Leader of The Opposition
Latham was a strong supporter of Kim Beazley's successor Simon Crean, defending the leader against his critics within the party. He called Crean's principal frontbench detractors, Stephen Smith, Stephen Conroy and Wayne Swan "the three roosters". When Crean resigned the Labor leadership, Latham contested the ballot for leader against Beazley. On 2 December 2003, less than 10 years after entering Parliament, Latham won the vote for the leadership by 47 votes to 45. Kevin Rudd and Julia Gillard were early contenders for the leadership, but both withdrew in favour of Beazley and Latham respectively. At age 42, Latham became the youngest leader of the federal parliamentary Labor Party since its first leader Chris Watson, who became leader at age 33 in 1901. In his first press conference as leader, Latham championed his belief in a "ladder of opportunity" that would bring prosperity to all Australians.
The Howard government targeted Latham's brash personality and his colourful past. Howard characterised him as "Mr Flip-Flop", referring to a character in a children's book. Peter Costello attempted to damage Latham's economic credentials by referring to the experimental economic ideas that he had put forward as shadow treasurer, such as abolishing negative gearing and replacing the GST with a Progressive Expenditure Tax. Frequent references were made to Latham's temper; he was alleged to have broken a taxi-driver's arm in a scuffle arising from a fare dispute. However, Latham was uncharacteristically calm in the face of these attacks, surprising many members of the media.
On winning the leadership, Latham moved swiftly to heal the rifts in the Labor Party and to moderate his abrasive image. He appointed his predecessor, Simon Crean, as shadow treasurer, while also retaining a number of Kim Beazley's supporters in senior positions. In July 2004 Beazley himself was re-elected to the ALP front bench as Shadow Minister for Defence.
Latham gave a promise not to use the kind of "crude" language he had employed in the past. He and the party's foreign affairs spokesperson, Kevin Rudd, met the United States ambassador, Tom Schieffer, to stress Labor's continuing support for the Australian–American alliance.
In January 2004 the Labor Party national conference was held in Sydney. During the conference Latham received very positive media coverage and introduced his plans for early childhood literacy. He introduced an unusual campaign style, choosing to focus on "values" issues, such as reading to children and economic relief for middle-class Australia, which he termed with the political slogan ease the squeeze.
Latham also put forward plans to reform the education and health systems. In contrast to the intense stagecrafting of Latham's image at the conference, he boosted his profile by means of loosely organised "town hall"-style direct meetings around the country. By March, Labor had taken the lead over the Coalition in the opinion polls, and Latham had a higher personal approval rating than any opposition leader since Bob Hawke in 1983. Commentators began to discuss the serious possibility that Latham could be Prime Minister by the end of the year.
In March, following the Spanish elections at which the pro-American People's Party government was defeated, Latham sparked a new controversy by committing a Labor government to withdrawing Australian troops from Iraq by Christmas. At that time, Australia had about 850 troops in Iraq, mostly involved in patrol work and in training members of the new Iraqi defence forces. Howard accused Latham of a "cut and run" approach and said "it’s not the Australian way not to stay the distance".
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