Will He Go Full Term? And Other Big Questions Of 2010


January is a traditionally slow time in politics — the Prime Minister himself is still on holidays and the thoughts of many are still on the beach, the cricket or escaping the heat. Yet while Melbourne melts in another summer heatwave and Japanese whalers ply their trade in the Southern Ocean, the nation’s political classes are quietly gearing up for one of the bigger years in recent memory.

There will be no fewer than four elections this year including a federal election. The voting kicks off with South Australia and Tasmania on 20 March. Victoria will go to the polls in late November while Kevin Rudd can (in theory at least) call a double-dissolution election right now, as unlikely as that seems. Most observers think he will go "full term" (which probably indicates sometime around September or October) meaning that federal politics this year will resemble a marathon shadow election campaign.

While every year holds its surprises (remember Godwin Grech?), it’s possible to outline the general themes likely to dominate this year. Federally, the looming election will sharpen the political contest. Labor has enjoyed a constant advantage in the polls ever since taking office. Kevin Rudd’s Government comfortably occupies a broad middle ground in Australian politics, while the Liberal Party has torn itself apart in a civil war fought over the issue of climate change. With the ascension of Tony Abbott, the conservative wing of the party has emerged triumphant, but the real question is whether Abbott and his advisers can fashion a policy platform and political message that will appeal to swinging voters. If Abbott can’t, many Liberal parliamentarians will be swept away in the election, entrenching Labor’s power for a decade.

But Labor too has questions to answer. The ALP’s policy agenda coming in to government was modest but reasonably detailed, claiming to address complex national issues like broadband, education, homelessness, industrial relations, health and hospitals reform, and of course climate change. So far, Labor’s record in office has been mixed. The Government dealt well with the global financial crisis, but at the cost of an ambitious stimulus spending program. In some ways, the stimulus allowed Labor to enhance its credibility in areas like primary school funding, but in other aspects, like the funding for home insulation, the stimulus appears to have been poorly targeted and open to rorts. Meanwhile, central election promises like the National Broadband Network are nothing but logos so far.

And, as we know, the Government’s complex climate change legislation was defeated in the Senate — twice. The Carbon Pollution Reduction Scheme, an emissions trading scheme that would have placed a carbon price on greenhouse gas emissions across most of the economy, was clumsy, bureaucratic and poorly understood by voters. The Government mysteriously failed to go out and sell the scheme to the electorate, preferring to sit back and watch the Opposition implode. The result is that few Australian voters have any knowledge or interest in the single most important piece of legislation of this parliamentary term. This tactical error has combined with a grassroots conservative movement in regional Australia to make climate change a far more politically polarised issue than it was two years ago. Just how the climate change debate plays out in 2010 will have a major bearing on the federal election.

Federally, Labor has most of the good cards — especially the state of the economy. Although it can’t shower the electorate in cash with a friendly budget, it may not need to if the economy continues its robust recovery. Treasurer Wayne Swan has a major reform agenda sitting on his desk in the shape of the Henry review of taxation, which is expected to recommend some important changes to Australia’s current system. By carefully tweaking Henry’s recommendations, Swan can probably find new money to promise to voters while still claiming to reduce the budget deficit. If Swan felt like taking the heat, he could find billions simply by paring back the many fat tax breaks to businesses and richer Australians that were introduced by Peter Costello.

In fact, the main risks for Labor may lie in the strength of the economic recovery. As the economy climbs back towards full capacity, many of the problems of prosperity will return. Rising interest rates, a rising cost of living, water restrictions, increasingly unaffordable housing and groaning urban infrastructure are all facets of the same problem: Australia’s long-term under-investment in a sustainable economy and society. The housing problem, for instance, is a complex issue driven by decades of policy geared towards the belief that Australians naturally want to live in their own homes. The result has been under-investment in rental properties, rapid increases in the price of houses and epic urban sprawl. Untangling this knot appears beyond the ken of any government, state or federal.

Labor’s state politicians enjoy few of the advantages of their federal colleagues. Labor governments led by Anna Bligh, John Brumby and Kristina Keneally have all been in power for a decade or more and voters have no-one else to blame for the parlous state of their slowly crumbling infrastructure. But in some ways, these state governments are not entirely to blame. Australia’s increasingly dysfunctional federal system of government is bedevilled by the dreaded "vertical fiscal imbalance", which means that while the states deliver most of the services, Canberra collects most of the taxes. The upshot is not just that all the states are completely dependent on payments from Canberra to finance essential services like police, hospitals and schools. It also means that Canberra gets to escape the blame when the electricity goes out or the trains don’t run on time. This has allowed successive federal governments to avoid the hard work of essential public service reform, for instance in areas like health. No wonder Kevin Rudd and Nicola Roxon show no sign of delivering on their election promise to take over the administration of public hospitals from the states.

Not that the states are beacons of policy development, either, as the crisis in inland water policy demonstrates. Despite a national agreement and a supposedly multi-state authority (The Murray-Darling Basin Authority) to police it, our inland rivers continue to dry up. The main reason is over-generous water allocations made by the states who have largely refused to do anything to fix the problem. Indeed, Victoria continues to frustrate federal attempts to buy back water rights for the environment. The South Australian Government is now challenging the upstream states in the High Court. It’s a case study in how not to manage a water catchment.

Issues like climate change and water are really too big for Australia’s political system to solve, at least as it currently operates. In an election year, we can expect more prosaic and everyday issues to come to the fore. The price of petrol and groceries, the rights of workers to take holidays and of employers to sack them for poor performance, the amount the Government taxes each of us, and the ability to get to work on time on crowded trains and buses: this is the real stuff of Australian electoral politics. And it is on precisely these issues that Kevin Rudd has so far shown himself to be an exceptionally good political operator. While Labor state governments may fall, federally Labor looks anything but vulnerable.

Abbott and the Liberal Party will require some kind of seismic shift in public sentiment to get within striking distance later this year.


Ben Eltham is New Matilda's National Affairs Correspondent.