Tuesday, 25 June 2013

Labor and policy

The personality battle within Labor is intertwined with the party's other problems - its failure to reform and right its policy wrongs, writes Peter Reith.

Nothing much has changed since I wrote at The Drum in mid-February:

"Yesterday's Nielsen poll is just another blow to a Labor Party in decline. It reports that the Coalition leads 47 per cent to 30 per cent for Labor. In my view, despite the reality that the numbers will move around in the months ahead, get used to Labor lagging the Coalition."

As of June 21-23, Labor's primary vote is on 29 per cent and the Coalition is on 48 per cent. And nothing much will change in the 12 weeks to the September election.

The only possible change is if Julia Gillard goes, and even then, at best, Labor might save a few seats with Kevin Rudd back in the Lodge.

Labor's continuing infighting is not about to come to an end this week or anytime between now and the next election, nor will it come to an end after the next election. Labor is tearing itself apart in public. The Coalition's campaign ads will not need to be any more than a few video clips of what key Labor MPs and union bullies think of their colleagues.

Ministers are openly trying to cripple their colleagues. Ministers like Gary Gray, Peter Garrett and Stephen Conroy have all said that if Gillard is voted out then they will retire to the backbench. And by that action alone they will be campaigning against a returned leader by their mere existence on the backbench. Whatever they say or do, the public will not believe that they have buried the hatchet.

Maybe Kevin Rudd will challenge this week and lose. In that scenario, in the time up to the election, unless he retires from Parliament in the meantime, every time he gets out of bed, he will be accused of stirring trouble.

The personality issues are intertwined with the big policy issues and the need for party reform.

The personality issues are important. PM Gillard is the most ideological Australian prime minister I have ever seen. She has little time for the sort of consensus that was pivotal in Bob Hawke's success. She has none of the commonsense pragmatism of John Howard. She is a true believer in gender wars and she is closely allied to the thinking of the radical green movement. She is also an opponent of party reform, opposed to breaking the link with the minority union movement, and thoroughly committed to further reregulation of the labour market. She has changed her position on boat people but not until she was confronted with the consequences of loss of life. Now her policy has been swamped by new arrivals.

The most successful political leader from the centre left on the world scene in recent years has been Tony Blair. He was proudly New Labour. Julia Gillard is old Labor. Blair kept Thatcher's deregulated labour market whilst Gillard has busily overturned the Howard reforms. The unions can't ever admit the reality that old Labor is finished. So, as a result, the failure to reform and their many wrong policy decisions have left the ALP stranded in its own mess. Regardless of which side is in power, the following current Labor policies are all unsustainable: the Hansonite policy on 457 visas; labour market reregulation; shipping industry; car industry protection; the transport industry; and the constant promulgation of green-inspired red tape on environmental projects. Labor's approach is undermining Australia's longer term future.

Australia's last recession was in the Hawke/Keating years. Keating boasted "this is a recession that Australia had to have".

The period after the recession saw the usual lift in economic activity as happens after a downturn. The Howard government benefitted from the upswing and did a good job managing the SARS outbreak, the Asian financial crisis, and the end of the internet boom. Despite all the usual economic ups and downs of the economic cycle, 11 years later, there was never a recession under Howard.

Howard left office with not even a prospect of recession, money in the bank, a new tax system and a more efficient labour market. In contrast, under Labor, debt has grown massively, Labor's signature tax reform was the botched mining tax, the unions have been given a free kick through labour market reregulation, and informed commentators are measuring the prospects of a recession in Australia.

Labor's economic mismanagement has made Australia more vulnerable to economic gyrations. The Reserve Bank has already raised doubts about the resources boom and a well-known economist was reported in the AFR last week (June 19) as follows: "Saul Eslake puts the likelihood of a recession at 25 per cent ... "

Against this background, Michelle Grattan put it well last Friday when she wrote at The Conversation:

Labor's paralysis over the prime ministership has become a disgrace. To have this bitter infighting drag on through the final fortnight of parliament is extraordinary self-indulgence. It reflects the stubbornness of Julia Gillard, the bloody-mindedness of Kevin Rudd and his forces, the weakness of the caucus, and the absence of independent senior figures in the parliamentary party who are willing [to] step up to force a resolution.

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