Julia Gillard, beware: the Liberals want to do Craig Thomson slowly

• Dennis Shanahan, Political editor
• From: The Australian
• August 20, 2011 12:00AM

AS with so many damaging political scandals, it is not the original sin that causes the most trouble but how it is handled: a confession and apology or a denial and obfuscation.

The travails of NSW Central Coast Labor MP Craig Thomson fall into the second category and that's what is damaging Julia Gillard and the Labor government, as well as exciting speculation there could be an early election because of the furore.

Certainly, once a political scandal gets rolling it can develop a life of its own and this story has so many lurid and loose ends that a sudden catastrophe for Labor could loom from the media maelstrom arising from old union feuds, factional politics, fraud allegations, interviews with prostitutes or evidentiary contradictions.

Add to that Coalition desperation for an early election while the polls are so overwhelmingly in Tony Abbott's favour and the atmosphere becomes overheated and tense.

The Prime Minister has repeatedly pledged her support for the embattled backbencher and the Opposition Leader has sought to link her integrity to that of Thomson's and raise the ghost of NSW state Labor scandals to haunt the federal ALP.

For all intents and purposes the scene is set for a government-changing by-election in Dobell where a substantial swing against Labor since the election would wipe out any ALP candidate. All that is required is for the trigger of Thomson's resignation.

Yet the hard heads within the Labor and Liberal camps are not preparing for an imminent by-election or subsequent early election sparked by Labor losing its tenuous grip on minority government in the House of Representatives. The simple reason is that the Labor Party will do whatever it takes to keep Thomson in parliament and the Liberal Party knows it.

There is even the possibility of a "reverse Colston", where Thomson resigns from the ALP but sits on the cross-benches with the independents and Greens supporting Labor and keeping the Gillard government alive.

Labor "rat" Mal Colston resigned from the ALP in return for becoming a deputy president of the Senate and costing Labor control of the upper house during the Howard government's reign.

Senior Labor figures acknowledge the damage the speculation about the allegations against Thomson are doing and the potential for drawing Gillard into a mortal mistake about what has been said to parliament, the public or an inquiry long after the initial salacious allegations of credit card misuse for prostitution.

At the same time they know what is at stake with Thomson's fate and have allegedly already done a great deal to ensure he did not lose his seat through bankruptcy and are prepared to do much more politically.

Aware of the political reality, Liberal strategists and Abbott are intent on applying as much pressure as possible to an already besieged and unpopular government but are falling short of calling for Thomson's resignation.

On several occasions yesterday Abbott ducked the question of resignation and instead did everything he could to link Gillard's integrity, and the integrity of her government, to that of Thomson. Indeed, the Coalition's legal affairs spokesman George Brandis declared: "The integrity of Julia Gillard, by expressing her complete confidence in Craig Thomson, and the integrity of her government now depend on the integrity of Craig Thomson."

The Liberal pursuers of Thomson, of which Brandis is just one, have the added advantage that the allegations against him arise from an internal union dispute and are being vigorously pursued by all levels of the media, given the political import of the outcome and the prurient appeal of sex allegations. They also know that dragging out a scandal can be more damaging for a government than a quick resolution.