Rudd's risk factor

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This was published 13 years ago

Rudd's risk factor

By Shaun Carney

The wobbly global economy is good news politically for the PM — he can remind voters of his safe pair of hands.

THE latest news on the domestic economy is good: a fall in the unemployment rate to 5.2 per cent. Internationally, the news is not so good. The signs of a genuine, sustained recovery in the major industrialised countries are scant. The investor George Soros is warning of a second downturn because of the levels of debt in the northern hemisphere.

Those twin streams of news will be music to the ears of Kevin Rudd and his election campaign team. If the government is to navigate its way to an election victory a few months from now, it needs to be able to blend positive and negative information on the economy into a single coherent message. Distilled, this message will be: we've made some achievements in firewalling Australia against international collapse, don't put it all at risk.

Politically, it wouldn't harm Labor's chances of a second term if Soros's prediction is correct, even if some of that overseas downturn flowed back into our economy. This is the bizarre situation in which the Rudd government finds itself: the more jittery swinging voters get, the sunnier the Labor Party's election outlook.

The government needs voters to get worried about exactly where the national economy is headed because they'll be less disposed to give Tony Abbott and the Liberal-National coalition the benefit of the doubt. The latest opinion polls do not carry much information that's encouraging for the ALP. In fact, overall, they're terrible.

But the one tiny bit of shiny stuff in the mullock heap for Labor is the finding that voters are no better disposed towards Abbott than they are towards Rudd. Without that, the government's predicament would be even more dire than it is. This means there are doubts about Abbott among a majority of voters. There are certainly a lot of doubts about Rudd, too. But Abbott's approval results are not encouraging for the Liberals.

This is why the media talk of Rudd being replaced as Labor leader is so much rubbish. To the extent that a few Labor MPs and quite a few journalists - in fact, a fair swag of the Canberra press gallery - are keen to get rid of Rudd, they face a pretty big problem: they do not have a candidate.

There is absolutely nothing in Julia Gillard's CV, or her personal or private utterances, or her political modus operandi, to suggest that she would be part of any move against Rudd. Gillard is a tough operator - her professional hardness simultaneously impresses and frightens quite a few of her colleagues - and she absolutely loves a fight.

But her approach to politics is cool, almost icy, and just about as free of emotion as you can get. Gillard is methodical. Pitching for the leadership because of a run of bad opinion polls just ahead of an election would be, by her lights, the definition of an act based exclusively on a rush of blood to the head. By contrast, being part of a leadership team that pursued a step-by-step campaign aimed at reviving Labor's fortunes would stand as her idea of fun.

Of course, whether this campaign can succeed, we shall see. Is Labor's poll slump merely a protest or is it a rejection? If it's the latter, then Rudd's goose is cooked.

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Labor is proceeding on the basis that at this point it's a protest about a lack of direction, a loss of faith on some key issues, including climate change and asylum seekers, and poor policy execution on the roof insulation scheme. Its assumption that this is a protest is underpinned, at least in part, by Abbott's poor personal ratings.

The government entered 2010 with the expectation of calling an August double-dissolution election. Despite its misjudgments about the political potency of the emissions trading scheme issue since then, not enough has changed to rule out that month as the most likely time for the election.

The chief components of Labor's re-election pitch are already apparent. The government has been at first confused, then bemused and finally resigned to the realisation that its stimulus package has so far been the modern-day equivalent of Paul Keating's voteless recovery in 1996.

As my colleague Tim Colebatch pointed out in yesterday's Age, the latest jobless figure is equivalent to the August 2008 unemployment rate - the last reading before the global financial crisis began. So in terms of the jobs numbers, the crisis has passed, and Labor has secured exactly no political advantage.

Labor now understands that today's voters do not dwell on what has happened; they are interested in being told by the government about the next instalment. But they might be open to a reminder or two or several dozen about how Australia has fared under Rudd compared with the rest of the developed world.

The message the government will want to attach to the resource rent tax from now will be to do with Rudd showing the fortitude to see it through, rather than the whys and wherefores of the tax proposal.

The hope is that he will demonstrate that he has learnt from his series of retreats in April, possibly reinforced by an announcement about his recommitment to a cap-and-trade carbon scheme early in a second term. After that it will be about the economy.

The international economy will be cast as a scary, uncertain place, while Australia under Labor has been a calm, prosperous nation led by a government that's made some serious mistakes but is determined to learn and do better. John Howard made the 2004 election about trust. This year it will be about risk, if Labor gets its way.

Shaun Carney is associate editor.

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