The secret life of Matthew Guy

Matthew Guy kneels by the stream and takes a drink, awestruck by the mountain ash trees towering above.

He's on a trek along the south face of Mount Donna Buang near Warburton, east of Melbourne.

Victoria's state Opposition leader gets into the bush whenever he can. Here he is wandering through the ancient fern gullies of the Tarra Bulga national park in South Gippsland; there he is among the myrtle beeches that lead to Noojee's giant Ada Tree.

There are no taunts about lobsters or dodgy deals with developers; no need to come up with a pithy grab for the evening news or a strategy to ward off rats in his ranks. It's calm and quiet, two things the feisty Liberal leader often is not.

"I think he sees nature as a place of respite, in contrast to the busyness of his life," says environmental lobbyist Sarah Rees, who has become an unlikely friend for the head of Victoria's conservatives.

"He loves trees."

Who knew?

It's hard to reconcile this forest Guy with the planning minister who just a few years ago revelled in the controversy of pro-development approvals that earned him the title: Mr Skyscraper.

Smart, charming and fiercely determined, Guy is portrayed by his supporters as a savvy and compassionate politician with an unusual capacity for hard work and policy detail.

His detractors paint a less flattering picture: an impulsive MP who would dine with an alleged Mafia boss despite his "tough on crime" election pitch; a planning minister who made ill-considered decisions such as granting access and, possibly more, to developers with political connections or donations to offer. A shape shifter.

Guy, 43, is one of the state's most senior and identifiable politicians, but his legacy of past recklessness, the compromises of leadership and the challenge from a burgeoning right-wing force within his own party are making it tough for him to find an authentic political voice and narrative.

Twelve months out from an election that could make or break his leadership, the question remains: is he ready to be Premier?

"When I say lobster ...'

It's just after 5pm on a warm Spring evening in Melbourne, and the man who wants to govern Victoria is nursing a beer at a table outside a bar opposite Parliament House. The after-work crowd is streaming by. Some politicians are painfully self-conscious in such settings. Matthew Guy is not one of them.

Weeks have passed since The Age's incendiary "Lobster with a Mobster" story revealed his attendance in April at an intimate dinner with alleged Mafia boss, Tony Madafferi, and three of his relatives. (Madafferi, a hard working fruiterer and family man, denies any Mafia connections or wrongdoing and has never been charged with any offence.)

Tony Madafferi in his Noble Park store.

Tony Madafferi in his Noble Park store. Photo: SUPPLIED

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Guy insists donations were not discussed at the dinner - and have not been received since - but the extraordinary fallout should have been a salient lesson. It undermined Coalition's own law-and-order message, gave Labor ample ammunition to attack his credibility, and raised familiar questions about his propensity for devil-may-care politics.

Still, while some viewed the controversy as a major body blow, others read it as a blessing in disguise.

"On one hand I'm glad it happened," says former premier Jeff Kennett, Guy's ex-boss and now key confidante.

He says the lobster kerfuffle gave Guy "plenty of exposure" but would also toughen him after a stable two-and-a-half years at the Liberal helm. "You need to have a couple of bullets come your way."

The Lobster Cave restaurant, where the meeting between Matthew Guy and Tony Madafferi and friends was held.

The Lobster Cave restaurant, where the meeting between Matthew Guy and Tony Madafferi and friends was held. Photo: Joe Armao

Kennett is a fan, pointing to Guy's "steel trap" mind, and keen interest in policy and political history.

Not everybody in the Victorian Liberal Party agrees. On Guy's right flank is a swelling group led by young activists aligned with party president, Michael Kroger.

Some don't care if Guy loses the next election if it means they can replace him with a less moderate leader. They want control of the party and believe his blunders will help them get it.

At the time of the lobster dinner, Guy was visibly shaken when answering media questions, partly because it had damaged him publicly, but also because he suspected the story - which included details of a recorded phone call in which a former party figure appeared to solicit donations - was an inside job. "This is dirty, dirty politics," he told reporters.

Fast forward two months to beers on Spring St, and he insists he is unfazed by the Madafferi saga, smiling wryly as he asks a bemused waiter: "When I say 'lobster' does it mean anything to you?"

Guy tells Fairfax Media: "I went to country Victoria about two weeks after, and not one person asked me about it. They talked to me about the CFA, they talked to me about crime, they talked to me about how their children would ever be able to buy a house in Melbourne because it's so unaffordable.

"People want me to focus on the issues that matter. Who I dined with is not one of those issues."

Michael Kroger's living room

Liberal Party state president Michael Kroger.

Liberal Party state president Michael Kroger. Photo: Justin McManus

Since the fallout from that episode, Guy has worked hard to end the internal sniping.

One meeting, on Sunday evening, August 13, was crucial. Over beer and pizza in the living room of Liberal president Michael Kroger in inner city Prahran, he confronted his factional enemies, turning on the charm.

Two of Kroger's young firebrand allies were also there: James Newbury, a former staffer who last year defeated a Guy-supported candidate for preselection in the seat of Brighton; and Marcus Bastiaan, the charismatic 27-year-old who has waged a seat-by-seat war that some fear is pushing the Victorian branch too far to the right.

Liberal Party Victorian president Michael Kroger with his controversial protege Marcus Bastiaan.

Liberal Party Victorian president Michael Kroger with his controversial protege Marcus Bastiaan. Photo: Facebook

For three years, Bastiaan and his crew have worked over conservative church congregations, Probus groups, and "anyone who will listen" pressing them to join his version of the Liberal cause. The aim, they say, is to clear out "dead wood" MPs and rebuild the ageing party into a younger and more stridently conservative movement.

But their opponents, including most of Guy's parliamentary team, say the membership drive is nothing more than old-fashioned branch stacking.

After three hours, a "peace pact" was struck. It had been four months since Guy had backed a thwarted challenge to Kroger's presidency by Liberal stalwart Peter Reith. Now, he agreed not to put forward any of his staffers as delegates to state council, which decides the party's powerful executive.

He also claimed he'd do something about the sudden infiltration of new Italian members to Liberal branches in the eastern suburbs, which the Bastiaan forces view as "counter-stacks".

Newbury himself would be given a strategic role in the election campaign.

In turn, Bastiaan -??? who had never met Guy until that night - agreed to a ceasefire.

And Kroger?

"In my view, Matthew is the best Liberal state opposition leader I've seen during my years as a party member," the state president now declares. "He'll be the best - or among the best - premiers we've ever seen."

Nazis and Communists

Matthew Jason Guy has always seemed at home in politics and parliament; less so in a traditionally Anglo-dominated party of private-schools and privilege.

The son of post-war migrants and the product of a public education, Guy spent his childhood playing street cricket and riding his bike up and down the hills of outer-suburban Montmorency. His mother worked at the ANZ bank; his father in the Commonwealth public service.

Politics was always Guy's passion, and he joined the Liberal Party at 16 in the dying days of the Cain-Kirner government. Australia was in recession, with Victoria especially hard hit. The experience confirmed his concerns about Labor, and the deadening impact of interventionist government.

"Thousands of Victorian families were ruined," Guy recalled in his inaugural speech after being elected in 2006, "and I for one remember wondering in year 12 how I would ever get a job."

He needn't have worried. Young Matthew was on a mission and his CV tells the tale: marketing manager at the Victorian Farmers' Federation; director of research in Kennett's private office; chief of staff to then opposition leader Denis Napthine; parliamentarian at 32, leader by 40.

It was in Napthine's office that he met his wife, Renae, then also a political staffer. They have three sons: Joseph, Samuel and Alex.

Childhood friend Nick McGowan recalls meeting Guy as a teenager at a local Liberal branch meeting. McGowan a member of the Diamond Valley Young Liberals, and had sought Guy's support roll to the incumbent president.

The pair would later make a formidable team, trading blows with Labor students as members of the Latrobe University's Liberal Club. As club leader, Guy was both a strategist and warrior, campaigning for voluntary student unionism, building and culling alliances as needed.

"The side I've always seen is very compassionate and empathetic," says McGowan. "But there is a decisiveness about him, too - when he has a goal in mind, he sets about doing it."

Not surprisingly, Kennett, and Kennett's idol Henry Bolte, are political influences. But eyebrows were raised across political spectrum when, in 2011, Fairfax Media reported that Guy had pictures of Sir Joh Bjelke-Petersen and former US president Richard Nixon on his office walls.

Guy's world view has been shaped by two factors in particular: his "proud" Christianity, and the experience of his Ukrainian grandparents, who fled Stalin's Soviet Union in 1949.

The former is sometimes evident in the way he votes. He opposed the assisted dying bill, and refused to endorse gay adoption in Victoria unless it allowed for religious exemptions.

The latter is the key to Guy's political philosophy. For much of their lives under Stalin his grandparents did not know where their next meal was coming from. Nor did they know if they could they trust their neighbours, let alone their government.

"Socialism might read well in a text book, but after all that my family went through I learnt that in reality it saps the humanity from its people," Guy tells Fairfax Media.

Less well known is the impact of his family's suffering under Nazism. His great grandfather was killed by Hitler's invading forces, and his auntie died as a child when the Nazis wouldn't allow her medicine.

Guy's family had suffered at the hands of the hard Left and Right. It should not surprise that his political foes include the conservatives of his own party as well as Daniel Andrews-led Labor .

"Totalitarianism", he says, is the enemy.

"I grew up thankful. In my political life, I've just wanted to keep Australia as that peaceful, democratic proud nation that my mum and her family sought refuge in."

Building a reputation

It was his time as the Baillieu/Napthine government planning minister from 2010 to 2014 that Matthew Guy both made his political name but also tarnished it.

While he was embroiled in a myriad of controversies, two decisions in particular left big question marks over his judgment and, arguably, his fitness to be premier.

In 2011, Guy rezoned farm land at Ventnor on Phillip Island against the recommendations - initially at least - of his own planning department, the department's lawyers, the local Bass Coast shire, and two independent planning panels.

The Age later would soon reveal that the beneficiaries of the windfall included a sometime Liberal party member and family friend of former Kennett government planning minister and nearby resident, Rob Maclellan, who had lobbied on their behalf.

Within days of his decision, Guy was forced to overturn it amid protests from his own premier and cabinet colleagues, federal frontbencher Greg Hunt, and celebrity tweeter, Miley Cyrus.

The backflip triggered court action and a confidential out-of-court compensation payments by the government believed to total about $3 million. Taxpayers had footed the bill for what was, on the most generous of readings, a major ministerial error.

But if Ventnor raised a question about his judgement and susceptibility to influence, Guy's reputation for cavalier decision making was taken to a whole new level soon after.

By early 2012 Guy had become impatient with the apparent paralysis in the office of his famously cautious premier, Ted Baillieu.

Former Premier Ted Baillieu.

Former Premier Ted Baillieu. Photo: Supplied

In a surprise move in July 2012 , planning minister Guy rezoned 250 hectares of industrial inner Melbourne to create a development precinct, "Fishermans Bend", which effectively doubled the size of the Melbourne CBD.

There was no master plan or height limits, nor mechanism to capture, for infrastructure and services, any of the hundreds of millions of dollars the decision triggered in increased land values.

The unilateral rezoning - later slammed by an expert committee including former Liberal leader Robert Doyle as "unprecedented in the developed world in the 21st century" - delivered huge overnight paper profits to property owners and developers, including senior Liberal party figures, donors and supporters.

While acutely sensitive to criticism, Guy also seemed to relish the controversy. It defined him as a doer who took risks, and it contrasted him perfectly with what was increasingly known as do-nothing Coalition government under Baillieu.

Asked now if has any regrets about the way he handled the planning portfolio, Guy says: "Too many people get to government and become a footnote in history. I took an opportunity and I tried to do what I think is fundamentally good for Victoria. I gave that portfolio a red hot go."

"I'd rather have done that than done nothing, and be a bland, boring politician."

But can he win?

It's one thing to be a brash minister, but quite another to be be a winning leader. .

For all Daniel Andrews' problems with the CFA, youth crime, and rorting MPs, the polls have been relatively kind.

Meanwhile Guy has to walk a precarious path between the right-wing agitators of his Liberal base and the more moderate values of the broader Victorian electorate. It's a line the Turnbull government has conspicuously failed to tread.

Most in his ranks believe he's done a reasonable job. Guy is a good match for the Premier: both are young and progressive, both are bare-knuckled brawlers on the floor of the parliament, and both are politically ruthless when they need to be.

And as Victorian Liberal leader he's tried - albeit with varied results - to modernise his party: overhauling its antiquated campaigning structures; encouraging more women and multicultural communities to join; crafting policies earlier than any of his predecessors.

"It's never easy to stick your neck out but Matthew has been prepared to speak up for what he believes in," says upper house leader, Mary Wooldridge.

Nor is it easy to strike the right balance. Guy once declared he wanted the Liberals to do more to "reach out" to the gay community, yet he watered down Labor's same-sex adoption laws and vowed to scrap the Safe Schools program. He has solar panels on his house and privately supports the idea of a Great Forest National Park to protect high conservation areas. Just don't expect him to be vocal about it because it's at odds with the views of his Coalition partner, the Nationals.

It's not only on policy issues that Guy has been prepared to bow to the right of his party.

In September, just weeks after his pizza and beer meeting at Michael Kroger's home, Guy stunned his party room by telling them he'd agreed to install Nick Demiris, a former numbers man to arch-conservative Kevin Andrews, as the party's new state director.

Demiris is a polarising figure who many believe does not have experience to run an election campaign against Labor's well-oiled machine. He's also seen as an ally of insurgents who'd spent months undermining the parliamentary team.

It didn't take long for MPs in the party room to raise their concerns including, most notably, shadow treasurer Michael O'Brien. That meeting was a turning point: suddenly, it wasn't just those in the organisational wing questioning the leader.

Guy's subsequent frontbench reshuffle all but confirmed the emerging cracks. Rather than risking further unrest by ousting too many underperformers, he increased his shadow ministry to 25. Rookie MP Tim Smith, who is close to Kroger and Demiris, was the biggest winner.

"Modern politics is about compromise and consensus - it's not about crash or crash through," says Guy.

Mouthy Matthew Guy has had to learn the art of political silence and compromise.

Filling in the blanks

John Roskam, an influential Liberal powerbroker and head of the free-market thinktank, the Institute of Public Affairs, praises Guy as "committed and sincere", for his work unifying the party. He's been and inclusive leader, Roskam says, and has handled sensitive issues such as euthanasia well.

"However, 'Matthew still has to fill in the blanks on a few issues."

Institute of Public Affairs head John Roskam.

Institute of Public Affairs head John Roskam. Photo: Matthew Piper

"On climate change for example the Liberals will have to make a choice - do they want cheaper electricity prices or emissions reductions. The reality is you can't have both. While Labor has made its choice, the Liberals haven't yet."

It is criticism that could also apply to his wider plan, or lack of a plan, for the economy.

Some Liberals compare this policy reluctance unfavourably to Jeff Kennett's unapologetic, debt-busting program of the early 1990s. They say Guy needs to be more Kennett-like to differentiate the Coalition from Labor.

But Guy knows the time is not right to channel his inner Jeff. Victoria's macro growth statistics still look good. Victorians were abandoning their state in droves when Kennett was elected 1992. Now newcomers arrive here in record numbers.

Kennett had plans to flog off all but the most essential of essential public services. In 2017 there is little left to privatise and, besides, Kennett-style economic rationalism is on the nose.

The reality, says one well placed insider, is that on a range of big issues other than crime, Matthew Guy may not be seeking to differentiate himself from Labor at all.

Guy admits voters don't yet know enough about his broader agenda, but insists: "That will come in time."

At the very least, with 12 months until the election, the contest is competitive. Despite the recent tensions, the parliamentary team has been relatively united.

Policies are gradually being developed: more than 20 have already been announced on law-and-order, including tougher offences for carjacking and the "naming of shaming" of violent youths. And away from the cameras, Guy has quietly spent countless hours travelling country Victoria, just as John Brumby did before 1999 election.

Guy's aim is to decentralise metropolitan Melbourne's arguably unsustainable growth into rural and regional towns. It might not be headline grabbing, but it's the first time an opposition leader has prioritised management of Victoria's booming population.

In a sense, it gives you a clue about the kind of Premier he would like to be. Bold. Reformist. Anything but "bland".

"I want to be something different," he says, as he orders another beer. "I want to be a Premier that gives it a go."

- With Nick McKenzie

This story The secret life of Matthew Guy first appeared on The Age.