Selling A Post Honeymoon Budget


The Rudd Government enjoyed one of the longest honeymoon periods in Australian political history. But the honeymoon is over. 

Three recent polls have confirmed a sudden and precipitous dive in this once-popular Government’s support. First, it was Newspoll, showing Labor’s primary vote at a dismal 39 per cent — and more voters dissatisfied with the Prime Minister than satisfied. Then came Monday’s Nielsen poll, showing Labor on 37 per cent of the primary vote, and with the two-party preferred standings dead-even on 50 per cent each.

Finally, today’s Essential Research confirmed the trend. Labor and the Coalition are suddenly neck and neck, and the recent trend is running against the Government and in favour of Tony Abbott and the Opposition.

The Government is being punished by voters disillusioned by Kevin Rudd’s recent poor performance. Some are proposing simple explanations, like rising tobacco taxes but it’s clear that anger over the ETS backflip has also played a role. There is also the suspicion among many commentators that a more general dislike of the PM’s increasingly clunky communication style is forming in the community. And there’s no mistaking it: the Prime Minister has been performing poorly recently.

At the beginning of the Rudd Government, there was a burst of reports published about the Prime Minister’s workaholic lifestyle and the high burnout rates inside his inner sanctum. In keeping with the accelerating trend for centralisation of the executive in Australia and the UK, top-level decision-making in the Rudd Government is concentrated among a select few: Rudd, Gillard, Swan and Tanner, plus key staffers such as Lachlan Harris and Alister Jordan. Rudd’s Cabinet is often not consulted at all on key decisions.

We may now be witnessing some of the limitations of this frenetic and relentless centralised style of politics. Rudd looks exhausted, and according to reports by those who know, his staff are wearying too. As I wrote at the time, Rudd’s media performance when announcing the ETS backdown was listless and mumbling — a far cry from the beaming confidence of Kevin07.

Fatigue leads to error, and there have been plenty of these lately. The handling of the ETS postponement was a critical miscalculation. Abandoning a key election promise with the most threadbare of explanations was always going to carry a substantial degree of risk, but Rudd appears to have rolled the dice without consulting his backbench and without formulating a decent communications strategy to explain the about-face.

The backdown was all the more curious for being completely unnecessary. The Government had little to gain and much to lose by making public its decision to push back the implementation of a price for carbon to 2013. A simpler strategy would have been to say nothing at all, and — if pressed — to reaffirm the Government’s intention to introduce the legislation in the next term of parliament.

In fact, the last few months have seen a cascade of unforced errors, as the Government has stumbled into often unnecessary firefights with powerful lobby groups like mining and tobacco companies, state premiers and home insulation installers. The Government has indeed made a series of unpopular decisions, but the real concern for Labor backbenchers and party powerbrokers must be the uniformly lacklustre performance of the Prime Minister and much of his cabinet in selling these decisions to the public.

The Government’s response to the Henry Tax Review is a case in point. Treasury Secretary Ken Henry was asked to conduct a "root and branch" review of the tax system more than 18 months ago, and the final report was delivered over Christmas. But rather than releasing it over the summer, when it would have attracted relatively little attention, the Government chose to sit on it for a further five months, and then to respond on the same day with a set of new policies that had precious little to do with the original report. It was another example of overly clever politics, when a simpler and more transparent approach might have yielded better results.

All this makes Wayne Swan’s third budget tonight that much more important. The Government badly needs some good news to act as a circuit breaker — especially now that a largely hostile media scents blood. Here again, the Government finds its hands tied, at the very time when it needs some freedom to maneuver. Conventional political wisdom, for instance, would suggest a big-spending budget in an election year, the better to shower gifts on sceptical voters.

But Labor has already committed itself to a reasonably austere budget, containing spending growth at 2 per cent and raising and introducing new taxes, like the tobacco excise rise and the Resources Super Profit Tax. Swan has two rough choices: to try and craft a package of micro-bribes to very targeted sections of the electorate, or to abandon conventional wisdom and stake everything on the smallest deficit possible in an attempt to cement Labor’s mantle of fiscal responsibility. Either tactic has its risks, particularly since Swan will be unable to announce a surplus.

Throughout Kevin Rudd’s first term in office, friends and foes alike have marvelled at his energy and drive, but complained about his inability to focus on any one thing for very long. But after a frantic two and a half years in office, the Prime Minister is about to enter the campaign period. Labor badly needs a return of the calm and confident Kevin07, because the mumbling and stumbling Kevin10 is rapidly losing his shine.

After tonight’s budget, the election campaign will effectively begin. It’s a campaign in which Labor suddenly looks only an each-way chance of winning. For the Government, it will be a nervous time. For the Opposition, it is a time of renewed hope.

Ben Eltham is New Matilda's National Affairs Correspondent.