Aussie govt leaps from triumph to crisis in a month

By Jack Taylor

SYDNEY (AFP): Australian Prime Minister John Howard has suddenly found himself mired in crisis with his government's future tied to the success of rescue efforts by his two most likely successors.

One, Workplace Relations Minister Peter Reith, is fighting to save his own political skin, but, regardless of his success, could leave the government deeply scarred in the run-up to an election late next year, observers believe.

The other, Treasurer Peter Costello, is in North America talking up the Australian economy in a plea for leniency for the sinking "Aussie" dollar as it threatens to trigger another interest rate rise and a new wave of inflation.

Although Australia's economy continues to bound along at a healthy pace, the opposition Labor party is extracting maximum political milage from the dollar's fall.

Costello is scheduled to meet influential Wall Street investors and traders in New York on Friday and will attend next week's meeting in Montreal of officials of the G20 group of world economies to discuss, among other issues, currency instability.

Howard, coasting along on the crest of Olympic success last month, is now in full defensive mode as he tries to protect the man who until 10 days ago was one of his strongest performers.

Demands for Reith's suspension have become deafening and, whatever happens, commentators believe he is unlikely to recover from the political wounds he has sustained in the last few days.

But Howard said Friday: "I don't believe the grounds exist for Mr. Reith to leave the government and I am sticking by him."

No polls have been conducted recently to show the extent of damage to the coalition by either crisis.

But a company that monitors talkback radio says no issue has ever generated such venom or vitriol from the Australian public as the scandal surrounding Reith.

Rehame Australia media monitoring agency says in the 10 days since the scandal broke more than 1,100 people have rung talkback radio on the issue and 98 percent of those have been "highly negative" towards Reith.

Reith admitted breaching government rules by giving his taxpayer-funded telecard and PIN number to his eldest son in 1994. Since then A$50,000 (US$26,000) worth of phone calls were made through fraudulent misuse of the card.

The affair should have stopped damaging the government when Reith agreed last Friday to pay the entire bill, but it has continued unabated because of discrepancies in his statements and those of his son, Paul, now a merchant banker in Britain.

One of these was by Paul Reith denying he ever gave the telecard to a young woman, "Miss X", who lodged with him briefly in Melbourne in 1994 and who was subsequently found to have used the card for calls.

But Miss X, identified this week as London-based nuclear medicine technologist Ingrid Odgers, said through her lawyers this week that not only did Paul Reith give her the card, but insisted she use it.

She also accused him of being a show-off.

But the affair has become more than just a trivial tabloid story.

"It is a political morality play about the character of John Howard's government," The Australian newspaper thundered on Friday. "The public won't lose interest in the story until every issue is cleared up."

The Federal Police have began another investigation into new claims surrounding the fraud.

Confidential documents leaked to the Sydney Morning Herald showed Friday that the government was alerted to likely fraud in July, 1998, more than a year before any investigation began.

The government's chief "head-kicker", renowned for his relentless pursuit of the Australian trade union movement and political quarry, now has as many enemies outside parliament as he has within it.

And, he is being shown the same compassion and sympathy from his political opponents that he has shown them in the past -- none.