Not Happy, Kevin


You have to feel for Labor’s dwindling band of true believers right now. Barely two and a half years into his first term, Kevin Rudd’s Labor Government is unaccountably struggling.

The heady days of 2007 and 2008 seem eons ago. All of sudden, Labor is staring down the barrel at an ignominious first-term defeat.

As recently as March, I observed that while the Tony Abbott-led Coalition was gaining in the polls, Labor was still ahead on all the available measures. No longer. The latest AC Nielsen opinion poll shows Labor trailing 47–53 in two-party preferred terms. Worse, Labor’s primary vote is an anaemic 33 per cent, as it haemorrhages votes to both the Coalition and the Greens. If these figures were repeated on polling day, the ALP would be swept from office.

Where did it all go wrong?

The short answer is: emissions trading. Labor’s backflip on "the greatest moral challenge of our time" was not just a deeply disappointing policy development for those who believe in the importance of addressing dangerous climate change. It was also a strategic disaster for Labor politically. As I observed at the time, the decision played straight to all the Coalition’s talking points about Rudd: in particular that he is all talk and no action. It alienated progressive voters. And it suddenly made the Prime Minister appear duplicitous and untrustworthy.

In fact, until the ETS backflip, this government has been rather good at keeping its promises. Although you wouldn’t realise it from the relentlessly negative coverage it seems to be getting from much of the media these days, the Rudd Government has in fact delivered on large parts of its election platform: computers in schools, rolling back WorkChoices, significant health reform, ratifying Kyoto, beginning the national broadband network, even the promised tax cuts for low- and middle-income workers. And, but for the dramatic events last December that culminated in the election of Tony Abbott by just a single vote in the Coalition party room, the Government would have delivered an emissions trading scheme as well.

But all of that is irrelevant now. The train of events set in motion by the decision to delay the ETS has suddenly split apart Labor’s governing electoral coalition of socially liberal moderates and conservative lower-income earners. The initial strategy behind the decision, while flawed, was at least understandable: take the ETS off the agenda, and campaign on issues where Labor is perceived as strong, like health. But the health strategy didn’t work. As has happened so often with this government, after an initial burst of energy on health reform, there was little or no follow-through. The Prime Minister achieved his agreement with the premiers, declared victory, and moved on to the Henry Tax Review.

Which brings us to the Resource Super Profits Tax. As Treasury boss Ken Henry and many economists keep insisting, the new mining tax is sound policy. But faced with an avalanche of criticism from a well-funded and media-savvy mining lobby and their cheerleaders in the business press, Labor is finding the new tax a very tough sell.

And there’s the rub. Who can doubt that this government consistently struggles to sell its policies? Why did Kevin Rudd stand on the sidelines of the climate change debate through so much of 2009, while climate scepticism gathered pace in the community, and Labor’s bill failed twice to gain Senate support? Why has the Government struggled to sell its schools stimulus policy, which even the Auditor-General thinks is a success? And why was the Henry Report held over for five months, and then released on the same day as the Government’s plans for the new tax? Had Ken Henry’s review been released when it was delivered (over Christmas), much of the mining lobby’s fury might have vented itself by now. The Government could have prepared the path for the new tax strategically, rather than presenting a fait accompli that was bound to incite a strong response.

The larger problem is that, after the backflip on emissions trading, the RSPT is the wrong tax to try and sell. Compare it to a carbon tax. Introducing a price for carbon enjoyed (and still enjoys) significant support in the Australian community. It had been the official policy of both major parties for nearly a decade. And it enjoyed strong support from sections of the business community and even some energy companies, which stood to gain from the inevitable shift away from dirtier fuels it would have encouraged.

In contrast, a resource rent tax was not a burning issue in the community. About the only support base it could count on was among academic economists. Although the AWU under Paul Howes and some in the superannuation lobby have tried to argue for it, they have exerted little influence in the public debate compared to the big mining corporations.

But, because of the ETS backflip, the Rudd Government found itself with a major fight on its hands over the mining tax. Firstly, the emissions trading reversal emboldened the mining lobby, who must have reasoned that if they could win on emissions trading, they could roll back the RSPT as well. Secondly, it painted the Government into a corner, by making further compromises or backflips politically difficult. Finally, it committed the Government to fighting an election on a proposal for a new tax — a tax it had not even foreshadowed to voters, and not the emissions trading scheme it had campaigned on in 2007.

It doesn’t help that the Prime Minster has been, to put it charitably, off his game. Rudd’s performance since Christmas has been patchy at best. At his worst, as in the appallingly handled announcement of the emissions trading backflip, he has appeared tired, cranky, and arrogant.

The shortcomings of Kevin Rudd’s leadership style are now beginning to reveal themselves. His inability to delegate and love of micro-management could be explained away as typical of modern leaders, indeed even an asset, when his personal approval rating was above 60 per cent. But as the election campaign approaches, the Prime Minster’s love of chaotic decision-making processes appears to have produced some serious tactical blunders.

Worst of all, Labor has lost much of the moral authority it needs to recapture the initiative. Totting up the refugees backflip and the turnarounds on the ETS and government advertising, many voters may have concluded that Kevin Rudd is in fact just like any other politician: liable to break whatever promises he feels necessary in the heat of the political moment. That’s dangerous territory indeed for a leader who sold himself in such uncompromisingly moral and principled terms. It’s the hyperbole problem again.

Interestingly, the beneficiaries of the Government’s mounting unforced errors include not just Tony Abbott and the Opposition, but increasingly the Greens. On recent poll figures, the Greens are now polling above a Senate quota in every state. If this level of support holds on election day the party will gain as many as five extra Senators in the new Parliament — plus Lindsay Tanner’s seat of Melbourne, which is now under serious threat from prominent local Green Adam Bandt. Assailed from the Left on climate change and the Right on refugees and taxation, Labor’s electoral majority is suddenly unravelling.

Can the Government still win? Of course it can. It enjoys all the advantages of incumbency, plus an Opposition that still underwhelms most voters. And much can change in the crucible of an election campaign, as Abbott’s extraordinarily poor campaigning in 2007 showed. But Labor need a lot of things to go right between now and election day.

Ben Eltham is New Matilda's National Affairs Correspondent.