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UNCLAS SECTION 01 OF 02 MELBOURNE 000151 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV AS
SUBJECT: Victoria Opposition Leader Remains Upbeat Despite Polls 
 
Ref: Melbourne 121 
 
Summary 
------- 
 
¶1. (SBU) Ted Baillieu, Leader of the Victorian Opposition, believes 
that former Howard Treasurer Peter Costello will run for reelection 
in the next federal election, signaling a challenge to Malcolm 
Turnbull for national leadership of the Liberal Party.  Baillieu 
says that he is optimistic about his party's prospects in the next 
Victorian election, but recent polls and his frustration with the 
media indicate that the election will more likely be Labor's to 
lose.  End Summary. 
 
The Next PM that Never Was 
-------------------------- 
 
¶2. (SBU) Ted Baillieu, Leader of the Victorian Opposition, told 
Consul General on December 16 that he believes Peter Costello will 
run for reelection in the next federal election.  According to 
Baillieu, this would signal Costello's intention to challenge 
Malcolm Turnbull for leadership of the federal opposition.  While 
Costello himself has remained silent on the issue (reftel), some see 
this as his last chance to realize his long time ambition to become 
Prime Minister.  Baillieu suggested that Costello would like to be 
seen as "saving the party," and believes that he is waiting for the 
Liberal Party to ask him to return.  After the November 2007 
elections, Costello said he was leaving politics to pursue a career 
in the "commercial world;" insiders say that he having a hard time 
finding a suitable position in the private sector.  Nominations for 
Liberal pre-selection in Higgins (Costello's seat) are expected to 
be due by mid-April. 
 
¶3. (SBU) According to Baillieu, federal-state cooperation in the 
Liberal Party leaves much to be desired.  The Victorian Liberal 
Party apparatus, run by former Howard Chief of Staff Tony Nutt, is 
much more concerned about commonwealth issues and seldom consults 
with Baillieu on joint strategies.  (Note: Nutt is a highly regarded 
political strategist who has also served as the Liberals' state 
director in New South Wales and South Australia.  End note.) 
Liberal Party Senators are "more of a problem than anything else." 
Responding to Consul General's question, Baillieu said that Liberal 
"stars" such as Costello or former Victoria Premier Jeff Kennett are 
seen more as liabilities than assets to the state's Liberal Party 
due to personality-based divides within the party. 
 
A Quiet Opponent 
---------------- 
 
¶4. (SBU) Baillieu said that he is "optimistic" about the prospects 
of a Liberal victory in the next state elections.  Thanks to a 
"solid" coalition with the National Party, he calculates that the 
Liberals must only win 13 (of Victoria's 88) additional seats in the 
elections which are to be held sometime prior to November 2010.  An 
opinion poll released on December 18, however, showed Labor Premier 
John Brumby as the preferred Premier over Baillieu by a spread of 22 
percentage points.  On a two-Party preferred basis, Labor leads the 
Liberal Party in Victoria 57 to 43 percent.  (Comment: Baillieu lost 
the last Victorian election to former Labor Premier Steve Bracks and 
observers say that he is still not getting any traction with voters. 
 Baillieu is often described by others as a small "l" liberal. 
Insiders say that these instincts make it hard for him to beat the 
"law and order drum" - an important issue in Victoria.  End 
comment.) 
 
¶5. (SBU) Despite this bad news, Baillieu was upbeat and said that 
the Liberals intend to bring the fight to Labor on four fronts.  He 
sees corruption and the provision of water, public transportation, 
and law and order as areas of weakness for the Labor government. 
Baillieu described his approach as fostering a gradual "snowball" 
accumulation of public discontent with the Labor government rather 
than causing a "sudden avalanche."  Consul General noted that some 
observers have criticized Baillieu on not being enough of an attack 
dog in his role as Leader of the Opposition.  Baillieu's visible 
frustration at this remark indicates that this was probably not the 
first time he has received this feedback, but he simply replied that 
he preferred not to run a "negative campaign." 
 
Apathetic Media? 
---------------- 
 
¶6. (SBU) The media, Baillieu said, has hindered the Liberal Party 
from getting its message out to the public.  He attributed this to a 
general decline of media interest in state politics.  He claimed 
that there are ten times as many reporters in Canberra's press 
gallery than in Victoria's.  John Hamilton, Associate Editor of the 
daily Herald, however, told CG that Baillieu's Liberals have been 
not been proactive in reaching out to the media.  Hamilton went on 
to say that he was not even able to name the Liberal front-benchers. 
 
MELBOURNE 00000151  002 OF 002 
 
 
 Other observers have noted that Baillieu's struggle with the media 
is at least partially due to the number of political "spin artists" 
employed by Premier John Brumby. 
 
Comment 
------- 
 
¶7. (SBU) While Baillieu said that he was optimistic about the 
Liberal Party's chances in the next state election, few in Victoria 
share Ted Baillieu's optimism.  A federal Liberal MP recently told 
post that even he is unable to discern exactly where Baillieu is 
taking the party and acknowledged that leadership in Victoria's 
Liberal Party is "thin."  Victoria was at one time, the "jewel in 
the crown" for the Liberal Party; former Prime Ministers Robert 
Menzies and Malcolm Fraser both hailed from the state. 
Historically, a Victorian has served as either a federal level 
leader or a deputy leader for the Liberal Party.  The absence of a 
Liberal leader in the federal opposition, Labor's nine year 
domination of Victorian politics and sinking polls all point to 
tough times ahead for Ted Baillieu's Liberal Party. 
 
THURSTON