Saying sorry to make them feel good – an update

Any doubts that apologising for the stolen generation, nearly forty years after the practice was considered unacceptable and stopped, is more about the political class’s self-image than indigenous people, must surely have been laid to rest by the row over Rudd’s vow to set a date for saying sorry.

Rudd’s decision to apologise on the first day of the new Parliament has drawn flak from both sides. His announcement that there would be no compensation immediately drew unfavourable comparisons to some of the Labor state governments where payouts have been made. Paul Lennon, in a fairly self-serving article in The Australian, revealingly entitled ‘Cash is a mere gesture’, describes how he made the ‘gesture’ in the middle of an election campaign in Tasmania, that fortunately for him turned out to be popular. The cash handed out to those forcibly taken away of just $58,000 would certainly qualify as a gesture, but then as Lennon says:

There can be no way of providing adequate compensation for pain, suffering and dislocation.

Well there can, actually. At least legally anyway, as there is a fairly elaborate system designed to calculate adequate financial compensation for such wrongs. Herron, in the submission made to the Senate for the previous government, calculated compensation would have been over ten times as much if liability had been established. However, despite their gestures, liability is something state governments have been keen to avoid. So has the new federal government, as Jenny Macklin reassured when announcing the government’s plans to apologise:

All of the state governments have issued formal apologies in their parliaments and there haven't been any legal ramifications as a result of those apologies.

The basis on which Labor governments have avoided liability is to argue that the laws were different then and they weren’t broken in taking children away. This is basically the legal equivalent of the argument used by those on the right who argued that attitudes were different then and it is wrong to condemn by reading history backwards.

While both accept in their own way that the past is the past, the difference is really about now. It was interesting watching Macklin on The 7.30 Report a couple of weeks ago defend the refusal to pay compensation. As she answered criticism by reaffirming the importance of the apology itself, she implied that finally breaking Howard’s embargo on saying sorry should be enough. However, she gave the distinct impression of making an argument that may have had resonance while Howard was around but now had lost its point and was not enough to offset the lack of money.

Having a go at Howard for not saying sorry was turning around what Howard had been doing to Labor before. Labor’s ‘gesture’ of reconciliation was part of a national identity project that it began to almost wholly rely on in the last years of power. Howard’s refusal to say sorry was part of his whole attack on Keating’s agenda that Howard claimed was detached from everyday Australian concerns. However, as the national identity project fell away, it was Howard who ended up sounding like he was playing politics with semantic word games, leaving us with Nelson’s feeble echo of Howard’s tactic yesterday:

You have to ask yourself … whether [the apology] is the most important issue that's facing Australia when we've seen a decline in the share market, home interest rates go up, petrol get more expensive and a basket full of groceries harder to fill.

Nelson’s tactic won’t work because Labor’s game is over and Rudd has no intention of reviving it. He is starting Parliament with an apology not because he wants it to define his government by it but because he wants to get it out of the way and bury it at the start.

Both sides now agree that practical measures are the way to help indigenous people. This sounds very noble until it is remembered that the most important practical measure both sides have agreed on in the last few months was the Northern Territory intervention, a ‘practical’ measure that is based on the same assumption as the one both sides agreed on fifty years ago, namely that indigenous parents are incapable of looking after their children. Maybe when the latest ‘practical’ measure is exposed for the beat-up child abuse panic it is, and they again decide to apologise for it, next time they will be a little more specific about who actually was responsible and not drag us all into it.

Crisis? Which crisis?

Last week, as international events began impinging on the economic debate here, the political game being played by the government leadership was in danger of unravelling. As the RBA has been saying and as it was sensibly reiterated by AMP Capital’s Chief Economist on The 7.30 Report the other night, the Australian economy does have inflationary pressures, but there are offsets from what is happening overseas, both the US slowdown and the secondary effect of the credit crunch pushing up bank rates here. In the longer term, as RBA Governor Stevens told Australian business in London, and Keating never stopped reminding us before the election, the reforms of the last Labor government (rolling back the unions) would provide an additional buffer (i.e. wages will take the strain).

The government leadership was ignoring these offsetting factors as the inflation ‘crisis’ was used as a political weapon against the former government and the spending plans of the ALP. But as the international situation started to hit the headlines with the volatile financial markets, the government’s tactics started to come under pressure.

It became a problem for the media as well. Even leaving aside whether inflation of 3.6% constitutes a 'crisis', it has been disappointing to see how the media continues to take the government’s inflation scare at face value and fails to see the politics behind it. It must be especially disappointing for Canberra residents, whose jobs are likely to be the collateral damage of this political tactic, to see how gullible their local Canberra Times journalists have been, one of whom recently added a theatrical touch to the leadership’s unusually well-publicised meeting with the RBA:

Mr Rudd and Mr Swan left Tuesday's meeting with Mr Stevens reportedly "ashen-faced" and declaring that interest rates were under direct threat and they would do all they could to restrain government spending.

The idea that Rudd and Swan are being forced to make these cuts against their will flies in the face of how Rudd has leapt on these inflation scares ever since the Labor election launch to use against Howard and his own party. If second hand accounts on the pallor of the leadership’s faces is the crude end of the media tagging the government’s line, Tim Colebatch in The Age gave us the more sophisticated version. On Monday, he took the government’s inflation scares at face value and then read through the RBA Governor’s Friday speech as though it was saying the same thing. He described Steven’s speech as ‘unambiguously hawkish’ on an interest rate rise and made absolutely no mention of the structural anti-inflation factors that were quite clearly set out in the speech.

The problem for this government line, and the media who were following it, came next day on Black Tuesday, when the slump in global equity markets, especially in the US, meant that not even the Australian media could stop factoring it in when talking about inflation and interest rates. Suddenly, the headlines changed and by Wednesday morning Colebatch was writing that the ‘unambiguously hawkish’ RBA might not push up rates after all. But within a few hours that changed again and with the latest inflation figures out later that morning (lower than expected on headline, higher than expected on underlying), an interest rate rise seemed back on the menu.

Colebatch was not the only one flipping all over the place on Wednesday, the Economics Editor of the Canberra Times argued that the RBA would sit on its hands and then regretted it a few hours later in his blog. Even The Australian, probably the most enthusiastic for the political agenda behind Rudd’s clampdown couldn’t seem to decide whether the inflation rise was serious or not. The Australian seems to have settled on accepting the inflation crisis and the inevitability of a rate rise, but then sticking in a caveat at the end that the RBA may do nothing about it after all.

If the media are starting to get confused, it doesn’t bode well for Swan's message. He is now in danger of being seen to veer between talking about crisis and then calming everyone’s nerves that the economy would be OK. It is not surprising the leadership's weakened opponents are feeling emboldened to have a go. The unions have hinted at pushing for wage claims to keep up with inflation, although Gillard reiterated that only if productivity went up first. After having made a weak start on this over the banks, even the Liberals are starting to sound coherent. Turnbull noted that Swan is sounding schizophrenic over the economy and his talking up inflation will only make things worse. So what a shame it is for the Liberals that it was they, in the middle of the last campaign, who started this whole pantomime.

No womb to go back to

Let’s be blunt. Nelson was not invited to yesterday’s meeting of Liberal state leaders because he was not wanted. But would he have wanted to go anyway? Probably not. The meeting was supposed to begin the recovery of the Liberals by rebuilding the party at the state level, where it first began over 60 years ago, but it is unlikely to have much success.

As Australia’s ruling party, Menzies’ Liberals naturally reflected the weakness of the Australian state. Authority was centred in either the states, or the Crown on the other side of the world, with not much left for Canberra in between. When Liberal leaders from Gorton onwards tried to shift authority to Canberra as part of the political class’s attempt to develop a modern national identity, it always created some antagonism in the party. The modernising project was mostly for Labor to carry out.

Ironically, it was under Howard, who opposed much of this national identity project, that the Liberal Party became most centralised in Canberra. However, it was less because of what Howard was doing rather than, as state government became depoliticised and Premiers little more than glorified hospital administrators, the role of the Liberals became redundant and one by one they dropped out of electability over the last decade.

The Melbourne meeting was proposed by SA’s Hamilton-Smith a few days after the November election. The state organisations clearly see a chance to reassert themselves over the party now that the federal Liberals have lost power. But this has only come about because what was happening in the states has now come to Canberra as the Mandarin begins sucking the politics out of federal government. The Liberals still have nothing to bring to state governments that are nowadays only about services, probably best summed up by the hapless Queensland leader who said “What we failed to do is understand what they want us to do".

All such meetings do is to expose the dysfunctional state organisations, and the non-entities who lead them, to the mockery of journalists. However, at least it shows that the state leaders are more realistic than some commentators who expect the normal political cycle to reassert itself in state government, starting in WA next year. In fact WA is the exception that proves the rule. A Labor government that is still in contention despite having blown out half of its Ministry to corruption clearly shows the old political cycle has gone for good.

Where do the Liberals go from here? At the moment it is hard to tell. Certainly the answer is unlikely to come from what went on in Melbourne yesterday. Probably the best chance is to take advantage of the most risky thing Rudd has started doing since coming to power, opening up the domestic political scene to an international agenda. Since no Australian government will have much influence over international developments, perhaps it can change to the Liberals’ advantage. In the meantime there seems little they can do to pass the time other than keep their spirits up by holding such meetings and over-throwing their leaders every now and then.

A whole new ball game

Wayne Swan must be a deeply worried man. After telling anyone who’ll listen there is an economic crisis (coming? here already?), the person with most control over economic policy doesn’t seem to agree. In a speech in London on Friday, the Governor of the RBA, Glenn Stevens, gave a much more sanguine view of Australia’s economic outlook. Stevens thinks we should be reasonably insulated from the US’s financial problems. Indeed the credit crunch’s forcing up of bank rates should be helpful against inflation, a trade-off that is largely being ignored in the media. Inflation is still reckoned to be “uncomfortably high in the near term” (i.e. above 3%), but he gave no sign that the outlook had deteriorated since December, as Swan is now suggesting. What Stevens does highlight, that this government knows perfectly well, is that the Keating/Hawke labour reforms will help absorb any inflationary shock.

Of course in reality Swan is not worried because he knows they are doing different jobs. Stevens’ job is to manage monetary policy and reassure the financial markets. Swan’s job is to give the Labor leadership the justification for a political clampdown on the party’s spending agenda. This was why Rudd and Swan took the unusual step of making a big public show of meeting the RBA’s deputy Governor while his boss was giving a much more realistic appraisal overseas. If it was a real economic crisis we wouldn’t be getting $31bn of tax cuts, which was a campaign promise made a couple of weeks before Howard desperately tried scaring the electorate over the economy. There is now a danger that Rudd’s internal need to perpetuate this fake crisis will begin to look like panic. However, given it was Howard that started this whole economic crisis pantomime to attack Labor, it will be difficult for the Liberals to have a go at Rudd as he uses economic scares for exactly the same purpose.

But scoring points over the economy will be the least of the Liberals’ problems. Nelson has been asking why it will be so long before Parliament finally resumes. It is because Rudd is in the process of changing the rules of Australian politics and that involves first sorting out his own side before dealing with them.

The new game is anti-politics. It is why Rudd dragged the Ministry in front of the public in Perth on the weekend. The political message is similar to that when he sent the parliamentary party out to homeless shelters and schools soon after coming into office. Politicians are inherently out of touch. When Rudd said in Perth, "Governments that remain in touch with the people, deliver the best services to the people", it sums up the credo: 1) government is more about providing services than fulfilling some party’s agenda and 2) all of the functions of the bureaucracy and party do not enable politicians to keep in touch, requiring them to hold public meetings to find out what is going on.

Saying government is about providing services is what state government has now become and it is not surprising they already do these cabinet roadshows (e.g. in Victoria). Saying that the government is not necessarily in touch even as it is just taking power is really suggesting politics and the apparatus of the state as they exist are dysfunctional.

This second point is a big concession and it is interesting to wonder how much senior members in the party are on board with this idea, given an intriguing incident during the Perth visit. Jason Koutsoukis’s ambitions to be the Dennis Shanahan of the new government took a bit of a blow over the weekend. It seems his careful cultivating of Labor contacts over the last year let him astray on rumours that Beazley was to be appointed the next G-G. By Sunday morning, the Fairfax sites were getting pretty definite on the appointment with the SMH’s running the headline “Beazley Set for the Job”. This suggests that the push for the appointment was coming from fairly high up in Labor with Faulkner being one of those mentioned.

In the past, the idea of Beazley getting the job would have been feasible, he’s harmless enough. Not under the new regime, however. By Sunday lunchtime Rudd was making clear that whoever it would be, it will not be a politician, either past or present. The days when the political class could think themselves worthy enough to be the figurehead of Australia look to be over.

The coming political recession

Why on earth is everyone so keen to talk down the economy? The RBA expects the inflation dragon to pop its head a bit above 3% for a few months this year before sinking back into the 2-3% range in the second half. Expectations of easing inflation are based partly on a result of last year’s rate hikes as well as an anticipated US slowdown taking some of the steam out of the Australian economy. Australian GDP growth is expected to slow from 3.5% in 2008/9, but still to a very respectable 3% in 2009/10.

The RBA’s scenario seems reasonable enough. It is certainly easier to follow than some articles that have recently appeared in the press that forecast a global recession (including China?) and higher inflation, so that Australia apparently not only has to worry about inflation from an economy growing too fast but, er, the consequences of a slowdown as well. This looks less like the stagflation of the 1970s but the chuck-everything-bad-in-the-pot of 2008.

When Howard and Costello suddenly changed the theme of their campaign at the beginning of November from ‘Go for Growth’ to dire warnings about a Tsunami, it was seen less as an economic assessment than a transparent political ploy by a struggling government. After Howard’s first tried it on during an Insiders interview on 4 November, Milne commented that the about-face was an audacious move but worth a try. When Rudd picked up the theme himself at the Labor party launch a few weeks later, it was again seen as political, in this case Rudd making Howard’s spending promises look irresponsible. As Howard complained at the time, Rudd’s launch tactic wasn't an economic move as his total campaign spending promises weren't much different from the coalition's, he was just playing politics.

It also did not escape commentators’ notice at the time of the launch that Rudd’s use of Howard’s scare-mongering was also directed at the party he was addressing. His call that “this reckless spending must stop” was targeted at the party’s spending traditions, personified in the audience by the presence of EG Whitlam.

Since then, while there may have been more bad news from the US, the politics is still very much there. Now with Howard out of the way, the party is the main target as the leadership uses the economic scare to restrict any alternative agendas in the party. It is also useful to lower expectations among the public itself. It might be why, for example, the new Treasurer keeps talking about this ‘cancer’ of inflation, as he calls it, being above the RBA’s 2-3% band over a year longer than the RBA itself does. However, as this is still political, the $31bn of tax cuts promised during the campaign naturally remain untouched, despite the dire warnings.

The Labor leadership’s political interest in hyping up economic fears is fairly clear. But why have such tactics become so widely accepted since the election? Although inflation scares are being used against the party, it has already lost its ability to impose itself. A few weeks before the Labor launch there was a fairly pathetic display of the party trying to assert itself over the leadership in a jostle for front bench positions, which led to a slap-down from Rudd as he claimed even greater control over choosing the Ministry. Rudd’s leadership win was the result of a party that realised it could not go back to the past (Beazley) but had no real idea on the way forward. The result was a blank cheque for the leadership. Latham used it to make it up as he went along, Rudd used it to take over power from the party.

Outside the party, the acceptance of such scare-mongering seems to be part of the strange reaction since the election to Rudd's coup. With the object of focus for the Howard-haters now gone, it has all gone quiet. Even allowing for the holidays, there is much less talk about the advent of this Labor government than would be expected for such a rare political event. As the ALP and its programme are pushed from power, reaction seems to oscillate between a bit of wistful Obama-dreaming of what might have been and a resigned throw up of hands that says, given such economic catastrophe on the horizon, such plans were never going to be possible anyway.

Straws in the wind

While the consolidation of power by the Labor leadership over the party and the unions is fairly clear, even if barely alluded to in the media, the political agenda it will use to do so is just developing. At this stage there are some signs of what will be important and what will not.

What may have been central to government policy in the past may no longer be the case. Let’s all hope that the politically astute former Treasurer turns out be of some use when he shuffles off to the corporate world, because he is certainly not much use in the political one. Even after the coalition’s loss in an economic boom, he still doesn’t get that the economic debate has changed and been down-graded. His criticisms of Swan telling off the banks for hiking borrowing rates miss what the new Treasurer was doing. This is not about Swan stopping the banks from raising rates, everyone knows that he can’t. Costello’s claim that he did when he was Treasurer is just bluster. Treasurers lost control over what the banks did when monetary policy was handed to an independent Reserve Bank. The myth of the government’s control over the economy was exposed in last year’s campaign as Howard’s 2004 interest rate promise rebounded and the economic impotence of government is now much clearer. What Swan was doing was showing empathy and acting like a glorified consumer advocate. The only real response he has to higher rates is to promise to further constrain spending on Labor's programme to satisfy the RBA.

If government is no longer able to control interest rates, there are perhaps other areas it can have an impact. There may be some who think that Cabinet Ministers should be worried about more important things than plastic bags. But they would be missing how, now that environment has become a leading global political agenda, even the most mundane and trivial matters of domestic life can become something of national importance. This ties in with an agenda flagged by Garrett before the election in You Tube ads that gave lessons on the right way to shop for groceries, fill the car with petrol and suck eggs. Unlike monetary policy, plastic bags are fairly easy to control and banning them by the year-end should be possible. But adjusting people’s domestic habits may be harder.

Even emotions are now a target for the new government. To her portfolio of industrial relations and the Education Revolution, Gillard has now also added tackling loneliness. Apparently. Social problems in the outer suburbs are part of her social exclusion brief. This is the third part of her portfolio that has received the least comment in the press, but may have the most far-reaching consequences.

This will be the first Labor government in history where unions will not play a significant role in its mandate. In a nutshell, Gillard’s job is to fill that gap. The under-funded Education Revolution is an important part of that, but her social exclusion portfolio is also about repositioning Labor’s connection with society. It is also a concern for business as well. Gillard states pretty clearly the new role social exclusion will have in replacing the dead IR issue:

I spent a lot of 2007 in corporate boardrooms where I would be talking about our industrial relations policies and plans, but there people wanted to talk to me about our social inclusion agenda … they want to work with disadvantaged communities.

As part of this agenda, Gillard has indicated that she will lift Howard’s gag on charities commenting on public policy. This gag said less about Howard than the increasing voice that charities have had in public policy over the last decade. While they conflicted with Howard’s program, they are likely to be an increasing important part of Labor’s.

This sounds all very well but it should be remembered what a change this is for the ALP. In the past there would be a bit of double-edged relation between left-leaning parties focussed on social programs and charities that would more see issues on an individual basis. This focus on individual behaviour now seems to be an underlying theme of Labor now as well. This is an implicit conclusion from Gillard’s comments that these people cannot blame the economy:

The analysis would lead you to believe that if economic growth alone was going to fix the problems of those communities, it would be fixing them by now. The truth is economic growth alone is not fixing the problems of those communities and they're getting left behind.

None of these political trends are especially unique to Australia. A focus on individual behaviour through issues like social exclusion and environmental activism has already appeared in government policy in the US and the UK. In Australian politics this manner of looking at social problems as being behavioural problems is, of course, well established in indigenous affairs, which is clearly a social problem but now keeps coming back to the behaviour of indigenous people, no matter how inappropriate. This was the basis for the NT intervention and the report that kicked it off, both of which had broad cross-party support. It will be interesting to see how far this is now extended beyond the indigenous communities.

Rudd’s states takeover

Mike Steketee’s article on Rudd’s new federalism is thorough, but shows the same touching faith over Rudd’s intentions with which the media have generally greeted his agenda so far. Like Rudd’s other actions since 24 November, his new federalism is part of the consolidation of power that was accelerated, but not completed, by the election. This consolidation is about a narrow cabal around the leadership pushing out competing claims within the party, including the unions and other power bases in the ALP. Rudd’s new federalism has a similar purpose, but is also driven by the needs of the states themselves.

Over the last twenty years, state government in Australia has become increasingly depoliticised. State politics has moved from being about ideological issues like anti-socialism and race to little more than the provision of state services. It is striking to look at states like Queensland that has moved from being run by that ‘Bible-bashing bastard’ Joh to a technocrat like Anna Bligh or the declining role that race plays (explicit or otherwise) in the Northern Territory.

This depoliticising of the states has generally benefitted the ALP, with its closer public service ties, but not smoothly. Over that time the Labor parties have generally gone through convulsions (State Banks collapses, WA Inc.) from the pro-union/business parties to technocrat organisations that are mainly seen as public administrators. This transformation of state politics to something much more boring is probably one reason why Labor State Premiers don’t seem to hang on like grim death to their offices like they used to and have such a propensity to ‘retire gracefully’ that seems to win so much applause in these anti-political times.

One arguable exception to this on the mainland is NSW, which has yet to break its union links like its neighbouring state governments. Its state government will be the one to watch in 2008 as it looks to catch up by picking a fight with the unions over privatisation plans.

Although the Labor party has adapted to this change, there are some problems. There used to be a lot of advantages in having a political agenda. Joh’s anti-socialism meant he didn’t have to bother with providing services even for his own constituency in Queensland’s rural region as long as they knew he would be tough on the commies in the unions. These days there is much more pressure on states to deliver, since that is all that they are seen to do. Howard played on this with his ‘failed states’ strategy. Running around and getting involved in state issues may not have done much for Howard’s authority on the national stage, but it did succeed in embarrassing the states.

This vulnerability is behind the states' eagerness to fall in with Rudd’s agenda and he has taken advantage of it to take control of the state government agendas and by implication, the state ALP branches. This takeover is why federal Ministers, rather than the usual bureaucrats, are heading the move to centralise powers and using issues like education, hospitals to justify such a centralisation.

Although this is taking the form of Canberra taking over control of the states, what is really happening is that the depoliticisation of state government is now happening to the federal one as well. This is what Rudd means by ‘ending the blame game’ and saying that the buck will stop with him.

However, although there may be advantages in national coordination, there is no reason why the Canberra government should be any better at running a hospital than the one in Adelaide. Sooner or later Rudd could face the type of problems facing the state premiers. The Liberals picked up the potential problem with this move even before the election when Abbott kept on raising the difficulty of Canberra running 700 hospitals. Although Labor pointed out that that scenario was a long way down the line, that is the way things are now heading.

What Canberra does have that the states don’t is the international agenda. It is another reason why we will be hearing more about climate change not only nationally but as a way of Canberra asserting its authority over the states through issues like Murray River management and water restrictions. The more the Mandarin increases his control over the party, the more its agenda is likely to drift off overseas.

Obama dreaming

Let’s start with a confession. This blogger is not inspired by Obama’s candidacy. There, it’s been said. It’s not that it’s not nice to have a black person trying for the top job in the US, although it has been done before (e.g. Jesse Jackson). It’s just that whenever Obama speaks, he comes across to this blogger as preachy and, it must be said, a little boring.

Exactly what it was about Obama that made it difficult to maintain concentration was hard to pin down until the speech after the Iowa caucuses that has produced such ecstasy in the media, even from crusty right-wingers. Barely anywhere in it is there a sense of taking on the Republicans. This is his strength but also his problem.

Despite the enthusiasm of these primaries, politically the Democrats are in a demoralised state. Their recovery of control of the Congress and Senate in 2006 has only exposed their fear in taking on what must surely be the weakest and most unpopular Republican Administration since Nixon during the final days of Watergate.

This timidity and lack of political will is summed up by Hillary Clinton’s candidacy, who while maintaining the watered-down Third Way of her husband, talks up the power of the Republican machine like he never did. Yet anybody watching the Republican New Hampshire debate would only see a shambles rather than anything that looked like it could turn into a powerful political force in November. Despite the unpopularity of the President, the Republican candidates are struggling to break away and when they do, they sound like Ron Paul, whose claim that US foreign policy was to blame for 9/11 made his fellow candidates cringe.

Commentators have complained that Obama is style but little substance, but here the style is the thing. On substance he differs little from Clinton or any mainstream Democrat (indeed in the New Hampshire debate Obama gave the most hawkish response to a hypothetical nuclear threat in Pakistan, which as the moderator rightly noted, followed Bush's pre-emptive strike doctrine and must raise questions over the value of Obama’s opposition to the last one in Iraq). His backers are not that different from Clinton’s (unless his forty-year old Wall Street bankers are more progressive than her fifty-year old ones), which presumably helped him buy 40% more ad slots in Iowa than Clinton in the run up to Christmas.

However, whereas Clinton claims to be the only one capable of taking on the supposedly mighty Republican machine, Obama’s appeal rests in denying it is even necessary. Obama promises to cross the political divide, a commitment made personal by promising to cross the racial one as well. For a nervous and demoralised Democrat party, avoiding a direct fight with the Republicans has some appeal, especially to the most demoralised part of it, those who bother to vote in Democrat primaries but call themselves Independents. It also has some appeal to those observers in the media and elsewhere who find the Democrat-Republican tussle increasingly pointless.

It will be interesting to see how long the Democrats wish to avoid the thought of taking on the Republicans. Clinton’s problem is that they seem in no hurry to do so. As far as some Democrats see it, she represents a return to the toxic politics of the last fifteen years, by which they mean Republican attacks on them. However, surely they will have to face it eventually. Even Edwards, who spent most of the NH debate sucking up to Obama (presumably because he thought it would be easier to take him on in the end than Clinton) had to remind Obama that ‘you cannot nice these people to death’.

This blog had made a vow to restrict itself to Australian politics and not follow the shift in attention to the US primaries by other Australian political blogs. But that is exactly the point. Given all the interest in the tiny Iowa caucuses and a US candidate who is unexciting except for his skin colour, it is hard to believe that two months ago something happened that only has occurred twice before in the last half century of Australian political history, the advent of a Labor government.

However, there is already a sense that this Labor government is not like others. For some, Obama appears to be filling a gap that Rudd has not filled (sentiment best summed up in posts by the Economics Editor of the Canberra Times). The mood has especially turned sour in some parts of the blogosphere over Labor’s introduction of internet filtering laws over Christmas (censorship is of course a bad thing, it just seems easier to complain about it than writing something worth censoring). It is surprising that there is such a fuss now given that there was barely a murmur of criticism over this policy’s inclusion in Labor’s election platform. Maybe this was missed because like the way Obama is being scrutinised, hope does not mean clarity.

The year the ALP loses power

The almost Whitlamesque speed with which Rudd put in place his new agenda has won applause from his new friends in the press. For them, it shows just how eager Rudd is to give the voters what they voted for.

This shows a remarkably one-sided view of politics as though the major parties just have to worry about getting votes. Internal party considerations were why we had an industrial relations debate in 2007 that bore little relevance to what was happening on the ground and with the election out of the way, they are certainly a factor now.

The November election did not fully complete the transfer of power. There is still unfinished business and that is what is driving the pace of Rudd’s program. The ALP is a party in transition and in effect there were three groups with claims on the 24 November result; the Rudd team, the unions and the traditional power bases in the ALP. Having mobilised all sections of the party to attain power, Rudd’s agenda is now to remove those competing claims.

The easiest to deal with are the unions. The $30m of members’ dues spent by the unions on an anti-Workchoices campaign may have partly been directed at voters, but it was also intended to increase the unions’ bargaining position with the incoming government by claiming that it owed its victory to repealing anti-union legislation.

If this is the case, Rudd doesn’t seem to be listening. The IR announcements made by Rudd and Gillard once in power have been more notable for what it retains than replaces. Much more of Howard’s Workchoices structure will remain in place for almost all of the government’s term than was indicated from Labor’s election platform. Howard’s Workplace Authority and unfair dismissal laws continue until 2010 and calls by the unions to go back to the AIRC have fallen on deaf ears. The new government has not even conceded on symbolic acts like replacing the public spokesperson for Workchoices, Barbara Bennett. Threats by the unions to organise strike action to speed up the dismantling of Howard’s Workchoices regime have been met with a reminder from Gillard that such political industrial action is now illegal and that the law will be enforced. With this going on, the ‘Education Revolution’ is a useful way of keeping the party on-side, and it is why Gillard holds both portfolios.

However, the party itself is also being side-lined starting with the traditional power bases. The Right faction power-brokers have just been handed their worst front bench result in living memory. Not only that, but those from the Left like Gillard, Tanner, Faulkner and Wong occupy key positions that arguably over-shadow the traditional plum roles of Treasury and Foreign Affairs held by the Right. But even though the Left faction brokers can claim nine out of 20 ministry positions on paper, they haven’t a lot to be happy about either. These ‘new Left’ ministers are playing very different roles from left ministers in the past. If anything they are almost opposing the traditional pro-union and government spending left program. While Gillard introduces Labor’s most anti-union legislation ever, Tanner in Finance and Faulkner are leading the clamp-down on spending across the Ministry and cuts, which had been targeted at $10bn before the election, but are now apparently to be doubled.

The political consequences of Tanner's circular are obvious. By refusing any spending above those promised in the election, it prevents any section of the party pushing an agenda not in control of the leadership. The constraints on the party’s agenda is most symbolised by Tanner’s extraordinary decision to get a Senator from another party, the Democrats, to review the public accounts.

The short-term political justification for this clamp-down is concern over the economic outlook. It is fascinating to watch how the reaction to these dire economic forecasts has transformed since Costello’s hysterical ‘tsunami’ warnings during the campaign. At first they were, quite rightly, cynically regarded as a desperate attempt by a dying government to scare voters about Labor spending plans. Now, just two months later, they are treated as gospel as Rudd himself turns it against the spending plans of the party. Bear in mind that we are talking about is inflation rising to 3.25% in the first half of the year and then falling back down to 3% in the second half to be back within the target 2-3% range by next year. While everyone likes talking about the rise in inflation in the next few months, the subsequent expected decline is given much less air-time. The RBA also does not think a US recession is likely, and that anyway, Australia should be well insulated with its reliance on the resilient Asian economies - a relaxed scenario you would not guess from some of the analysis that has come out since the election.

By the time inflation starts falling next year, short term fears over the economy will be replaced by much longer term fears over global warming as the international agenda that Rudd locked Australia into within days of coming to power, comes home. Garnaut’s report on the economic impact of emission targets is due in mid-year. The exact impact it will have on domestic politics is not yet clear. But the way it was being talked about as a war-time emergency in Bali suggests that as it takes root, it will leave little left that would have been recognised as a traditional ALP agenda.