Lurch-ish

Any discussion on climate change that had Malcolm Turnbull and Wilson Tuckey both thinking they got what they wanted, clearly resolved nothing. The media says that Turnbull got things his way. If that’s so, he would have been surprised to have heard his leader on The 7.30 Report last night refusing to commit to a 2012 start date.

In fact it was Turnbull who got rolled this week. He was indulged at the shadow cabinet meeting on Tuesday then again at the party meeting on Wednesday, although Nelson must have posed it in a way that kept even the sceptics satisfied. Greg Hunt has been given some three-point thing to go away and play with on Lateline, while Nelson, after a bit of prodding, gave the most sceptic of the many positions he has adopted over the last month.

Turnbull looks to be finished. The party has moved to a sceptic position but it was done over his head so his chance to challenge it has passed him by.

By the way, someone in the Prime Minister’s department should reprogramme the Minister for Climate Change. It is not a good look to cut away from the Liberals’ carrying-ons and see her smug visage talking about the Liberals’ political games. It makes it look as though the government is playing some of their own. Moral indignation is the order of the day.

Vacillating to survive

As Nelson makes another excellent impersonation of the cushion the last bum sat in, it is hard to follow what is going on if the line of some of the media is believed that the manoeuvres of the last four weeks were instigated by him.

There is no real reason to suppose that Nelson believes any more in the idea that Australia should wait for the rest of the world to introduce an ETS than yesterday’s position that they shouldn’t, or three weeks ago when he also thought they shouldn’t or the intervening period between when he thought they should.

Nelson is only focussed on one thing, to survive, and to do that he needs to manage both sides of the debate and prevent either side taking over. It is quite easy to believe reports that Nelson didn’t especially push his new sceptic line that hard with the shadow cabinet yesterday. The shadow cabinet would have put up some fairly convincing arguments yesterday, not least that the sceptic line is hugely unpopular with even their own supporters.

But they are not the ones Nelson has to please with a sceptic line. They will be lurking among the backbench today and are not going to let it rest, just as they didn’t the last time Nelson reached a compromise with his front bench. From the luxury of the sidelines, the old leadership can argue what they themselves could not resolve when they were running the party and government; how to reconcile a policy position that is electorally unpopular and increasingly out of touch with the global political agenda but that at least defines what the party stands for. Howard managed it by formally standing for an ETS but campaigning like a sceptic (Paul Kelly doesn’t seem to think he did, has he forgotten Howard’s reaction to Garrett’s campaign ‘gaffe’?). Given the crisis in the party that has now come to the surface since then such a balancing act is no longer sustainable. The threat of heavy electoral damage is persuasive, but probably not decisive.

The lurch

Liberals head to Canberra for the party meetings this week with the salutary lesson from what has just happened in Queensland. The media likes to call it a merger but in fact it was a political collapse. A dysfunctional branch, no longer able to survive on its own, has had to find shelter elsewhere. The Liberals tried to make it a merger by insisting on the presidency or leadership post of the new entity but the Nationals were having none of it. This resulted in the farcical 11th hour scramble by the Liberal State Council to pull back and call the whole thing off to try and hold onto its organisation. But with the bulk of MPs and members already on their way over, it was too late. While Brough went off in a huff, Liberal President Alan Stockdale was running around trying to put a brave face on something that he was opposing only the day before.

The only sign of a merger is that the Liberals got their name at the front of the new organisation. Queensland Nationals leader Lawrence Springborg may like to say the LNP is a new conservative force, but they’re basically just the same old Queensland Nats. From that it is hard to see how they are now better placed to take on Bligh’s government. The creation of the LNP has come at the expense of that wing of the coalition that was more acceptable in Brisbane, the Liberals, so it would seem to leave Labor in a better position than before. The whole thing was really the Nationals doing what they have been trying for decades to do in Queensland, take over the Liberals.

They succeeded this time because the Liberals are in a political crisis. While the presence of a larger conservative organisation made the Queensland situation unusual, the Liberals’ loss of control of its branch in the country’s third largest and fastest growing state will be felt right across the national party. Basically the Queensland Liberals lost the justification to be an independent political force. It is to deal with this fundamental crisis of identity in the national party that will be the purpose of senior Liberals when they come together in Canberra this week.

Climate change is the issue used to do it. There are particular reasons why the Liberals are using this issue to rally the party, but they all amount to the same thing; the climate change agenda sums up the new political order that the old leadership of the Liberals cannot see their place in. So they are trying to deny it is happening and hope that sooner or later, some hip-pocket backlash will occur and it will all seem like a bad dream.

If climate change is the issue to reassert control, destroying Turnbull’s political career will be the means to bring it about. Turnbull sums up the identity crisis of the Liberals as he has been one of the most adaptable to where the party’s core support base is moving, which underpinned his success in Wentworth at the last election. It is easier for the old leadership to focus against Turnbull than saying what it stands for, especially after it was discredited by the November loss.

If Nelson has done what he is reported to have done, neutralising Turnbull as a political force, then he has performed his biggest service to the old leadership. After a three-minute challenge, Turnbull looks as though he is now toeing the old leadership line. He clearly does not have the numbers, but he should have positioned himself now for a more propitious time, even at the expense of a front bench job. Even if this week is presented as a compromise, it is not an issue where one is possible. Turnbull will have become a sceptic.

Turnbull has apparently justified any compromise to The Australian's Glenn Milne as a means of waiting until business puts pressure on Nelson to revert to a position that provides more certainty. The trouble with this strategy is that it presumes that this is wholly about climate change. It is about the identity of the party, and even if they water down the sceptic line, Turnbull is still in the way. Turnbull is missing the internal dynamic of what is happening in the Liberals.

He is probably reading too many newspapers. Readers of this blog cannot say they are being surprised by the current shift in the leadership, not only when it first broke to the surface a month ago but from even before Nelson was elected. Yet the media seem curiously blind to the internal dynamics of a party that some of them spend so much time hanging around. There is a one dimension view of the Liberals as though all they are about is getting votes. They are certainly going to struggle with what is happening now because the old leadership is leading the party up a political cul-de-sac.

There is nothing electorally positive for the Liberals where the old leadership is getting ready to take it. It is not just that they are going to be re-losing the 2007 election all over again. Since November, the Rudd government has deliberately exposed the debate to what has been going on overseas and changed the assumptions behind it. As shown by even the Liberals' difficulties over whether to wait for China and India, Rudd has taken Howard’s old orthodoxy outside the political mainstream. The Liberals' lurch has also clearly revitalised the Rudd government, which has started to resume the campaigning that it never should have stopped. This may not be very Prime Ministerial but the days when a PM assumed power on a firm basis to govern are gone. As Howard discovered in his first and last term, to just govern is to invite malaise.

Rudd’s line does still need sharpening. He should talk more about the Liberals’ scepticism being for short term political gain than a product of their internal problems. For a start, those internal problems may not always be around. Once Turnbull is diminished as a threat to the leadership the old guard has less need for Nelson. As soon as Nelson finishes digging Turnbull’s political grave, he can probably start on his own.

Talking about the Liberals' leadership problems also distracts from their greatest vulnerability, which is being called their ‘populism’. That this highly unpopular position is seen as ‘populism’ is made possible because is still seen as such by the media. Journos like Glenn Milne see it like that because their political analysis is stuck in the same past as where the old leadership wants to take the Liberals. For what other reason could he give credence to what someone said to Nelson at a Sydney shopping centre over all the polls taken on this issue? For Rudd, the Liberals' lurch has not only given his government a high moral purpose but also the weapon that we know he can use most effectively, but is rarely given to a government to use against an opposition, anti-politics. After all what can be worse than trying to make political gain at the expense of the planet’s future?

Liberals get ready to lurch – an update

As senior Liberals jostle for position ahead of next Wednesday’s coalition meeting, it is important to remember what this row on climate change is about. It is certainly not about the Liberal party positioning itself to capture disenchantment from the government’s agenda. When Kevin Andrews says that the party needs to reflect public concern about the economic impact of climate change action, unless the Liberals are intending to become the political wing of the Latrobe power workers and the AWU (there is a vacancy), there is no polling evidence to show that such concern exists.

The only thing the sceptics can point to was polling done weeks ago in the early stages of the petrol hoo-hah, before the climate change agenda took off, that showed people didn’t want to pay more for petrol. When the question was linked to climate change then polling turned around into support. The earlier polling doesn’t mean that support for climate change action is soft, it just means that people don’t think OPEC is a worthy cause to give money to. In terms of electoral gains, the sceptic position makes no sense, in fact it is highly damaging.

Nor is this really about climate change. The Liberals are right, Rudd’s climate change program is really Howard’s with a few months knocked off. When Howard adopted the Shergold Report last year it didn’t cause major ructions in the Cabinet (except perhaps from some who wanted to go further), because despite adopting it, Howard not only kept himself on the sceptic side of Labor but also carried on with a myriad of other symbols (like Workchoices) to remind the Liberals what they were about.

Now those symbols have gone, one by one, as Rudd exposed them for the meaningless political symbols they had become. Having had to stand by while Nelson made a tactical retreat, the old leadership are concerned that it has gone too far and that the wastelands of their state parties await. Climate change is the touch paper of such a debate about Liberal values because 1) it ties in with a shifting but still equivocal US position with which the Liberals must be closely aligned 2) it allows them to temporarily regain some relevance at least with those businesses lobbying the government over compensation and 3) there would seem to be on the surface some electoral sense, as it reinforces a line that the Liberals still cannot believe has lost its meaning, their economic credentials.

There are potential political problems with Rudd’s climate change agenda but it is on the opposite side of the fence to where the Liberals are. It more lies in anti-politics cynicism that the government will be all talk and no action. Something that is already pervasive in the growing frustrations about the most tangible part of this political agenda, the rescue of the River Murray.

Denial – an update

Is someone setting the Liberals up? It otherwise seems very careless of Rudd to agree to launch a book that has let out one of Labor’s most closely guarded and politically damaging secrets – that they dread the possibility of Costello as leader of the Liberal party.

Costello can be a highly amusing parliamentary performer. Specific instances do not come to mind, but certainly he managed to achieve what is normally very difficult to do in the partisan environment of the Australian Parliament, to get those on the opposite benches to laugh at him as well.

Some might think that this meant he was regarded as a bit harmless, or a “low altitude flyer”. We do know that he was used ruthlessly by Howard as a way of managing discontent over his leadership by promoting Costello as his obvious successor – no one better to have next in line for power than someone incapable of taking it.

Costello’s name has been surfacing again as a feasible leader in the last few days for two reasons. The first is because the old leadership is itching for a resolution to a problem they see as one of ‘brand’, but more a need to justify the party’s existence. The problem is to stop the rot by replacing Nelson, but without letting it get even worse under Turnbull. The last few weeks have seen urgent background moves by the old leadership to reassert control and while not ideal, Costello at least offers a way of removing Nelson with someone popular enough to block Turnbull. Also with Turnbull’s star appearing now to be on the wane in at least the medium term, it now seems safe to speculate on the leadership.

However, the resuscitation of Costello is also triggered by a reassessment of the political situation that has coincided with the attempt of the old leadership to regain control of the Liberals. There is a growing feeling in some circles that Rudd is heading a one term government.

The story appears to go like this. The Howard government was trucking along just fine but the Old Man was getting, well, old, and so a new fresh face was needed. Labor moved first and so won. Since then Rudd has really only tried to do the same as Howard and appear economically conservative, but with a few more symbols. Unfortunately now that they are getting carried away with climate change, they will damage their economic credentials leaving it open for the World’s Funniest Treasurer to make a comeback.

The rats seem quite comfortable with this. Certainly Dennis appears to find this more credible than Rudd’s Stalinist re-writing of history at the book launch when he said that apparently Howard lost because he didn’t have an agenda. Gerard Henderson, as ever, provides a more sophisticated version and says that in reality Rudd’s agenda is not much different from Howard and that Costello would have just picked up the bits that Howard left off like the apology.

It is certainly true that on issues like Iraq and Workchoices, for example, there was a lot less difference in the positions between the two than many liked to claim. Even on the apology, Howard was coming around to a rethink and anyway they both agreed on the intervention. On climate change, the Liberals are right, and as Penny Wong admitted, the difference between Labor’s Green Paper and what the Howard cabinet agreed to a year ago is just a matter of detail. It is why the Liberals are now starting to claim that the public can see Labor is all spin and have no new ideas.

However, there is something wrong with this. If Labor didn’t really have any alternative to the Liberals before the last election, why didn’t the Liberals just say so? Why did Howard talk up Australia’s commitment to Iraq and the dangers of Labor's plan to pull them out to the point where he not only claimed the current US Presidential front-runner was a friend of terrorism for suggesting the same but Australia’s current A-G soft on terrorism as well? Why did the Liberals campaign endlessly about the union threat and how Labor’s front benchers were mostly ex-union officials? Why did Howard ministers make such a song and dance about Garrett wanting to go ahead with capping carbon emissions without waiting for China and India, a ‘gaffe’ that has become so much the orthodoxy in the Liberal party that its current leader gets in trouble straying from it? The Liberals tried accusing Rudd of 'Me-Tooism' but then continually veered off to making his team a threat to the nation.

The reason why, of course, is that Howard spent 2007 desperately trying to make a program out of thin air. Rudd wasn’t adopting Howard’s positions to be another Howard, but because he could, as by 2007, they politically meant very little. Howard had spent nearly five years pretending that Australia’s miniscule deployment in Iraq amounted to a ‘commitment’, something he got away with until put in his place by Obama last year. He managed to pose his irrelevant IR program as the biggest attack on the union movement since Bruce tried to dismantle the Commonwealth Arbitration Court. He even tried to make his mean spirited pettiness over the treatment of indigenous people thirty years ago an act of political significance. In all of this he was helped not only by pseudo cultural warriors from the right like Gerard Henderson, but also by a left, who in attempting to manage their irrelevant agenda, made a big deal out of opposing Howard’s.

Howard had no programme not because he was old but because he was in the middle of a political crisis. It was a crisis so profound that when the leadership imploded two months before the electorate intervened, there was no-one to step in, least of all the political maestro from Higgins. Rudd at least had an agenda for managing that political crisis which is why he won in November. However, he can’t fully resolve it and that is what makes the government look vulnerable to some in the Opposition. But in order for it to appear so they have to avoid looking at the state of their own party in every capital of the nation.

Climate change and the political crisis

The government recovered its poise somewhat after the initial mist-step at the Green Paper’s launch, a little more talking up the pain than trying to feel it. Janet Albrechtsen stuck her knife straight into the central weakness of the petrol price concession, that it undermined the moral urgency on which the government’s case rests. Andrew Bolt made a similar point on Insiders when he cruelly dubbed the government’s agenda “Carbon watch”.

Bolt is pointing to the central paradox in the government’s case, that on one hand it can freely admit it can do little about rising oil prices, but on the other it is claiming to have a plan to change the weather. This only makes sense as a moral position and it is why the New Sensitivity may be a short-term tactic to deal with anti-politics sentiment, but makes it harder for the government in the long run. The government needs a moral imperative, otherwise its authority will erode. Certainly business has smelt weakness and as the Qantas CEO takes off his tie and pleads hard luck in front of the cameras, the government is going to need to toughen up its line if it is going to handle the ‘argy-bargy’ with the business lobbyists.

Yet while right-wing columnists and business may be able to take advantage of the flaws in the government’s agenda, their political representatives in Canberra cannot. The Liberals’ hands remained tied by internal rather than electoral considerations. Despite the clear polling evidence that suggest the electorate is more likely to be resenting the government for not doing enough, internal needs are forcing the Liberals on the sceptic path to claim that the government is doing too much.

Labor’s dealing with the electorate so far on climate change may be so-so but their handling of the opposition has been astute (although it is admittedly an easy target). The decision to bypass the Greens in the Senate and look for bipartisanship with the coalition is a political masterstroke. Commentators have suggested that Labor is doing this because the Greens will be hard work. On the contrary, now that the government is making climate change central to their platform, it will expose the Greens’ lack of political independence from the ALP and they can safely be ignored.

Rather, the main way the government can manage the contradictions of its agenda, for at least a while, is by wrecking the Liberals. Focussing on getting agreement with the Liberals on climate change will force out the conflict in the party between the internal priority to distinguish themselves and electoral needs (including with some core supporters). Labor’s tactics could particularly start to create electoral problems for the Liberals now because it seems their internal needs are starting to predominate (we certainly see the firm unapologetic hand of the old leadership emerge in the pre-selection for Mayo).

This lurch back will mean that their current incoherent position on the government’s Green Paper, which seems to be; “we thought of an ETS first, but we want to go slowly” will be unsustainable. It was clear watching senior Liberals over the last few days that this is a line with which practically none of them agree - but for very different reasons.

Abbott’s forthcoming book, for example, constitutes a political challenge from the old leadership for the party to go back to its core principles (whatever they may be). It was fun watching him promote his book on Lateline on Friday while talking about climate change. He was clearly bursting to say what he really felt about climate change and spell out the electorally unpalatable ‘truth’ like Jack Nicholson in A Few Good Men.

Government pressure for bipartisanship agreement will bring this out. Not only that but Rudd wants to do it every year. However, the strategy will only work if Rudd simultaneously pressures them through the electorate (like Howard did with the War on Terror, Menzies with the Cold War). Accentuating the electoral damage from a sceptical position will bring out the other side of the Liberals' debate whose position is also becoming untenable.

For if the Liberals’ current line is incoherent, it is at least doing one thing for the old leadership, destroying Turnbull’s political career. It seems Turnbull’s political challenge lasted about three minutes. He may have made just a small concession to the old leadership by agreeing on excise cuts and now waffling on about the speed at which Rudd is introducing the plan but he has now effectively joined the sceptics. As Barrie Cassidy brought out nicely with his interview on Insiders, Turnbull has ended up adopting just another form of the “wait for the world” position and is getting closer to Nelson’s position of last week that Turnbull stuck his neck out in opposing.

It is not as though Turnbull, politically tone deaf as he is, does not have an example of what is happening to him. Andrew Bolt was dead right, we are now hearing about Costello again because Turnbull is on the wane. It is certainly not because Costello is, or ever was, a realistic threat to Labor. Commentators keep speculating what would have happened if Costello had the opportunity to take on Rudd, but in fact we already know. While Howard was paralysed in 2007 and scratching around for ideas, Costello had many opportunities when the field was clear to put an alternative forward; in the 2007 Budget, during the APEC leadership implosion, for example. But they never came. It was why he couldn’t challenge for the leadership but had to wait for it to be handed to him on a plate, which in politics it never is.

Turnbull has at least made something of a start to a real political challenge for the leadership. However, it is clear that he agreed to those small concessions from the sceptics because at the moment he doesn’t have the numbers. What he fails to realise is that by agreeing to those concessions and failing to provide an alternative, he never will.

Hard to move forward, can’t stand still

Phew. Thank goodness Australian motorists have been spared having to pay an extra couple cents a litre on petrol until 2013 in a market that could thump on an increase of a hundred times that by then. Environmentalists may cry that Rudd is bowing to political expediency by cutting petrol excise to offset any price impact from an ETS, but actually the politics of this decision aren’t that great.

Without getting into the pros and cons of the climate change debate itself, the political problems of what the government has done is pretty evident. For a start it undermines its domestic political message that this is a national emergency. It is pretty hard to talk up the dire need for sacrifice if a few cents a litre on the cost of petrol is now accepted as too much. It doesn’t help the international message either. Moralising to developing countries about the need to constrain growth to save the planet is a bit harder from a government that can’t even persuade its wealthier citizens from paying a bit more for petrol.

But more fundamentally it aggravates the government’s basic problem. This government doesn’t have a problem of having to make unpopular decisions. This government has a problem of struggling to find any unpopular decisions to make. With no real economic program possible, climate change at least allowed the government to look as though it has a principled agenda that requires it to take unpopular decisions for the greater good. There was the added advantage that climate change action wasn’t even unpopular, except in the imagination of the media. Even raising petrol prices to beat global warming was accepted by more than not. But it seems on petrol prices, that such support was not enough and that this government needs overwhelming approval before it can put a foot forward.

It is important in looking at the political impact of the climate change agenda to see it upside down from how it is being portrayed in the media. The Rudd government is being presented as drifting along but now faced with a major political challenge that could make things worse, requiring it to give in to political pressure on petrol prices to save its neck. In reality the government needs the climate change agenda to prevent that drift from becoming worse, just as Howard, also without any real domestic agenda, needed the War on Terror (and to exaggerate it) to save his pointless government.

It is this political drift that has driven the petrol debate. Anyone listening to the recent furore around petrol prices would think prices were sailing along until recently when they suddenly spiked. Actually this is not the case. The increase in prices over the last year has not been that out of line with much of the decade and indeed it followed a decline so they have only just passed their previous high in 2006.

We are hearing about petrol prices now more for political reasons than straightforward economic ones. ‘Insensitivity’ to cost-of-living was an anti-political mood exploited effectively by Rudd last year. Nelson is trying to use it this year but is having less success because he treats it at face value as really just about cost of living rather than the anti-political sentiment it is, explaining why his 5c excise cut was a flop.

It is vulnerability to this anti-political mood that underpins the New Sensitivity and the political class’s indulgence of complaints about living standards in what are actually buoyant economic conditions. It also influences how the government has responded to Nelson’s petrol excise and is proceeding on climate change. Ultimately that vulnerability is a sign of its loss of a social base now in the final stages with the ALP's last break with the unions and the implosion of its one remaining effective faction. Uncertainty over core support means the government does not feel it has a platform to rely on when it wants to take on opposing interests. Sensitivity to the real basis of its support is also probably why it looks to be following Howard’s tactic of avoiding by-elections where it can, as now appears the case for Mayo.

Such a government response may keep the dogs at bay for the moment but does not solve the problem in the longer term. The decision takes away a position that Nelson used to keep both of the warring sides of his party from each other’s throats, but it does add to his credibility. Nelson’s tactics were making him vulnerable to that most grave charge of the day, ‘short term politics’, which Rudd tried again on The 7.30 Report last night. Unfortunately, this decision makes it looks as though Nelson was raising legitimate concerns.

ETS is about using the market mechanism to change behaviour but the New Sensitivity means the government seems reluctant to allow it to do so. Yet neither can the government stand still. Without moving forward in this issue, the government is likely to find the same anti-political mood that brought it into power turned against it. Nelson is vacillating to survive but he occasionally stumbles on the right note, such as when he raises suspicions that this is just a revenue-raising exercise. It continues to be anti-politics cynicism, rather than the hip-pocket nerve, that threatens to corrode this government’s agenda as it did for the last one. It is why the government keeps on being asked for guarantees that no-one will be worse off from the compensation measures, because no-one trusts government not to screw them in the end. It would seem that to counteract this, sooner or later the government will need to up the ante again.

Only the beginning

We can't have a situation where Australian industry is bound to take steps to curb greenhouse gas emissions, but competitive countries like China are not bound. Mr Garrett doesn't have a plan to cut emissions, he has a plan to cut Australian jobs.

J Howard 29 October 2007

My how time flies! Nine months ago senior Howard Ministers were crawling all over Garret’s ‘gaffe’ that Labor might sign up to emission targets without China or India as a sign of the eco-extremism of Labor’s front bench. Roll forward to July 2008 and it is the leader of the Liberal party who gets into trouble from his own side for suggesting that a carbon-cap ETS should not go ahead without China or India.

The Howard government might have formally signed up to an ETS a year ago, but in political reality they played it as sceptics. We’ve had a brief interregnum of the Liberals toeing the climate change line after the old leadership were discredited by the election defeat. However, now it is starting to reassert itself on the party by forcing Nelson to dump the post-election line.

Nelson has resumed Howard’s pre-election tactic of formally going along with the climate change agenda while politically remaining a sceptic. The media has presented Nelson’s final position as back to where he started, but it isn’t really. Here is what he actually said in Launceston on Friday:

It’s very important from our perspective that the scheme actually start preferably in 2012, and that when it starts, if the major emitters throughout the world have not committed then we should start with a very, very low economic impact in Australia which in plain language means a minimal impact on jobs, on electricity bills at home. And certainly we believe very strongly that there must be no increase in the price of petrol as a direct result of the implementation of an emissions trading scheme.

That is, he agrees to an ETS without commitment from China and India - as long as it won’t have any impact. Nelson’s return to Howard’s tactic is because he faces the same dilemma that Howard did, which prevents the Liberal leadership from being able to come out firmly on one side or the other.

The most immediate dilemma is an electoral one. The sceptic line is out of step with voters in core Liberal seats, not just in the inner metropolitan, as people like to talk about, but also in rural regions as well. Tony Windsor, Independent MP for the blue ribbon conservative seat of New England is not a leading advocate of climate change action as a political death wish. This is not just a consideration for MPs like Turnbull and Hunt, but also for those who would identify themselves closer to the old leadership like Julie Bishop and Joe Hockey.

On the other hand, there is a more ephemeral question of ‘brand’ and what the Liberal party stands for. The 2007 election will be the last one where the Liberals could feasibly try an anti-union scare, so they need something. It is conceivable for the Liberals, as the party of business, to oppose a policy that could be seen just as an extra tax and so rally some of their other core supporters (like small business).

However, there is another reason why Liberals would have been associated with a sceptic line until recently. It was US foreign policy. Howard’s position on climate change, like the war in Iraq, was fulfilling a fundamental principle of the Liberal party, being the most loyal ally of the US. The problem the party now faces is that this line is changing, with both the Republicans and Democrats now facing the difficult task of recapturing the lead on the climate change agenda. The dilemma for the Liberals is, how should they respond to a US foreign policy that is in a state of flux?

The erosion of the Liberals’ core domestic agenda and its foreign policy strategy were both problems faced by Howard in the last year that Rudd exploited so well. It was what led to the implosion in the leadership in the last months of the government that would have broken to the surface had not the electorate intervened. Now with Nelson lacking the trappings of power to keep those divisions on side it would seem that there is little to stop it erupting again, especially as after last week, egos are now involved. This is not over by a long shot.

Breathing down his neck

Poor old Brendan. Just in case he thought he might be able to play down the differences between him and Turnbull following the latter’s feisty appearance on Lateline on Wednesday night, Abbott then intervenes to make sure Nelson can’t wriggle out of it. Without a hint of irony, the former Health Minister attacked the theological fervour in the climate change debate and spelt out the split that is there for all to see.

There was also a knife buried in Abbott’s comments when he noted that it was the partyroom not shadow cabinet that would decide policy. It is a deliberate shot across the bows of the Liberal leadership to say that he is prepared to challenge it from the floor to push the sceptic line, especially to take on Turnbull and Hunt, but by implication Nelson as well if he gets in the way.

Nelson’s piece in The Australian tries to please everyone and claim that his policy has not changed since the Howard Cabinet agreed on the Shergold report. But of course it has because the risks he talks about of Australia starting a scheme before the rest of the world were dismissed by Shergold. At the end of it he tries and pose himself as only looking at the issue of an ETS from the most effective way to deal with climate change, but such finesse is a waste of time. The debate has already been polarised into believers and deniers.

Nelson is caught here in the position he has always been in since he assumed the leadership, between the old leadership who lost control of its party and a challenger who was unable to take it. Over the last two weeks it has been clear that the old leadership now feel that Turnbull is less of a threat and that it is time to reassert control. Turnbull has been forced to respond to the U-turn as otherwise not to do so would have damaged his credibility. But given his attempt to calm down the rift yesterday compared to Abbott’s willingness to up the ante and spread it out into the partyroom, it looks like it is the old leadership, not Turnbull, who have the numbers.

Turnbull’s challenge begins

Turnbull’s appearance on Lateline last night was very significant. It marks the beginning of something that keeps being talked about as a constant fact of Australian political life, but we haven’t actually seen before, Turnbull’s real political challenge for the Liberal leadership. As those subjected to the hammy escapades of the former Treasurer will know, telling everyone you want to be leader does not constitute a political challenge, what Turnbull did last night does.

In the interview Turnbull undermined the entire climate change U-turn conducted by the Liberal leadership over the last fortnight. He flatly contradicted his leader’s main point of opposition to Rudd’s climate change agenda; that the ETS should be conditional on other countries getting theirs up and running. More importantly, he didn’t make much effort in portraying the difference as a mistake of interpretation and kept repeating that he has had ‘discussions’ with Nelson over his position since he made it on Monday.

Unusually for Turnbull, who tends to be politically tone-deaf, he did it in a way that was fairly savvy. He posed it as nothing more than a continuation of the position adopted by the Howard government a year ago when it announced the setting up of an ETS by 2012. It is not so much that this is going to change his colleagues’ minds. They would all have seen Howard’s abandonment of his scepticism last year as the politically expedient move it was. But it will at least neutralise any attacks on Turnbull as disloyal.

More importantly in the interview he touched on the point that will really make some of his colleagues stop and think; by November this year, dragging heels on an ETS will not only be out of line with the global political agenda, but with the US as well. Both Obama and McCain fully support the setting up of an ETS. Just in case there is some doubt, let’s reiterate a basic law of Australian politics, it is simply not possible for the governing party, or the one that hopes to be, to be out of line with US foreign policy for any sustained period.

In reality, Turnbull probably had little choice. To have gone along with the U-turn would have destroyed his credibility as it has probably already done for the coalition’s environmental spokesman Greg Hunt. Turnbull's challenge is on an issue that will most annoy the old leadership but on which they are the most vulnerable. It is why climate change has the potential to be the most dangerous issue for the stability of the coalition.

Things might get interesting now. Turnbull may cite Howard’s name but in reality the old Howard leadership is behind the Nelson's U-turn as indicated by Nick Minchin’s backing of Nelson on Tuesday. The problem for them is that while the sceptic line may be politically destructive in the long term, the Liberals are desperate for a distinctive position to cohere the base right now. Turnbull’s criticism of Rudd for choosing 2010 rather than 2012 hardly does the job. Always an interesting one to watch in this is Julie Bishop, who would be identified with the old leadership but once again, as with the apology, has distanced herself from their more politically difficult positions. It’s a clever move given that Nelson has now undermined his position as compromise candidate for a problem the Liberals can’t, in the long term, resolve.

Bodies on the track

Australia has got a train coming down the track that's got Mr Rudd's face on it.

B Nelson

Yes Brendan, and you are right in the way.

Back in the days when Patrick Cook was funny, he used to run Murdochian headlines of ‘Labor split looms’ to mock one of the proprietor’s favourite themes. We now have the latest variant. Rudd’s stepping up of the climate change agenda has Costa fighting rearguard action from the last union-influenced Labor government in the country and the WA government fulfilling its historical role as a lobby platform for mining. Such reports are fair enough, there will inevitably be some ructions as Rudd finishes the transformation of the ALP to the technocratic organisation it is elsewhere in the country. But if Labor has bumps on the road to becoming a party of bureaucrats, climate change surely has the potential to be even more troubling for the coalition.

Didn’t the Liberal party just lose a branch recently? The agreement of the Queensland Liberals to merge with the Nationals effectively dissolves the party’s organisation and removes it from the political scene of the country’s third largest state. One of the joys of the merger has been to watch the coalition try to give an electoral reason for something that was done for purely internal, and largely negative, reasons. One National MP had a go a week ago, using everyone’s current favourite sign of a conservative revival:

It's all very encouraging I've got to say and I think conservative politics in Queensland are certainly on the edge of a new era. I think following the by-election in Victoria in Gippsland on Saturday, people realise that we've got to have a strong united conservative force and I think Queensland is leading the way.

Of course, you might just as easily say that a by-election where the coalition’s vote was helped by the Liberals running a candidate against the Nationals for the first time in more than two decades proves the exact opposite. Never mind. It helps avoid the awkward fact that the real reason the Liberals merged was that it was becoming so dysfunctional that burying itself into the Nationals outweighed any negative electoral impact, such as that pointed out by an unhappy former state Liberal president:

I can't see us now winning seats in and around Brisbane. These people are more likely to vote for the Greens than a party that lurches to the Right.

Bob Carroll touches on a couple of interesting points about what is happening to conservative politics. First he highlights the underlying fissure between the Liberals voting base in the city and what is seen as a more conservative social agenda by the Nationals. It is also interesting that he appears to suggest the Greens as a more likely destination than the ALP. It highlights the importance of social/environmental issues but also reiterates the one thing about the ALP that would have deterred any switching coalition voter, its relationship with the unions.

The supposed divide between the Nationals and the Liberals is really just the Nationals in their long struggle to find an ideological role after their real one had ended. It helps the Liberals present an organisational collapse of one of their state branches as a political move (if only the WA Nationals could be such a haven!). However, it has also helped the federal Liberal leader to represent a more fundamental political problem as an organisational one. The dislocation between many Liberals supporters and the party’s agenda (the ‘doctors’ wives’ syndrome) has often been noted and usually over-stated. This is mainly because commentators fail to recognise what are critical issues and what are not. Voters may disagree with the party about its social and environmental stances, for example, but these can be outweighed by more core considerations.

For traditional coalition supporters there were two key issues that bound them together. The first was opposition to the unions and government spending, an issue that began losing its resonance with the last Labor government, revived by the Liberals before the election, but since then must surely have lost its effectiveness for good. The second was foreign policy. With Australian foreign policy geared to ally itself to whoever was the great power of the day, the right in Australia would always position themselves as the most loyal. With Howard’s IR policy an unwanted flop during his government, the US’s War on Terror at least gave his supporters something on which they could agree.

However, this time it went wrong. As seen with the G8 Summit in Japan this week, climate change, the agenda of the US’s rivals, is the now the focus of global diplomacy not Bush’s War on Terror and even Bush was forced to tag along. Following US foreign policy down the neo-con cul-de-sac has left the Liberal leadership on the wrong side of global politics and it has been struggling to keep up. Howard was so caught out by the US re-think last year that he ended up calling one US politician a friend of terrorism twelve months before he became the front-runner for the US presidency. At APEC he tried to jump on the climate change bandwagon by trying to drum up a ‘new Kyoto’ with Bush to not only to keep up with the international mood but also with his core voters in blue ribbon metropolitan seats. However, both Bush and Howard had too much baggage and personnel changes were needed for a real turn. When Howard lost in November, the Liberals switched sharply on climate change and their spokeman Greg Hunt positioned himself as the most hard-line on the issue claiming Rudd had gone ‘soft’.

Unfortunately this ran into trouble. Firstly, because Labor had climate change sown up. Like the media, the Liberals under-estimated Rudd’s commitment to the issue. Secondly, without being able to mark out a clear position on the number one foreign policy issue and with IR now a busted flush, the Liberals have nothing to distinguish themselves on. This ‘brand’ problem is behind the Liberals’ lurch back that now appears underway.

But how sustainable can this be? It not only puts Australia’s traditional ruling party on the wrong side of the global agenda, but after November, probably the US one as well. Furthermore it puts itself on the wrong side of many of core supporters at a time when it has no other compelling issue to hold them. Gippsland was a product of a political era now passing with a government that hadn’t yet found its core theme but with a kick from traditional Labor supporters who had an idea of what is coming. It will be interesting to see whether Labor wants to make the next by-election in Mayo more revealing of the new political landscape we are entering.

Crunch time - an update

Truth? Leave that to the scientists. But inconvenient? Hardly. When the media says that pushing the climate change agenda will be a major political challenge and problem for the government, what opinion polls are they looking at?

The Rudd government does face a challenge. It is to re-establish the authority and direction of government now that the major political parties have lost their historical role and social bases. Climate change will help it do so. It is the political cornerstone of this government and reinforces the three main planks of Rudd’s agenda.

- It belittles and sidelines the old politics as short-termist and irrelevant in the face of a global calamity.
- It lowers expectations about what government would normally be expected to achieve by placing a natural straight-jacket around the usual things which government would have been expected to deliver, economic growth and living standards.
- Finally, with the end of the old political system making domestic programmes pretty well impossible, it locks the government into a global agenda from which it gets its authority.

To listen to the media you would think that the government is about to embark on a programme that is unpopular. Yet every major poll shows that there is very strong public support for the government taking action. In fact, if there is any criticism, it has been that the government has not been doing enough (56% according to a recent poll, versus 4% thinking it is doing too much). Newspoll says 61% think a carbon ETS will help global warming and 56% are willing to pay more to make it work. Even on the most direct hip-pocket issue, petrol prices, after months of watching them sky-rocket, more are still willing to pay up as a price to stop global warming than not. If this is a political challenge, what’s populism?

However, the media ignores the polls because it does not fit into how they see Australian politics at the moment (interestingly an exception seems to be The Australian, where every Newspoll is sacred and where the last one seems to have registered. Megalogenis has been getting closer to what is going on and even Dennis, fresh from writing this sort of histrionics, appears to have twigged that maybe a bit of a rethink is in order).

For the rest of the media, who never really understood why Rudd came to power in the first place, the climate change agenda looks like an unwelcome burden for the government rather than its salvation. The ABC, which appears to have adopted a permanent pose of weary cynicism since Howard lost, can’t work out whether climate change is a con (e.g. Chris Uhlmann’s bizarrely personal outburst on yesterday’s Insiders) or simply beyond the capacity of this government. Since climate change came back into the news, Kerry O’Brien on The 7.30 Report has been interviewing government leaders with a disbelief that they can’t see the train wreck coming (listen to his bewildered questions to Tanner on Monday to hear the media’s incomprehension of what is happening in Australian politics).

In his interview with Rudd on Thursday, again O’Brien talked about climate change as though Rudd was the bravest politician in the country. This obviously suits the Mandarin to be portrayed as someone who is prepared to take tough decisions. One problem with coming to power with no social base and no traditional domestic programme is that has been very hard to find any tough decisions to take (it’s unsurprising that his claim that such tough decisions were behind the Gippsland loss did not convince).

However, at one point in the interview Rudd was in danger of giving the game away when he made the obvious reply to those who think pushing climate change action will leave them vulnerable to an opportunistic opposition – they won the last election. If climate change were the big political challenge then Howard would have taken advantage of it. After all, Labor clearly promised an ETS and never pretended it would be cost free. In fact what happened was that it was the Liberals, who initially tried to pose as pragmatic sceptics, who were forced to U-turn as they found it was politically destructive, especially with their own core supporter base in the cities.

Howard’s concessions on climate change and the apology marked the start of a high-wire act by the Liberals straddling their own traditional party programme and the type of policies that their core support now supported. Their recent reversal back to the sceptic line is not because of electoral necessities but because that contradictory position is no longer sustainable internally. There are internal problems for Rudd as well, tapped into a bit in Gippsland and likely to produce resistance within some quarters of the ALP. But this represents little more than the final stages of the party breaking with its old social base. Unlike the Liberals, Rudd has at least somewhere to go.

The media’s blindness to what the electorate is saying on climate change mirrors their refusal to accept the polls on Rudd’s lead a year ago, for the same reason. Rudd’s ascendancy a year ago marked the resumption of realignment in Australian politics that made the old orthodoxies redundant. The climate change agenda brings this realignment to a head. The problem for Rudd is not to convince the electorate of a change in direction but to accommodate government and the ALP to a change in the electorate and in global politics that has already happened.

Rats set the Mandarin up nicely

Here we go. It looks like we are starting the period which will give us a feel for whether Rudd will win the next election (something that, surprisingly, everyone seems to be already so clear about, especially given the confusion over the last one).

The next few days will bring the international agenda of climate change into the core of Australian domestic politics. Climate change has already been embedded into state politics both around issues like the Murray and imposition of water restrictions. State governments, like the one in Queensland, have already proven adept in using the issue to excuse poor infrastructure funding. Penny Wong will be bringing this together by making the link to the international agenda of meeting emission targets at this week’s COAG. It will give the moral authority for Canberra to impose itself on the state governments and centralise political power that is at the crux of the Mandarin’s New Federalism.

But climate change will extend far beyond issues directly related to the weather. As Rudd and Swan reminded us last week, climate change is now going to be viewed as the number one economic issue going forward. But not economics as we know it. Forget the last Budget (in which about the only thing to do with climate change was to cut solar panel subsidies), what we are looking is almost an anti-economic agenda, not how to maximise and sustain growth, but how to constrain it.

One major problem the media has with assessing the political impact of the climate change agenda is that it flies smack into something that commentators continue to believe is a guiding principle of Australian politics, the ‘hip-pocket nerve’. It led them astray last year when they struggled to work out why a government that was widely seen as a competent economic manager, throwing tax cuts around, was on their way to defeat in the middle of what was seen then (and still basically is) an economic boom. When Labor’s polling lead finally became impossible to deny, the story then changed that it must have been rising interest rates that was the cause of Howard’s defeat.

Belief in the power of the hip-pocket nerve also coloured the way the media saw Rudd’s use of grocery and petrol prices. For Rudd it was mainly an anti-politics way of portraying Howard (“Australians have never been better off”) as out of touch. For the media it was supposed to be a cast-iron promise of action. It meant that when Nelson proposed cutting petrol excise, it was seen as a master-stroke exposing a government breaking its promises. This was despite the polling that showed that the electorate had little illusion that the government could do much about it and more importantly, remained highly favourable of Rudd and the government.

This meant that as the petrol debate started to move on to climate change in parliament the media became wrong-footed as to what it was about. They not only largely missed the shift, but saw it as adding even further problems for Rudd. An example of the confusion is Kerry O’Brien’s introduction to an interesting interview last night on The 7.30 Report when he said on Rudd’s chances of imposing a climate change agenda:

If today’s headline in The Australian is accurate based on their latest opinion poll suggesting a collapse of public optimism and increased fear of the future, then Mr Rudd’s job is just going to be harder.

Dead wrong. It is that increased fear of the future, which is already embedded in Australian political debate, that is the pedestal on which climate change politics stands.

As Rudd alluded to when he attacked the current political system at the 2020 Summit, there is dissatisfaction at the short-termism of political debate and a strong demand for ‘long-term’ policy. This attack on short-termism is mainly a recognition that the current political process no longer works given the exhaustion of the major parties’ traditional programmes, leaving normal political debate as pointless. But the long-term focus is not exactly a positive one to replace it, but rather a demand to deal with what are seen as long-term threats. It seems almost all areas of major public policy are becoming dominated by dealing with such ‘time-bombs’, whether the demographic time-bomb for retirees, the future health care crisis, the skills crisis that could leave Australia behind in Asia or, of course, the myriad of dangers associated with climate change.

It is the fear of the long term threat that underpins the acceptance of sacrifices to deal with it. It was why the Liberals made such a disastrous move to link petrol prices to climate change as they did last week. The government struggled to come back on a simple excise cut other than to say it would use up the surplus, that fiscal air bag which is supposed to deal with some economic crash in the future. But as soon as it went on to climate change, it allowed the government to not only to be able to say there was little it could do to reduce prices, but actually to make a virtue out of it by turning higher petrol prices into a moral necessity. It is a sharp example of how climate change reinforces the government's agenda of lowering expectations of what it can practically do. Cutting emission targets by 60% seems like a grand plan of action, but a 40 year timetable turns it into something else entirely.

While the media’s failure to understand this government may have annoyed it, it can also be very helpful. The media’s wrong assessment of this issue has turned a government position that taps into a deep political shift in the electorate into a ‘brave’ position. Nelson is being portrayed as a populist on climate change but actually the polls would suggest it is Rudd that is the populist. Far from being too focussed on climate change as the Liberals were trying to portray the Rudd government last week, the overwhelming view is that it is not doing enough. By believing in the hip pocket nerve, the media have given Rudd the ideal political issue for any government, one that is popular, but looks politically ‘tough’ at the same time. Some have compared it to Howard’s GST, which is not bad (the GST helped Howard), but tax reform was never this popular. Probably a better comparison is Howard’s gun clampdown after Port Arthur. But Rudd won’t have to wear a bullet-proof vest and this issue could run and run.