No revival, just decay – another update

It is perhaps not surprising that Newspoll’s reporting of a Labor polling slump in Queensland and South Australia is being seen as another sign of the eternal pendulum working its way back to the coalition now that Labor holds power in Canberra. But Mike Steketee was right to strike a note of caution in automatically making this conclusion. It was not just that the polling in both states only takes Labor back to where they were in 2005 (when it was Howard who was very well entrenched in Canberra). Labor’s decline doesn’t seem matched by a revival in support for the respective coalition leaders Springborg and Hamilton-Smith.

Rudd’s arrival to the Lodge has changed the dynamics of state politics, but less to restart the political pendulum of the old two-party system than to erode it even further. Just as we see in NSW the collapse of Labor’s dominant faction leading to a government implosion, we have another good example of the unintended consequences of Rudd’s arrival in what is happening to Rann, who until last year had been the nation’s most popular political leader. The main issue he is being troubled by is the fate of the Murray. Rudd’s coming to power in Canberra has turned what was a positive for Rann into a negative.

While Howard was in Canberra, and taking a climate sceptic line, Rann could present the government’s inaction over the Murray as a political problem. However, with Rudd’s arrival it has now turned into a problem of the entire state and in its inability to act even when it agrees on something. This is why the issue is not necessarily benefiting the Liberals directly who, after all, saw their primary vote slump by 10% in Mayo earlier this month to Greens and other independents running on exactly the same issue. While the national press keeps on thinking the touch paper on Rudd’s climate change agenda is going to be an extra 8c a litre by 2030, the real problem for the government is staring at them in the polls that consistently say that people don’t mind bearing the costs but they think the government is not doing enough. Labor can push emission cuts out to well beyond the political life of anyone in the government. Unfortunately the Murray crisis creates expectations over what it can do and highlights its impotence now.

Labor’s success in the 1990s was not a reaction to Howard, but a result of a depoliticising of state government that now we see was a precursor to the erosion of its authority. It is no surprise that questioning of the need for the states is becoming louder. The federal government’s response to this is becoming ambivalent. It is not just that Rudd’s automatic response is to take-over more of the state’s functions, but appears to want to bypass that tier by looking for a more important role for local councils, which lies behind his summit of the nation’s councils in Canberra.

But at the end of the day this is not just about the states. Just as Labor’s technocrat model in the states eventually worked its way to Canberra so the loss of authority cannot help but eventually encroach to the centre. We are a long way to seeing it have an effect on the federal government’s popularity, but the basis is there if only in the background. This week we see it creeping into the assumptions behind the row about Rudd’s trip to New York. Even if Labor wins the argument, it is basically to say that if there is a financial crisis, he may as well go to the US, as there is nothing government can do here about it.

The game is not back on – a further update

We have now had three polls since Turnbull arrived; AC Nielsen showing a three-point movement to the Liberals, Newspoll showing a one-point movement and now Essential Research (courtesy of Poll Bludger) also showing just a one-point shift to the Liberals. The last was held over two weeks straddling Turnbull’s election, so unless it cancelled out a Labor ‘bounce’ towards it in the first week (unlikely from a 58-42 base) Turnbull’s election hasn't done much good for the Liberals’ rating in this poll either. The media’s narrative of a Turnbull-led revival is starting to look like the myth it always was.

Given Turnbull’s mediocre personal ratings it is not hard to understand why. Turnbull scored worse than Rudd on all of the attributes but the one he scored even worse than Nelson on was “arrogance”, which is the killer. None of this, of course, is really about personality. No doubt reports of Rudd’s arrogance are true, but he scores even better than Humble Nelson because he knows how to avoid it becoming a political disadvantage (as seen again on Rove the other night). The importance of a politician not being seen as arrogant in an anti-political environment was a lesson also learnt by Howard as he saw how it damaged Keating. Since coming to the leadership, Turnbull has failed to address this problem and allowed the government already to define him.

Dealing with it now will be tough because Turnbull still has a problem of authority with the party, which unlike Rudd’s has not fully given up the past. A very ambiguous show of supoort by Costello on Lateline last night shows that the old leadership may have lost control, but has by no means given up on getting it back.

The game is not back on – an update

The last two days have been a reminder why psephological sites are a popular alternative to the mainstream press in this country. Once again political journalists have shown that they never let polling numbers get in the way of a good narrative, namely that Nelson was an aberration and the Liberals are back in the game.

It wasn’t just that the polling bounce from Turnbull was either modest (AC Nielsen) or non-existent (Newspoll). Even the meaningless preferred PM poll that all the journalists focussed on, may have made Turnbull look good against Nelson, but hardly anyone else. AC Nielsen’s historical comparisons aren’t readily available but the 24% Turnbull reported by Newspoll puts him in on a par with Crean and Latham during the final days of the crack-up. Can’t quite remember what Mr Shanahan thought about their chances at the time.

Probably two take-aways from the new Liberal front bench. Firstly, those who think Turnbull’s rise represents a new direction for the Liberals will struggle to find evidence for one in the line-up and may even be asking what a right-wing social conservative like Sophie Mirabella is doing with the women’s portfolio. Secondly, there are some powerful people sidelined (sort of) in the reshuffle, notably Minchin and Abbott. The latter was an odd decision. Given that Abbott has just undermined his portfolio by saying he was bored with it, to keep him there effectively gives Macklin a free run. Are both of those planning to leave politics soon with Costello? Maybe not.

The game is not back on

Whether it’s the three-point improvement recorded by AC Nielsen, or the one-point ‘bounce’ recorded by Newspoll, neither seems to suggest that Turnbull’s accession to the Liberal leadership has done much for the party’s standing. Such a movement for a new leader looks modest by historical standards. That doesn’t seem to matter to the nation’s political analysts, however, who seem desperate for a return to politics-as-usual and are grimly determined to see Turnbull’s take-over as a sign the ‘game is back on’.

They might be disappointed. It’s important to start by recognising what Turnbull’s win represents for the Liberals. Some interesting ideas in a piece by Dennis Shanahan comparing the unity following Turnbull’s win and that following Latham’s and Rudd’s respective winning of the Labor leadership.

The comparison has some validity. The victories of Latham, Rudd (and Crean) all represented stages in the party trying to break from the past as the political representatives of the unions and find a new role. It wasn’t till Rudd (combined with Gillard) that the final break was made by cobbling together a new technocratic agenda spiced up with a little bit of Rudd’s personal values and anti-politics gestures. For the party, Rudd’s win meant the decline in the power of the factions and, even if not formally, a dismissal of the interests of the union movement. The latter best summed up by Labor’s new IR laws (that as one writer accurately said, were more about making Workchoices efficient), which would only be a surprise to those who never bothered listening to the minister who brought them in.

Such a change never happens in a straight line and as each attempt made some progress, it then lapsed back to the past, represented by Beazley’s return to leadership, before moving on again. The ‘unity’ behind each new leader that Shanahan talks about was never quite what it seemed. It was less support for the new leader but the power of the factions and unions weakening, still openly undermining in the case of Crean, more behind the scenes for Latham but then fatally weakened and pinned down by an alliance with the left under Rudd. It doesn’t mean there isn’t still some surprisingly deep personal hatred of Rudd from some influential sections in the party, it just has no political basis to do anything with it.

There are some parallels with what is happening with the Liberals. Dealing with the question of what to do when there was no need for an anti-union party was suspended during the Howard period, although started to emerge with the drift in the government and the leadership implosion near the end. The old leadership was damaged by the November loss forcing a compromise with Nelson, until it fell apart with Nelson’s failed gamble to deal with Turnbull last week.

Turnbull’s problem is that he has won the leadership before having given the Liberals any sign of somewhere new to go. Just as with the Labor leaders, the ‘unity’ behind Turnbull is less support around him than the vacuum left by the old leadership. While Labor had the corporeal presence of Beazley to remind them of the past, the Liberals have the less tangible Great Hypothetical who can overshadow the leadership from the back bench without even having to say a word.

This leaves Turnbull quite vulnerable at the moment. Remember that some big power brokers, like Minchin, preferred Nelson. Turnbull's unwillingness to change Nelson’s positions, some of which he openly opposed, is one sign of how carefully he must move. The delay and wrangles over choosing the front bench is probably another. This might be less of a problem if Turnbull could consolidate himself by finding an agenda that can unite the party while putting pressure on the government. But conditions don’t look right for him to do so. Social issues and the republic will only cause him trouble, so it would seem to leave him the economy. However, events aren’t favourable for this as they seem.

Of course Turnbull was absolutely right that the RBA’s use of ‘light years’ to describe the distance between Australian banks and those of the US wasn’t accurate. But politically what was the purpose of pointing it out? The reality nowadays is that the political class has handed over authority in economic debate to an independent body and that means not being allowed to have any opinions that can differ from that independent body during a crisis. If you can’t discuss the economy at times like this, it shows that the entire economic debate has lost its meaning.

The financial crisis has not just reconfirmed the power of the regulators and independent bodies over the political class in this country, it has also firmly stamped the power of global markets over any pretence of domestic economic policy. Even compared to just a few months ago, any domestic angles to the economic debate over interest rates, productivity etc. have been swept away by international events. Rudd will only need a few photo-calls with US Treasury officials to justify his trip overseas since that is where the attention is wholly focussed.

In current conditions, there is only one thing for governments to do, build up a surplus to protect from economic conditions over which it has no control. Turnbull’s weakness in the party has left him still blocking revenue-raising measures proposals in the Senate on weak political grounds that he can’t justify. Indeed, he believes in it so little that he is now undermining the whole point of it by saying it is ‘only’ $6bn and has a minimal impact on revenues anyway (which is true).

There would be one issue that Turnbull could push that he does stand for and would cohere the party, tax. It is probably why some in the press may be so excited. Just like they were when Hewson was going to slash taxes fifteen years ago. Things hardly look better to try that on now.

Turnbull: A poor man’s Hewson

It has been mind-numbing to read press comment on Turnbull’s win of the Liberal leadership. Almost all of it has focussed on Turnbull’s personality. Probably the nadir was Tuesday night’s interview on The 7.30 Report, which O’Brien allowed to end up with Turnbull giving excruciatingly personal detail of how his father never rubbished his mother in front of him. No doubt his career suggests that he is bright, dynamic and full of beans. On the downside, he very well could be arrogant and a poor team player. So what?

Where there was political analysis, like yesterday’s Age editorial, it tends to be based on a basic misunderstanding about Turnbull’s ascendancy – that it represents a change in the party towards his agenda. It certainly doesn’t indicate the party’s support for his position on the critical issue of climate change. Only a few weeks ago the Liberals hardened their line against the government (where is Greg Hunt these days?), leaving Turnbull isolated against most of his fellow shadow cabinet colleagues and especially the Liberal party backbench. It doesn’t really represent a shift in the party on social issues or the republic either.

Turnbull got up because the old leadership had lost its grip on the party, not because a new leadership had gained it. Just as Rees became Premier of NSW after a short time in Parliament because of the collapse of the NSW Right, so Turnbull’s meteoric rise after barely three years shows that he does not come as a well-established representative of a party faction, but because of the collapse of the old leadership that so rigorously opposed him. His victory on Tuesday came from across the ideological mixture of the party’s left and (less talked about) the party’s right.

Here there are similarities to Rudd, who is not formally attached to any party faction. However, Rudd has his alliance with the left to manage the party. Turnbull has no real support that can do that job. The lack of base he has in the party is highlighted by the fact that the only two issues he is really known for, the republic and climate change, he can’t talk about because it would cause internal problems.

Instead, as he has told anyone who will listen, he is going to concentrate on the economy - as though he hasn’t been already as the Liberals’ economic spokesman for the last nine months. Over that time he has not landed a blow against a Treasurer who was struggling to find his feet, but instead been caught by inconsistencies in his attacks on Labor (over pensions, spending cuts) and with his own leader (petrol excise). You get the feeling that Turnbull is itching to be an economic dry like an earlier banker who led the party, but is coming up against the political reality that makes it even more impossible than it did for Hewson. Instead, Turnbull is stuck with the New Sensitivity gestures that he once objected to.

Political constraints mean that Turnbull can’t really represent anything more than himself and so we are hearing more about him than what he stands for. Again, there are similarities to Rudd, who complained about personal attacks against him last year, but personalised his candidacy like no Prime Minister before him. It is just that, despite Turnbull’s clumsy attempts on Tuesday, Rudd’s personal background proved more politically expedient.

Rudd knew how to use his background to appeal to coalition supporters and bolster his anti-political attack on the government. In contrast, Turnbull is on the defensive over his background and it is doubtful whether he has the political skill to know how to make use of it. He could make a virtue of his banking experience like Hewson did (for a while) but political conditions won’t allow it.

By leaving it to be all about himself, he is open to the charge of being out of touch because he represents no-one but himself. The press’s objection to Labor’s attack on Turnbull’s personal history totally misses the point. It is not ‘class warfare’ and it is irrelevant that Rudd’s wife has made him wealthy as well. Within a few days the government is already succeeding in portraying Turnbull as detached and it seems difficult to see how he can do much about it. Oblivious, Turnbull has walked into a political vacuum that gives him little real support in the party but little political space to build it as well.

The old leadership loses control

Turnbull’s 45-41 win may be narrow but with figures like Minchin and Costello on the losing side, it represents a major shift for the Liberal party.

Since the election defeat the old leadership has been struggling to regain control of the party; Abbott’s tactical withdrawal in favour of Nelson as a compromise candidate, reapplying pressure on Nelson to harden his line over the winter and finally, a Costello ruse to come back to the leadership have all been tried to recover ground despite the damage such moves have probably done to the party’s electoral standing.

Nelson has been like a cheap hammer broken in the process of battering Turnbull down and the Costello play was pretty well at an end. Today’s spill was less about catching Turnbull early but Nelson having his last and best chance to use the Howard legacy to keep Turnbull at bay.

That last attempt has now failed and draws a period to a close. Commentators have seen this is as a loss of the right, but this is not that helpful if reports are correct that the ‘mad, young right’ backed Turnbull. It is more to see the losers as the old leadership that arose out of the wrestles in the Liberal party that began in the Hawke years. Behind the Howard-Peacock wrangle was how to respond to Labor doing what the Liberals were supposed to, knobbling and winding down the trade union movement. Howard represented that section of the party that thought the Liberals had no choice but to carry on doing the same. This was after all what the party was about. The irrelevance of Howard’s Workchoices exposed that such a strategy had reached its end.

Yet the Howard legacy has lingered into the post-election Liberal party because the question still remains of what will replace it. There is little sign so far that Turnbull has the answer. The media has warned us to expect fireworks but we haven’t seen many from Turnbull since the election. If anything he tends to be rather windy and waffle on. In fact so uninspiring has he been as shadow Treasurer that he has enabled Swan to look good, which is what few in the media would have predicted nine months ago.

Actually if there was anybody who had attempted something new to deal with the current period, it was Nelson. His adoption of the New Sensitivity (right to his teary farewell) gave the Rudd government its few uncomfortable moments. It may have become increasingly shrill, as the old leadership insisted he go in hard at the same time, but his attacks on petrol, carers bonuses and pensions, while of little long term effect, did at least have the government flailing around for a few days.

Turnbull has had no such moments. His response to all of these initiatives has rather been a dry fiscal rectitude to such tactics, but not married it with the government’s reasonably effective appearance of keeping in touch. His attempt today to ‘relate’ to the common man/woman at his press conference was cack-handed (good lord, rental accommodation!) and only exposed how easily he will be classed by the government as out of touch.

Turnbull could respond to such anti-political attacks from the government by posing against the political establishment himself. On paper, given his successful career outside parliament and his short time in it, he would seem well placed to do so. Rudd has done this to some degree and it was something that Hewson, another former banker, used very effectively against Hawke before Keating exploited Hewson’s failure to understand the economic reform days were over. Yet Turnbull has not shown much sign of doing this and if anything has been rather defensive on being out of political circles since entering parliament.

Indeed Turnbull’s experience has shown that while outside Parliament he has tended to identify with the cultural political elites that Howard and Rudd have had so much fun posing themselves against (it would be interesting to wonder if Turnbull would try again as leader something like the row he picked with Rudd earlier this year over the Henson paintings). Of course, Turnbull’s most notable political position before entering Parliament was on the Republic where his insistence, like Keating, on the President being chosen by Parliament enabled Howard to outmanoeuvre them. On the Republic, Rudd has given Turnbull that deadly bipartisan bear-hug he tries on all of his opponents, but Rudd wouldn’t even ask his own party to draw up a plan for getting a President as Head of State let alone leave it to parliament to choose it.

Today represents the failure of an answer to the critical question about what the Liberal party is for, not the success of a new answer to it. Indeed, when Turnbull does have something to say he tends to sound more like Keating than anyone, which is probably not a long term strategy for the Liberal party, so it suggests we might see more waffle rather than excitement from the new Liberal leader. It might be a bit presumptive at this early stage, but he looks like an easy mark for the government.

Their last and best chance

An underlying assumption of the continual speculation around Nelson is that the Liberals would do better with the electorate under Costello or Turnbull. The reasons are not immediately obvious.

Costello’s electoral prospects are fairly easy to deal with. He would make things worse. The Liberals could not bring themselves to dump Howard for Costello last year because every poll confirmed that Costello was less popular than Howard. He would be just as unhelpful now. Even at the height of The Australian’s campaign to draft Costello to take over from Nelson this year, it was forced to report a Newspoll that the paper may have trumpeted as showing Costello was more popular than Nelson, but only by ignoring who with. Costello scored much higher with Liberal voters but would have taken the party backwards with the non-Liberal voters they need to win over. Presumably for the same reason, he was the one most associated with the Howard government for which Liberal supporters may be understandably nostalgic but for everyone else, was a government they had just happily got rid of.

Turnbull is a more difficult matter. Turnbull’s nimble feet before the last election helped him to be one of few coalition MPs to improve his vote at the last election. But Turnbull’s flexibility is also his problem both electorally and internally in the party. Before the election, Turnbull was positioning himself to be identified with the social issues that more suited his electorate than the party. It is that conflict which Turnbull has been negotiating ever since. The trouble that Turnbull has faced since the election is that conflict has become more acute and he has not managed it well.

There is a basic misconception journalists have about political parties, especially those on the right, that they are about nothing more than winning office. As though all of the millions that have been pumped into the Liberal party over the years was to give its 100 or so in its parliamentary party something to do. Those millions of course were so that it could carry out a program to support the interests of its backers over questions like industrial relations and government spending against the union movement and their political representatives in the ALP. With such issues no longer seriously dividing the two parties, the Liberals are left with the fundamental question of what they are for that, since the November defeat, is overwhelming electoral concerns.

It is that blindness to the internal dynamics of political parties that make much of what is going on in Australian politics at the moment incomprehensible to the media. Just as the shenanigans of the NSW Labor look increasingly bizarre so they mis-read the meaning of the leadership tussles in the federal Liberals. For a start they underestimate the problem of Turnbull, and how his flexibility on core Liberal values so annoyed significant sections of the party at the first leadership contest just after the election and how the party’s struggle to redefine those values since has made him the man sections of the party have lined up against.

Yet while Turnbull could be contained, the old leadership could not fully regain control so soon after the election it lost. The result was Abbott’s withdrawal in favour of Nelson and Nelson’s leadership has rested on that stalemate ever since. Gradually, the old leadership has recovered to try and reassert those core values leading to the lurch back of the party from the accommodation with Labor’s agenda in the early months, especially on climate change. Never mind that such a lurch back has probably accounted for the reversing of the downwards drift in the government’s polling and re-energised it, to the Liberals their internal needs are more important.

It was also why Costello was drafted back. Even though probably few Liberals (unlike some journalists) believed he really was a serious contender for the leadership and that he was electorally unpopular, his presence was a way of reconfirming something roughly like the core values that the Howard government was supposed to represent. It was also a way of holding a threat over Turnbull’s head to keep him at bay. With that ruse having just about run its course with the publication of his memoirs, Costello is now performing a similar service by, according to Dennis Shanahan, helping Nelson rally support for the vote.

It is noticeable that the old leadership appears to have stood back and allowed it to be between Nelson and Turnbull (although Abbott appears to be sniffing around Turnbull in case he gets up). Nelson’s pitch is calculated to undercut Turnbull on social issues on same sex couples but isolate him and reassert core values of the old leadership on the politically critical issue of climate change. Furthermore, Nelson is indicating to the party that the stalemate is coming to an end with a purge of Turnbull supporters. Turnbull’s concessions over the last few months, especially his fudge on climate change a few weeks ago, has undermined his credibility as an alternative in the party (and appears to have eroded his one advantage, his electoral standing) without winning the trust of the old leadership. Nelson’s spill is probably his, and the old leadership’s, last and best chance to use Costello and the credibility of the Howard legacy to deal with the Turnbull threat.

Libs re-emerge to a changed landscape

If Brendan Grylls was really vacillating just as a political manoeuvre to get a better deal from the WA Liberals, it seemed a very destabilising way of doing it. It came at the cost of the Nationals looking all over the place for a week at the federal level with the party’s leader making an extraordinary public plea for the WA party ‘not to do it’ after initially hailing Grylls’ bargaining as a good idea.

It would seem fair enough that, as Grylls said, the decision was not unanimous. However, the reason cited for the decision, that a Lab-Nats pact would leave it at the mercy of the Greens in the Upper House, was probably more one that they could all publicly agree on rather than the real reason. As seems to have been forgotten, the Nationals received their warning in Lyne just a week ago that their core base was melting away and that they need to do something, prompting Truss’s 24 hour thought bubble of leaving the coalition. In WA, it is unlikely that without Grylls being able to get all of his MPs on side to join Labor, he risked splitting the state party. The Nationals remain torn between becoming an independent party and a party of Independents.

The Nationals problem is not some demographic phenomenon of sun-seekers retiring on the NSW coast but a political one. They are the most obvious victims of an unravelling of the old two party system that is affecting all of the parties. Having already experienced this unravelling with the reluctant endorsement of his former coalition partners, Barnett now must deal with it in a very different political environment than that faced by the last Liberal state leader six years ago.

The immediate reaction of the press is that a lone Liberal Premier will now create problems for Rudd’s federalism, which seems to be based on the sophisticated premise that it relied on nothing more than a unanimity of Labor leaders. But this looks at it upside down. Over the last two decades we have witnessed a depoliticising of state politics into it being about little more than public services provision. That may tend to favour Labor, but creates problems for them as well. An erosion of political authority at the state level was what Howard tried to take advantage of last year and what led the states to look to Rudd to take the responsibility of state services off their hands and to let the buck stop with him. It was less a case that Rudd’s federalism relied on there being all Labor Premiers, than the political conditions that tended to favour Labor at the state level but undermine them as well.

It is hard to see how Barnett will turn that around even leaving aside the narrowness of his win and the hesitance of the Nationals in helping him get there. The Australian’s Jennifer Hewett thinks Barnett’s canal idea makes him a big ideas man, while forgetting why he had to drop it in this campaign. Everyone may complain that politicians don’t present any grand visions, but without political authority, they look out to lunch if they do. The Liberals, like Labor, ran an entirely negative campaign. Labor’s lost because theirs seem mainly focussed on the wrong leader (the previous one) and in the brief period of bliss that greets even a recycled leader, the Liberals didn’t look that bad. But there is nothing there to launch a political challenge from.

Without such a political basis for taking on the federal government, Barnett ought to tread carefully. As we are already seeing in the Senate, being obstructionist without any political justification for doing so leads the Liberals open to the charge of just playing politics for its own sake, which this Prime Minster is well used to exploiting. Barnett’s relative inflexibility in dealing with the Nationals over the last week compared to Carpenter, shows that he is not yet in tune with the shifting rules of this new game as much as Labor. There is no doubt, for example, that when COAG next meets in WA in a fortnight that Rudd will go out of his way to embrace Barnett with the same anti-political bear hug that Carpenter tried on the Nationals, but possibly with more success.

Poor Costello, used again – Epilogue

It is with a heavy heart that this blog must now admit that its campaign, in conjunction with The Australian newspaper, to draft Costello to the Liberal leadership has now failed. Thus, does this blog’s attempt to join with The Australian to change the course of Australian political history come to an end.

It is possible that this blog’s motivation might have differed from that of The Australian. For this blog, it was a case of not only hoping for an end to the constant speculation about an uninteresting politician, but that Costello’s accession would have cleared up some of the last remaining myths of the Howard era like:

1. Costello would have been electorally more successful than Howard
2. Costello’s record of economic management means anything
3. Costello had a political agenda

For the farce of Costello’s supposed pretensions for the leadership goes back further than the last few months. In the last few years of the Howard government, the media continued to see the leadership implosion, that comes to any government without an agenda, as a Costello leadership threat. This was an illusion that Howard himself fostered by constantly posing Costello as ‘his logical successor’ while doing everything possible to make sure that wasn’t the case. Howard, and cronies like Abbott, used Costello to ride the vacuum within the party and give the impression that the Liberal party had a future after Howard, rather than facing the profound uncertainty over its reason for existence as it is heading towards now.

There were two things that enabled Howard to deploy this tactic. The first was that Costello did not have a political basis for challenging Howard nor even, it seems, thought there was a reason to have one. Despite his re-writing of all the important issues he and Howard were supposed to disagree on, his appeal to the party then, and now, keeps on boiling down to little more than ‘freshness’. Costello keeps insisting this freshness would have helped him do better than Howard last year, despite the absence of a single poll supporting that view.

His failure to comprehend even what a challenge means comes out when he said he didn’t take on Howard because he didn’t have the numbers. As Keating, Hawke, Fraser and Whitlam (all of whom took over from their respective party leaders only after first launching an unsuccessful challenge) could have told Costello, the first step of presenting an alternative is to break from what was already on offer. Costello may have differed over Howard’s ‘symbols’ of the republic and the apology, but on what truly defined his government, a token commitment to Iraq and the need for a bogus faux Thatcherite attack on a dead union movement, they were absolutely in agreement. This failure to have any basis to challenge Howard is why Costello expected him to do what Prime Minsters pretty well never do and just hand over power (even if Howard followed Costello’s favourite and only example, Menzies, Costello would still be waiting until 2012).

The second thing that enabled Howard to pose a sham challenger as a real successor was that Howard really was riding a vacuum and there was no other alternative to Costello either. If Howard really had a serious challenger from another quarter, he could not have pretended to put his leadership up for grabs as he did. That vacuum was exposed for all to see during APEC week when the Howard leadership imploded but nobody stepped in, leaving it to Howard to recompose himself and soldier on (by the way, the Liberals’ habit of putting Howard’s recovery down to the persuasive powers of Jannette is pathetic). This lack of alternative is summed up by the problem of Turnbull.

This is not because Turnbull is incompetent. It is just that he doesn’t seem to stand for anything that has much to do with the Liberal party (or anything much at all for that matter which is why he waffles on). It is why the old leadership understand the hole in the party’s agenda as a problem of Turnbull and why they are so intent on stopping him becoming leader. Their attempts over the last two months to prevent an erosion of the party’s ‘brand’ and define themselves more sharply against the government also led them to use a bogus Costello challenge to reassert the party’s credibility from the Howard years and ward off a Turnbull challenge. Like most tactics that are used too long, it ended up doing the opposite and exposed the party to ridicule by leaving it hostage to a book launch.

With the Costello ruse now run its course, the old leadership is looking for another way to deal with the Turnbull problem. A lot of ideas are being thrown about. An amusing one is a Turnbull-Abbott alliance which would be the most amiable combination since the Peacock-Howard combo of ’87. Another is to do what Costello did on announcing his decision to quit politics in November and talk about a ‘new generation’. This code for anyone but Turnbull might mean Hockey or someone else the old leadership can push around. Or maybe, just maybe, since he hasn’t left Parliament yet …

No revival, just decay – an update

There has been an interesting media reaction to the election results on the weekend. There were some instances of trying to scratch out a picture of business-as-usual with the eternal pendulum swinging its way back to the coalition (which required a highly selective focus on just the anti-Labor swing in WA while ignoring the by-elections, as well as the manoeuvres of the Nationals in WA itself). But generally the view was that something else was afoot and that last weekend showed a broader dissatisfaction with the political process – summed up by the SMH’s front page headline of the ‘Cranky Nation’. Peter Hartcher argued that the weekend showed a new mood across the country against the major political parties that began with Howard’s fall.

This seems fair enough, yet as a theory this does not quite work. As commentators never tired of reminding us right up to 24 November, there was neither any great dissatisfaction with either Howard or his government and the mood, at that stage, was generally optimistic about the economy. Howard lost not because of any groundswell of anger or dissatisfaction (not even on Workchoices, as some like now to believe). The government lost because it didn’t stand for anything and since the fading of the War on Terror, could no longer pretend it had a programme, neatly summed up by Howard’s plan to retire.

The exposure of the bankruptcy of the Liberal government and Rudd’s accommodation to it has started the unravelling of the old two-party system, that effectively died during Keating’s time but was suspended in aspic by the War on Terror. That unravelling is continuing and what we saw on the weekend is what, to all intents and purposes, is a political crisis and the major parties scrambling to deal with it.

In NSW we see how it has shattered the most powerful faction of the post-war Labor party. Observers are right that the new cabinet shows that the NSW Right have by no means lost total control of the government, but in choosing Rees they have started a process that means in order for him to survive, he will have to further destroy their influence.

The changes underway in WA are not much less dramatic. You had to admire Carpenter’s performance on The 7.30 Report as he puts on his humble face and tries to adapt to operating in a political vacuum. It may mean that you don’t even have the legitimacy to call an election six months early without looking ‘arrogant’, and have little to campaign on when you do, but it does give you the flexibility to propose an alliance with what are supposed to be your ideological opposites without batting an eyelid. It would be interesting to know what some in his own party, who are having trouble with Carpenter’s keenness to meet the demands of the Nationals now, make of his admission that he was already secretly negotiating with the Nationals months earlier for an alliance.

The Nationals, who were already feeling the sand shifting under their feet during Howard’s government as they watched their safest seats fall to independents, are torn between staying where they are or stepping into the void of becoming independent themselves. You can understand why they are divided on which direction to take. To not change is to see their heartland melt away, but to go the way of the WA Nationals has its dangers too. Grylls is going to have to show a united party with whoever he goes with but the logic of a party acting like Independents is that each of the members become so.

Given the likely resistance of at least a couple of Nationals of dealing with Labor, there still must be a greater chance of them settling back with the Liberals, especially as Barnett has back-tracked on his earlier refusal to agree to the Nationals’ demand for regional royalties (although the fact he took a full day to do so, after digging in against the idea and keeps on wanting a traditional coalition arrangement, highlights that the Liberals are being the least adaptable of the three parties).

But even if they did, that does not mean that nothing has changed. By proposing a deal with Labor in the first place Grylls and Carpenter have already changed the old bi-polar landscape. It would be interesting, for example, if Labor did cobble enough together to govern without the Nationals. It would be highly likely that Carpenter would still offer an agreement with the Nationals. If that happened it would certainly put pressure on the old pro-coalition Nationals in the party who would have to choose between joining Labor and getting the regional royalties or staying with the Liberals in opposition and getting nothing.

Ultimately the events of the last few days are being driven more by a crisis of the political system than a groundswell of electoral anger and certainly not the usual oscillations of the old political system. We have seen three leaders, Rees, Carpenter and Grylls moving onto new ground in an attempt to adapt to it but who have yet to drag their parties fully behind them.

No revival, just decay

Those who think the election results across the country on Saturday showed the inevitable swinging back of the pendulum following the election of the Rudd government, must have been squinting at them with one eye.

They couldn’t have been looking very hard at the federal by-elections. The unsettling take-away for the Nationals in the wipe-out they suffered in a heartland seat like Lyne, is that the winning candidate, Oakeshott, was a National in everything except name. It suggests the old truism that being in a party is a greater advantage than operating on your own as an Independent is being turned on its head.

The problem for the Nationals is that with rural politics being about nothing more than subsidies these days, being an independent gives you more chance of negotiating them than forming a coalition with a bunch of losers like the Liberals. It is no wonder that Warren Truss is reconsidering the arrangement, reflecting a rethink that has already happened in SA and now could be underway in WA.

Results from Mayo are hardly more encouraging for the Liberals. A swing against them of over 10% may be due to the large field of candidates as Nelson claimed, but it is hard to see how, given that it didn’t include the Liberals’ main challenger for votes, the ALP.

However, the by-elections weren’t that great for Labor either. Their refusal to run in both seats shows that after Gippsland, it has quickly reverted to the previous government’s fear of any elections that might test the shallowness of its support. The result has a curious impact on Labor supporters and voters in both electorates. Labor supporters reportedly handing out HTVs in Lyne for a National-in-all-but-name must wonder what they are in politics for. In Mayo, given that the Greens ended up almost toppling the Liberals, Labor’s absence raises more awkward questions.

Nelson said on Insiders that the Mayo disaster was a result of local factors. But neither he nor the Insiders panel got around to mentioning what that local issue was. There is an almost unfathomable anger at the major parties over what is happening to the Murray basin, which borders onto the electorate. This was behind the strong showing not only of the Greens but also the independent Di Bell running on a ticket to save the Murray (assisted by Xenophon). Nelson's insistence a week ago that the problems of the Murray were not a result of global warming may have satisfied the old leadership on his back, but hardly helped their cause in Mayo.

But Labor isn’t in the clear either. Wong’s concession that nothing can be done to save the Murray at the beginning of August led to an outcry that quickly had her and Rudd running back down to the mouth a couple of weeks later to throw a few extra million dollars into water buybacks. The problem for Labor exists within the chasm between their openness over the limited abilities of government and a claim to have a plan to change the globe’s weather. The gap between rhetoric and reality on the government’s climate change strategy is exposed at the lower end of the Murray and it is this gap right now that is a far greater problem for Labor than the media’s obsession over the economic impact in 2030. Labor’s inability to manage that gap and take the campaign directly to the Liberals in what should have been an ideal seat to do so, shows that climate change is an issue that has the capacity to be highly corrosive for parties.

However, if there is anywhere to see not only the corroding authority of the parties, but also the changing landscape because of it, it is in WA this weekend. The depoliticising of state politics in Australia has taken away the issues that both major parties have used to build authority in the electorate. In WA it was made even worse by the corruption scandals. Not so much because of undue lobbying influence (like that doesn’t happen anywhere) but because it could not be dealt with politically but relied on an independent body lording it over the major parties.

However, since state politics has turned into little more than public services, Labor has had two advantages. The first one is being perceived as better able to manage public services. This comes less from practice than from their ability to manage public service unions and, more importantly, the Liberals’ inability to avoid talking about cutting taxes everytime they open their mouths. Everyone knows what that means for hospitals and schools.

The second advantage they have is the state of the Liberals. With hindsight the timing of the election was probably a problem. No doubt Labor thought that calling it straight after Barnett took back the leadership would deny him time to settle back in. But with WA Liberal leaders it is more likely that given time, rather than being enhanced, his authority would have been eroded as it was for others over the last few years. Beazley was right, they could have had it earlier to take advantage of the Buswell fiasco. Or perhaps they could have chanced it later to see if the continual back-biting would put Barnett under pressure again. As it was, Labor chose to go to the polls during the one of the few windows of cohesion the Liberals have given WA voters over the last seven years.

With the Liberals looking coherent for a while, it left Labor little to campaign on, as shown by their re-hashing of naff anti-Buswell attacks after he had just been dumped. By the end Carpenter was having to scratch around for Green preferences by going on about uranium mining and GM crops (the relatively low preference flow suggests it didn't work that well).

Yet if the Liberals held together up to election night, the coalition did not. The ABC election coverage started to become bizarre late on Saturday night after the Nationals leader Grylls in an interview began giving very clear signals that his support for the Liberals was not to be assumed. He called Katherine Maynard, the SA Nationals MP sitting in Rann’s Labor cabinet an ‘inspiration’, and said he would be talking to her following the election.

Yet following this rather important development, the camera switched back to Kerry O’Brien sitting above his now redundant graphics of the L/NP seat count and carrying on as though nothing had happened. To his right, however, Julie Bishop’s eyes had widened just a little bit more as she assured that of course the Nationals voters wanted a change in government while Stephen Smith maintained the humble face that he and Carpenter were putting on that night as what he warned Bishop of just a few moments before, started coming to pass. Beazley reinforced the Labor leadership’s absolute comfort with a deal with the Nats shortly after by advising state Labor to hurry up and make it.

Bishop may be right that National voters want a change in government - it just might be with Labor rather than the Liberals. Some Nat supporters may not be happy with that, but the fact that their leader can openly talk about the possibility of supporting Labor suggests party resistance might not be too much of a problem. Labor has already shown in SA, Victoria and Queensland that it is ready to adapt its style to suit regional interests. Certainly they seem more flexible than the Liberals who appear at the moment to have ruled out the Nats deal-breaker demand for regional royalties. It highlights again why Labor has done so well in the last decade, it is more adaptable to the erosion of the traditional two-party system.

Rudd’s election has speeded up that erosion, not caused a swing in the two-party system back to the past. Labor might be struggling to keep pace with it at the state level but it still looks more able than the Liberals to do so. The collapse of Labor’s most entrenched faction shows the extent to which Labor is transforming. The Liberals’ difficulties with dealing with this post-political environment come out in the pointless ideological tussles that destabilise the leadership. For the Nationals it is a case of adapting to survive. Their negotiations in WA pre-empt the re-think that is happening federally that they might start considering becoming an independent party before they become, as in Lyne, a party of Independants.

RIP NSW Right

The unprecedented dumping of a NSW Labor Premier has coincided with an almost as historic event in the life of the ALP. Iemma’s fall and the rise of an unknown from the left mark the collapse of the national party’s most important faction over the last three decades, the NSW Right.

In a way, Iemma has achieved the technocrat resolution he wanted but has destroyed the NSW Right and taken himself down in the process. Tensions in the NSW Right had been growing throughout Iemma’s attempt to break with the unions over electricity privatisation. Paradoxically, even though the Right Centre Unity as the dominant faction in NSW was best placed to take on the party over the issue, by breaking the union links on which the NSW ALP was based, it naturally undermines the faction on which it was built. Iemma’s attempt to break with Centre Unity over his ministry reshuffle was too much for the faction that supported him, but it signalled its own demise as well.

Rees and his deputy Tebbutt may come from the Left but they do not represent a victory of the Left and the party grassroots. Rees’s tenure in Parliament of barely over a year should be one clue, the role played by Tebbutt’s Left faction husband, Anthony Albanese, in Federal Labor should be another. This is not the traditional left of the party. Rather it is a new faction that may come from the left, but whose purpose, as the perennial losers of the faction system, is to subvert it. In taking over, this new left accepts the basic framework that they have inherited. Even if they do not agree with the privatisation, as Rees made clear on Lateline last night, he agrees with the financial constraints that require it. If he doesn’t go ahead with the privatisation, he will have to cut back on infrastructure spending. Either way he will end up doing something the old left will not like.

While this new technocratic left, that is Rudd’s right hand in Canberra, may ostensibly be in control in NSW like elsewhere in the national party, there is a question about how complete its victory is in that state. Unlike most other states where this change has happened, the NSW branch has had to undergo it later, as the old Labor model was so entrenched, and so at a time when the Liberals are so decrepit that Labor did not have the luxury of opposition to carry it out. There is a sense that NSW Labor has had to present the electorate with the conclusion before they themselves have reached it. It would suggest more blood-letting is on the way.

The Senate: A Club to beat the Liberals with – an update

It was extremely gracious of the government to give the Liberals another chance to block the luxury car tax bill after one of their dozy senators stuffed it up by missing the vote. You would almost think the government wanted it.

The media might want to see this being all about the two independents but the government is having none of it. As Lindsay Tanner wanted to make clear last night on Lateline, this is meant to be all about the Liberals who, less than the Independents, have to give at least some semblance of a political agenda from which to block the bills. They are struggling to do so. Pressure from the old leadership for Nelson to go in ‘hard’ against the government has put him in the position of having to oppose taxes on luxury cars and Barcadi Breezers, giving even Swan the chance to crack a funny about the opposition being led by Robbie Williams.

Lateline’s Leigh Sales refused to take Tanner’s advice and wanted to interview the Family First’s political nobody, Steve Fielding. The result was one of the most moronic (and boring) interviews she has done this year.

Footnote: Have Julie Bishop and the Liberals totally lost their sense of self awareness that they can’t see what talking about how she protected Brendan Nelson from the bullying Ms Neal looks like?

Economic policy posturing

We all wait with bated breath, and everyone in my electorate has their fingers crossed.
Jason Clare, Labor backbencher

You only have to watch Wayne Swan sitting on the front benches yesterday waiting to be told what a key plank of his economic policy will be to realise how hollow economic policy in Australia has become. Besides an attempt to turn the classroom into the crucible of the Australian economy, economic policy seems to be about trying to influence the real pullers of the economic levers, the Reserve Bank. What passes for economic debate comes down to who said what when to influence the RBA and whether Swan’s ‘Genie out of the Bottle’ comment was more irresponsible than Nelson’s call for a 50bp cut.

Of course, the RBA doesn’t have any real control over the economy either. The political class’s ‘respect’ for the bank’s independence only came as Keating lost control of monetary policy following the deregulation of the economy, leading to Costello to graciously hand it over to the RBA.

That respect has come in for a battering over the last year as the political class has used the economy to maintain credibility. From the start of the government, Rudd talked up an inflation ‘crisis’ partly as a means of discrediting the Liberals but more as a way of clamping down on any spending ambitions on his own side. To do so, they had to imply that the RBA had failed to keep inflation under control. Since the Budget, it has been the other way round and talking down the need for high interest rates and pre-empting the RBA’s move yesterday. Nelson may have put a number on his call for a cut but Swan was pretty well doing the same thing. On top of that, Labor was blaming the interest rate rises for the slowdown in the economy, which was targeted at the Liberals, but presumably implicates the RBA that decided on them.

While the government and the opposition have been using the RBA in a similar way, the Rudd government is in a much better position in this sham economic debate. What Labor has succeeded in doing is to internationalise it and avoid bearing any real political fall-out from the slowing economy. It shouldn’t have found it too hard since the limited control of government over the national economy was already well accepted and helped Labor last year to exploit Howard’s bogus promise to keep interest rates low.

The Liberals, however, like their acolytes in The Australian, cling to the view that the strong economy over the last decade was up to them. This delusion is not only shown by the current hankering for the World’s Funniest Treasurer but the damage Nelson has just inflicted on himself in the last few days. It is not being that much talked about in the media but his call for a 50bp cut was a bad mistake with his colleagues and is likely to speed up his demise. It highlights just the thing they don’t like about him, his devotion to the New Sensitivity. This may be a political necessity these days but undermines the party’s claim to be superior economic managers. It is easy to understand why they cling to this label, because if they don’t have that, what have they got?

Education: Rudd’s Workchoices

Rudd’s speech to the National Press Club disappointed some commentators in that the much hoped for grand narrative never emerged but rather it almost wholly concentrated on one policy area, education. This disappointment partly underestimates the barriers for any of the major parties forging a political narrative, but it also underestimates the political importance of Rudd’s education agenda.

From the very beginning of this government, the media has underestimated the critical role education plays in the political make-up of this government and why it is no coincidence that the portfolio is held by Gillard in combination with those internally sensitive roles of industrial relations and productivity.

Rudd and Gillard always like pointing out how education is key to arresting the lower productivity growth under Howard, which was almost half of the preceding Hawke Keating years. Yet they never quite explain why productivity growth was so much higher during Labor’s last government.

It certainly wasn’t because of education spending. As a percentage of GDP, government spending on education declined steadily through Labor’s 13 years from the high point under Fraser in 1977. It was taken further down in Howard’s first term but then rose back up to the average level of the Hawke/Keating years. It was especially in the tertiary sector, which would have presumably been most critical for the type of skills to make Australian business competitive, that Labor’s cuts were toughest. Howard basically inherited the regime that began with the Labor re-introducing fees in 1989 and followed by Keating’s ending of indexing funding grants to universities.

The secret to the productivity gains under Labor was not education but its relationship with the unions. It was this that allowed wages to be kept restrained during the Hawke/Keating and it was the exhaustion of the relationship that not only caused subsequent problems for Labor, but meant that anti-union initiatives like Howard’s AWAs were a flop with employers.

It is the end of that relationship, combined with the deregulation that has already occurred in the Australian economy that undercuts any real economic debate in Australian politics. We saw this last week with the Liberals’ attack on the economy in parliament when they spent Question Time listing all the negative indicators. The Liberals may like to say Rudd is just watching the economy, but so are they. Pointing out how the economy is deteriorating is politically meaningless if they have no alternative.

Economic policy has been meaningless for some time (shown by ability of the World’s Funniest Treasurer to take credit for the economic success of the last decade). Howard could not avoid the mistake of Hewson and carried on as though economic reform still had meaning, with spending cuts (which he later reversed) and a sham attack on the unions through Workchoices. Rudd and Gillard’s purpose is to change the whole idea of what is considered an economic debate.

We could take Gillard at her word as she gave it on Lateline last week and assume that what seems like an under-funded education ‘revolution’ will change and spending will be increased to schools that need it most. But you have to wonder why they don’t just monitor those schools that need extra funding (in case they don’t already know) and simply give it to them, rather than make a song and dance about it by issuing public assessments of the schools. Of course, there is nothing wrong with extra information being made available to anyone but how many parents really can’t tell whether their local school is any good or not? Or if they do get told, it is hard to see that there is much they can do about it.

The public report cards on schools may not have much practical effect but it will have a political one. Just as the government has made economic policy all about the skills levels of individual workers, so now the quality of schools has become the key determinant of progress in this country and parents are being expected to play their role. To turn a social question into one of individual responsibility is usually a right-wing trick and it is no surprise that Howard tried this first in 2004. But he was not leading a party that ever had the faith in education like the one that Rudd leads, especially as the main organisations that Labor used to see as the route to advancement, the unions, have now become redundant.

Fortunately (for the sake of political clarity) we always have in Australia an extreme example that highlights the absurdity of this education obsession and the idea that schools and their teachers are responsible for the progress of Australian society. The report from which the government is drawing its inspiration notes that:

The ‘tail’ of underperformance in Australian schools is concentrated amongst students from low socio-economic status (SES) families and Indigenous students.

Does anyone seriously believe that the problem with indigenous communities or the education underperformance of its children ultimately comes down to lack of poor schooling? It is obvious in this case that it is just part of something broader that results from not only lousy schools but also lousy housing, hospitals, roads and employment conditions that determine the living conditions for the parents.

Workchoices gave the Liberals a sense of purpose even if it did not have much practical effect in the Australian workplace. Some government backbenchers may be unhappy about taking on the teachers unions, but the obsession with education that justifies it, gives Labor the similar sense of purpose, even if, like Workchoices, it has the same limited practical effect. This is why, no matter how many assurances the teachers unions may get on extra funding and higher pay, they will understandably be left with the uncomfortable feeling that they are being used to take the responsibility for something else.