Former Victorian premier Jeff Kennett intervenes to 'implore' Liberal Party pay failed ex Leader John Pesutto's $2.3 million debt

Sky News AU

02-06-2025

Former Victorian premier Jeff Kennett has issued a desperate plea for the Liberal Party to bail out failed opposition leader John Pesutto.
Mr Kennett wrote to the Victorian Liberal Party's Administrative Committee on Monday, imploring them to 'act decisively' by paying the entire $2.3 million debt Mr Pesutto owes Liberal MP Moira Deeming.
Lawyers for Ms Deeming lodged a creditors' petition on Monday, meaning Mr Pesutto has just 21 days to debt or agree a payment plan in order to avoid being declared bankrupt.
Parliamentary rules mean that if he is declared bankrupt, Mr Pesutto would lose his seat, forcing a by-election in the once-safe Liberal electorate.
In a two-page letter seen by SkyNews.com.au, Mr Kennett told senior party officials the issue had already been a 'massive distraction' for months, and if 'JP is not fully supported' it would put the party's chance of winning next year's state election 'seriously… at risk'.
"Remember money can always be replaced, a change of government cannot," he said.
Mr Pesutto was ordered to pay $2.3 million of Ms Deeming's legal costs after a Federal Court found the former Liberal leader had defamed the first term MP as someone who 'associates with Nazis'.
The origin of the dispute has caused division among Liberals about whether the party should bail out the former leader.
However, Mr Kennett defended Mr Pesutto, claiming he made the comments in his role as opposition leader and not for 'personal reward, benefit or gain', and that if he was premier or a government minister, his legal costs would be covered by the taxpayer.
'The point I am making is John Pesutto was acting as our agent. In short, the party should be meeting all his costs,' Mr Kennett wrote.
'Yes, the court decided some of his words were inappropriate, in fact defamatory. But that does not change the principle (or) the Party's need to back our own.'
Mr Pesutto has reportedly raised more than $700,000 to cover his debt, and last week the former opposition leader said he was 'hopeful' he would be able to come up with the money.
However, the threat of a by-election in Mr Pesutto's seat of Hawthorn – which could result in a Teal victory – has renewed calls for the party to resolve the issue.
One proposal reportedly on the table is for the Liberal Party's independent trust, the Cormack Foundation, to loan the former party leader the money.
Mr Kennett, though, said even this would be 'wrong'.
'Regardless of what you think of John personally, what he said, the judgment, the consequences are much greater than an individual. In principle and in practice,' he said.
'It is wrong to ask him to foot the bills, to bankrupt him and his family. Wrong to ask him to borrow money from the capital funds we might have at our disposal.
'I implore you to act decisively. We must put this issue to bed quickly.'
Mr Kennett even attempted to tie giving Mr Pesutto a bailout with the Liberal Party's core values, stating that since Menzies, the Liberal Party had been a party which supports the individual and the family.
'Not supporting the Pesutto family now denies the fundamental values the Party was founded upon,' he said.
Mr Kennett did not address the impact Ms Deeming's family experienced when she was defamed as a someone who 'associates with Nazis'.
Lawyers for Ms Deeming have flagged potential legal action against at least nine Liberal figures – including Mr Kennett - who helped fund Mr Pesutto's legal battle.
The former premier denied this had any role in his decision to appeal for the party to support Mr Pesutto.
'Do not think I am suggesting this course of action because of the threat from Ms Deeming's solicitors to sue me and others should this account not be settled,' he said in a post script to the letter.
'Such a threat has no basis for success at all and worries me not.'
In a social media post published on March 25, Ms Deeming said her lawyers were simply attempting to recoup costs so she could repay the loan she had taken in order to clear her name.
'My goal is not to bankrupt anyone, but rather to repay the $2.4m debt I incurred fighting to clear my name of heinous, false accusations that Mr Pesutto refused to retract or apologise for,' Ms Deeming said.
'My understanding is that Mr Pesutto's millionaire backers have more than enough means between them to pay the sum and that they fully intend to do so.'
Ms Deeming has also previously told the Herald Sun that if there is a by-election in Hawthorn, the fault should be placed at the feet of the Liberal Party's former leadership team.
'Ultimately, any brand damage and negative impact on the election chances of the Victorian Liberal Party from this saga were weighed, decided and set in motion on March 19, 2023, by Pesutto, and his former leadership team David Southwick, Georgie Crozier and Matt Bach," she said.
'Blaming any of the negative political consequences from that decision on myself or Brad is clearly done in bad faith as well as being patently absurd.'