The year the ALP loses power

Monday, 7 January 2008 

The almost Whitlamesque speed with which Rudd put in place his new agenda has won applause from his new friends in the press.

For them, it shows just how eager Rudd is to give the voters what they voted for.

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

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

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

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

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

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

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

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

Posted by The Piping Shrike on Monday, 7 January 2008.

Filed under State of the parties

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