Moving Forward: Where To?

Simon Benson is the chief national political reporter at the Daily Telegraph, and one-time President of the NSW Press Gallery. In 2001, Simon Benson won the Eureka prize for Environmental Journalism and was highly commended in the Sir Keith Murdoch Award for Journalism in 2005. Simon Benson is the author of Betrayal: The Underbelly of Australian Labor. On Friday 17 September, Simon Benson addressed the Sydney Institute, joining Glenn Milne and Margot Saville in a discussion on the federal election of 2010.

MOVING FORWARD – WHERE TO?

SIMON BENSON

Unfortunately, this topic presents infinitely more questions than there are currently answers. But before we get too concerned about the vagaries of our own national political situation, I’d like to make an international comparison.

I read some unflattering commentary in the Chinese press yesterday about one of its neighbours which also happens to be the world’s second biggest economy, and is also plagued by instability. “Three elections for prime minister in a year reflect the embarrassment and volatility of Japan’s political system,” it reads.  “In the 1990s, Japan’s economy slowed and stumbled forward during the so-called ‘lost decade’.”

Since 2000, except for former Prime Minister Junichiro Koizumi’s five-year continuous governance, the average of all other prime ministers’ terms is less than a year. “The frequent change of Japanese prime minister is attributed to the country’s economic performance, political system, party mechanisms (factional rivalry) and public opinion.” I think only New South Wales has a record to rival that of Japan.

An obvious one was that Labor wrongly assumed that Tony Abbott was unelectable. Another is that Labor can no longer ignore the dysfunction with its machine

It is New South Wales where we can find the origins of how we got to this point in Australian politics. The reality is that the issues now facing the federal government, the Labor Party, go to the core of its own modern structures. Labor is adrift. It doesn’t know what it stands for and, although it recognises the problem, it is still mired in the focus group, political spin driven approach to government that has proved disastrous in NSW and now likewise federally.

There are a number of lessons out of the election for Labor. An obvious one was that Labor wrongly assumed that Tony Abbott was unelectable. Another is that Labor can no longer ignore the dysfunction with its machine – a machine that not only destroyed a government in NSW but sacked a prime minister and crippled a Federal government as well.

There is no doubt that the wrecking ball that has swung through NSW paid an unwelcome visit to Canberra. Paul Keating predicted the slide into nothingness when I interviewed him almost a year ago for my book on the bleak future for Labor if it continued down the path it was on. It was certainly something alluded to in the Hawke/Wran review following their 2001 election loss as well.

I called the book Betrayal. Superficially, the title refers to a promise made, and then later broken by Kevin Rudd to help Morris Iemma in 2007, when he and his treasurer Michael Costa were pursuing plans to privatise state owned electricity assets against considerable opposition from their own party and the trade union movement.

At a deeper level it was intended as a reference to the betrayal by the Labor machine men, of the values and ideals that people like Keating tried to instil in Labor, to ensure it became a party capable of reform and able to govern from the middle ground.

In it, Keating refers to the party machine, when he says:

I think the problem with Centre Unity in NSW is that it lacks now an ideology. When I say ideology it lacks ideology other than the sheer pursuit of power … clear enough about that. But power for what? And to do what? … When the motivation of the machinery is unfurnished as to policy purpose, it has nothing more to offer than to focus on marketing and polls.

Keating was talking specifically about NSW but more broadly about the party at a national level. And I think this became transparently evident during the election campaign.

Julia Gillard nominated the problem in her address to caucus last week. “We have to articulate what Labor’s purpose is,” she said.

In a column I wrote yesterday for The Daily Telegraph, I suggested there were other stories to have emerged from the election, beyond the obvious one of a hung parliament, which, while specific to the Labor Party also have implications for how this government will actually govern.

Julia Gillard nominated the problem in her address to caucus last week. “We have to articulate what Labor’s purpose is,” she said. It is bizarre that a government can come to power on such a premise. And her ability to address this has become considerably more difficult on forming government in an ideologically conflicted rainbow coalition.

One development which has emerged, and one that this government will be mindful of, is how it dramatically shed its sizeable ethnic base at the polls. While not central to the issues facing the government and parliament, it provides at least one element of a broader context as to how we got here and one which is paid little attention. I raise this because no government seeks to govern without an eye on its electability.

A Labor staffer told me that when working a booth during the election, in the south western Sydney seat of Watson, mainland and Hong-Kong Chinese, Pakistanis, Sri Lankans, Indians and Lebanese walked straight past them, snubbing their noses at the Labor how-to-vote cards, the first time he had experienced such hostility in 20 years.

The swings in these NSW seats were savage and averaged between 8 per cent and 13 per cent. Three of them held by Ministers.

This was Labor’s heartland. The post war Greek and Italian communities kept it that way. Seats such as Banks, Watson, Werriwa, Reid and Fowler were all considered unassailable.

Forget the spin that suggests NSW did okay because NSW Labor didn’t shed as many seats as Queensland. The reality was an unmitigated disaster and will have a significant impact on how Gillard intends to try and govern. The swings in these NSW seats were savage and averaged between 8 per cent and 13 per cent. Three of them held by Ministers. The only buffer for these seats was the enormous margins they were already on. They were among the safest Labor seats in the country. Not anymore.

To appreciate the significance of this seismic shift, we can go back to 1988 and John Howard’s One Australia policy. As part of his social agenda, Howard suggested that the rate of Asian migration had to be slowed. As The Australian’s Paul Kelly records, a generation of Asian voters flocked to Labor as a result.

These voters stuck with Labor. Even when Keating lost in 1996, those seats recorded only minor swings compared to the avalanche elsewhere. In this election, in NSW anyway, it was the reverse.

Not discounting the other significant issues facing Labor at the election, a large part of the swing in these seats can be attributed to the moment Gillard started talking about shrinking Australia. Labor had a gut feeling that this desperate attempt to appeal to xenophobic extremes in just a single seat in western Sydney – Lindsay – might offend a lot of its other people elsewhere.

Ironically 22 years later, a generation on, and Labor’s faux pax on refugees and population/immigration appears to have repeated the Howard mistake of a generation ago. But this time, it offended the “new migrants” from Asia, the sub-continent and the middle-east. Those in the government who recognise what has happened here, and are concerned about it, are now asking the question: “Is this our John Howard’s 1988?”

But there is a conundrum. Why then did they go to the Coalition?

They didn’t like the immigration whistle, they didn’t like Gillard’s atheism, and a lot of them didn’t like the idea of sacking Rudd, even if they didn’t like him.

Some Federal deniers suggested that the exodus of votes in the south west seats of Sydney then must have had more to do with the appalling state government. The inconvenient truth for Labor is that it was a protest vote from their traditional ethnic base in middle suburbia. They didn’t like the immigration whistle, they didn’t like Gillard’s atheism, and a lot of them didn’t like the idea of sacking Rudd, even if they didn’t like him.

Which brings us to the second story – the protest vote from the other base, Labor’s left. How a party so comprehensively offended voters from both ends of its political spectrum may never be known. Whether it was immigration, refugees, climate change or a whole range of other things, there was a distinct shift away from Labor in the inner city seats.

Clearly a lot of people looking for social justice just didn’t find comfort in Labor, which was once the party that laid claim to innovation, humanitarianism, compassion and social justice. If you remember in 1990, it was also the party of the environment.

But instead of fighting on these issues, Gillard ceded this ground to the Greens and in the process legitimised them as a mainstream alternative for the middle-class left who would have otherwise voted Labor.

Gillard had no reason to sign a deal with the Greens. She had their support anyway. The long term impact of this alliance is already apparent.

There has been a lot of criticism of the NSW Right and its lack of policy and principle. But, by signing an alliance with the Greens to form government, Gillard has also effectively sanctioned the demise of her own faction, the Labor Left, by telling half a million disaffected Labor voters that it was okay to vote Greens.

Gillard had no reason to sign a deal with the Greens. She had their support anyway. The long term impact of this alliance is already apparent. This week’s Newspoll pushed Labor’s primary vote to a new historic low of 34 per cent.

The Hawke/Keating model of sensible broad based Labor party government has been flushed down the drain. Labor will not be able to govern again on a primary vote of this size, without a formalised arrangement with the Greens. If we are talk about a new paradigm, then this is probably it.

Although we only have one other instance by which to compare it with, the make-up of this hung parliament is extraordinary. We have a Labor Party that is flanked at one end by two conservative country Independents and at the other by a rather less conservative Greens MP and a man whom I think most political analysts would find hard to pigeonhole in Andrew Wilkie. All of them have strongly indicated that they will only support the government only on supply and confidence but not necessarily policy

What does this all means for the stability of government?

But, as Machievelli suggested, self interest is a powerful motivator. I suspect that the Independents who now have a sense of relevance will seek to keep this parliament afloat for as long as possible.

The most likely outcome is a medium to long term minority Labor government, timid in its policy prescription, unlikely to engage difficult reform and obsessed with hanging on to power. Of course there is the possibility that the entire show will come crashing down within months.

But, as Machievelli suggested, self interest is a powerful motivator. I suspect that the Independents who now have a sense of relevance will seek to keep this parliament afloat for as long as possible.

It also is possible that Tony Abbott will be able to get significant legislation through the parliament himself, leading to the unprecedented situation of an Opposition being effectively in a position to also occasionally govern from the non-treasury benches. The Greens have already flagged support for his paid parental system.

This is where the new parliament becomes interesting and potentially disastrous. If you lose absolute control of the parliament, then you can potentially also lose control of the budget. In the space of two weeks, there has been a significant rewriting of our national priorities for the purpose of forming government. And there are a number of key areas where there will be potential problems – broadband, the Budget, foreign affairs, and taxation.

Apart from the longevity of the government, the National Broadband Network was the key policy area that the two crucial Independents cited as being critical to their decision. Tony Abbott has made a very shrewd decision in appointing Malcolm Turnbull as the communications shadow.

Labor has yet to produce the business case for the National Broadband Network and is already facing accusations that it doesn’t stack up, even with its forecasts of a 6 per cent return and the claim that the $27 billion of taxpayer funds will be eventually returned through privatisation. This project alone marks a significant shift away from the old ethos.

Despite all the criticisms of state governments, it is the federal governments that have a poor track record on service and project delivery.

Despite all the criticisms of state governments, it is the federal governments that have a poor track record on service and project delivery. If nothing else the BER and home insulation disasters proved this point.

Australia went through a period of deregulation starting with Hawke and Keating. Their motto was that governments steer, they don’t row. The private sector was brought in to do the hard yards. To quote the former NSW Treasurer Michael Costa:  “You’d have to go back to Rex Connor to see projects of this scale being undertaken by the public sector. And now we have one without a business case.” It’s only known rival is the gravity defying over the horizon radar.

Despite all the criticisms of state governments, it is the federal governments that have a poor track record on service and project delivery. If nothing else the BER and home insulation disasters proved this point. They have proven to be more incompetent than anything that a state government has done…including public transport ticketing systems.

Turnbull will bring significant pressure to bear on the government over broadband. It is one big policy area that bought it currency with the Independents. Ironically, it could become its Achilles heel.

In this same portfolio area is Senator Stephen Conroy’s proposed internet filter. The Greens have already expressed their opposition to this, putting another policy area already in doubt.

The broader national issue is the redistribution of services from metropolitan centres to the regions. This has already been agreed to, issues such as the subsidising of broadband for regional customers, health funding and infrastructure funds, which total around $10 billion. Already Ministers in this new government are privately expressing concern that their own portfolio areas will be shaved to contribute to the regional development package.

Not to mention the next round of health funding $1.8 billion, which has also been quarantined to go to regional hospital programs and infrastructure at the expense of metropolitan services, which no-one could argue aren’t in as much need.

It is highly likely this government will have other things foisted upon it, which it won’t like. And the government will have to keep buying off the Greens and Independents through the course of the parliament. And that is before we even talk about tax reform, the mining tax and a potential price on carbon, all of which now are likely to be subject to considerable amendment from the Greens.

I’m not sure the NSW government would agree that the ICAC, which was borne from the hung parliament under Nick Greiner, has been good for them.

This inherently unstable arrangement has the potential for considerable pressure on the budget. The normal checks and balances in the budget process, and the scrutiny of expenditure will be subsumed by politics. The government may get away with it for a while because they are in a good position fiscally. But any notion of getting the budget back to surplus in the time frame promised has already surely been thrown out the window.

Those in favour of this new, inclusive style of government cite hung parliaments at a state level as examples of how they can work positively in a public policy sense. I’m not sure the NSW government would agree that the ICAC, which was borne from the hung parliament under Nick Greiner, has been good for them. Although it has provided an endless source of entertainment for the Opposition.

To cite the NSW example again, for 15 years Labor has not enjoyed the numbers in the upper house. This has forced the government to traditionally do deals with conservative elements such as the Christian Democrats and the Shooters to get legislation through. In return, they would often have to support their positions on some issues. On other occasions it would be the Greens.

Whenever their bills got to the upper house, they knew that there would be endless horse-trading to get them through. Often they didn’t. And critical areas of micro-economic reform were blocked. Morris Iemma and Michael Costa’s electricity industry privatisation bills were the most dramatic examples – ones which ultimately led to their downfall.

The truth is that the state Labor government spent more time withdrawing legislation from the legislative council than it did getting it passed. Gillard, unless she elects a senior person to handle the cross benchers, will find herself wound up in endless negotiation.

This is already evidenced by Gillard’s willingness to allow Rudd to take her place at next week’s UN meetings.

If Gillard intends to do it herself, then we are likely to see an even more inward looking government. One which is constantly battling for its survival rather than tending to its other responsibilities – such as those in foreign policy. The Prime Minister appears content to sub-let her responsibilities in the international arena to the man she deposed, the new foreign affairs Minister Kevin Rudd.

This is already evidenced by Gillard’s willingness to allow Rudd to take her place at next week’s UN meetings. There will be foreign leaders wondering whether Kevin Rudd is still the Prime Minister.

The US elections in 2012, assuming that this government survives until then, poses a new set of potential problems should Barrack Obama fail to secure a second term. How will a Labor Greens alliance – of which one part is highly critical of our ties with the US – deal with a possible Republican Administration?

The only question that can be safely answered about any of this is that we have a government that will dance to the beat of different and differing drummers. And we must remember that support for this government only goes as far as they believe the government is competent.

The only thing that the government has going for it is that Julia Gillard is now the incumbent. If she can restore her popularity, she could win an election in her own right. If she can survive two years and put enough distance between her and the problems of the past, she could conceivably restore Labor’s fortunes and win an election in her own right.

And this is where the Independents have erred, in believing that the greatest threat to an earlier than expected election lay with Tony Abbott. If Gillard gets in a position where she is running high and her popularity is up, the temptation to go to an election will be great.

While many other things may have changed, one thing won’t. Politics.

In conclusion, I think the only certainty is that this will be a “survival government” and not a reformist government, if you exclude parliamentary reform. More importantly the potential for parliamentary gridlock is greater than it has ever been as a result.