howard’s office that there was no way that Morrison could be involved in any confabs because “he’d stuffed it up”, according to government staff from that time. Bailey’s trip was heavily covered by the British media, which was highly critical of the BACC’s ban. In London, Bailey met with Sir Gordon Borrie, chairman of the Advertising Standards Authority, and James Purnell, the UK Minister for Creative Industries and Tourism, to seek advice. Bailey also met with Baron Saatchi, who’d founded the firm responsible for the ad alongside his brother, Charles. Inside M&C Saatchi’s London office, meanwhile, staff uncovered a range of commercials that also had used the apparently offensive word “bloody”. All Morrison could do was watch from the sidelines. Bailey requested that the BACC review its finding and returned to Australia confident that the Brits would change their minds. Shortly after midnight, she was woken by her phone ringing: Britain’s advertising regulator had reversed its decision. Several former TA staffers pinpoint the London trip as the tipping point in the already tense relationship between Morrison and Bailey. Months earlier, at the campaign launch, Bailey had been unhappy with the role she had been allocated and angry at Morrison for being front and centre. Now she had been the leading lady in a David-and-Goliath battle that had pitted the Aussies against the Brits. Initially, the TA board had been very supportive of Morrison but board members increasingly became annoyed when they learned what Morrison was doing by reading about it in a newspaper. On one occasion, Morrison dreamed up a campaign to encourage Australian workers to use $11 billion worth of stockpiled annual leave. TA had then coined the slogan “No Leave, No Life” as a way of incentivising working Australians to take some of their collective 70 million annual leave days by helping them find holiday ideas and destinations. But again, Bailey and some board members had been kept in the dark and were gobsmacked when they read about it in the media. To complicate matters, the government was in the midst of trying to negotiate its contentious WorkChoices bill, a set of controversial industrial relations reforms that limited the work rights, protections and bargaining power of millions of Australians. Bailey and some board members felt that the new Tourism Australia campaign had a threatening tone, that it looked as if the federal government was forcing workers to use up their precious leave entitlements. Reflecting on this period, Howard says he knew that the relationship between Bailey and Morrison had become unworkable: “I was aware things were progressing as they did. The explanation for the dispute was a clash of personalities. They obviously didn’t get along.” TA chairman Tim Fischer broke the news to Scott Morrison, sacking him just over halfway through his three-year contract. Credit:Brock Perks After returning from Britain, Bailey sought advice from then secretary of the Department of Prime Minister and Cabinet, Peter Shergold. The pair had a heated discussion about Morrison’s future, but Bailey had essentially made up her mind: Morrison no longer had her backing or that of the board. In July 2006, Bailey met with Howard and convinced him the relationship had deteriorated to the point where Morrison had to go. “I accepted the minister’s advice and backed her,” says Howard. That month, Morrison was at a TA roadshow in regional Victoria when he got a phone call requesting he return to Sydney. Fischer broke the news, sacking him just over halfway through his three-year contract. Those closest to Morrison at the time believe he didn’t see it coming. “He would have thought he was safe and should be running the place,” one of his friends quips. “He really didn’t see it, and he was gutted.” The Accidental Prime Minister by Annika Smethurst. Morrison’s departure was formalised at a board meeting in August 2006. Tourism Australia issued a statement saying Morrison had “agreed to depart” but it was clear he had been fired. And while the board praised his service, Bailey’s silence was deafening. This is an edited extract from The Accidental Prime Minister by Annika Smethurst, RRP $39.99, Hachette Australia. Out September 15. Save

John Howard Acquisitions

1 Acquisition

John Howard acquired 1 company. Their latest acquisition was Channel 3 Consulting on January 28, 2021.

Date

Investment Stage

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Total Funding

Note

Sources

1/28/2021

Private Equity

$13.89M

Management Buyout

1

Date

1/28/2021

Investment Stage

Private Equity

Companies

Valuation

Total Funding

$13.89M

Note

Management Buyout

Sources

1

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