By Josh Gordon
Predictions in politics are risky, but here goes: Kevin Rudd will win the election.
It might seem like half a lifetime, but merely a year ago Malcolm Turnbull was wandering around the Canberra press gallery's midwinter ball convinced he had Kevin Rudd on toast over the so-called OzCar affair.
Illustration: Matt Davidson
Remember? The then opposition leader sidled up to Rudd's economics adviser, Andrew Charlton, and offered a piece of ''friendly advice'' laced with menace - don't lie to protect your boss.
I remind you of this messy episode merely to make the point that politics can be a wonderfully unpredictable business.
Who would have thought, for example, that the email upon which Turnbull was basing his ''friendly advice'' would turn out to be a fake, courtesy of a Treasury mole named Godwin Grech?
Who would have thought just a short time later that Turnbull's leadership would implode? Who would have thought that Tony Abbott would become Opposition Leader and that Labor's emissions trading scheme would collapse in a flaming heap?
And who would have thought that Kevin Rudd, until quite recently one of Australia's most popular leaders ever, would suddenly be facing the prospect of becoming the first one-term prime minister since James Scullin, who was booted out in 1932 following the onset of the Great Depression?
No doubt about it, making predictions about the inherently unpredictable and chaotic world of politics is a fraught business. So here goes.
The fashionable view in Canberra seems to be that Rudd's leadership is moribund. The pack has caught a whiff of blood and is closing in. Sydney's Daily Telegraph last week even went so far as to run a story quoting some bozo who thinks (but can't be sure) that Rudd still owes him a beer after a late night drinking bout that took place in 2005. The horror.
With so much chest thumping, it would be easy to declare - as Herald Sun columnist Andrew Bolt did recently - that Kevin Rudd is ''finished''.
But I'm not so sure. My bet is that Rudd will decisively win the next election, even if Labor does lose some skin. Here's why.
1. Australia has one of the lowest unemployment rates in the developed world. Since the start of the global financial crisis, the economy has created about 240,000 new jobs. It's probably an understatement to say aspects of the government's stimulus package were badly delivered. But people also recognise that the government potentially saved thousands of jobs by quickly dumping a large amount of cash into the economy to fight the worst slump since the Depression. That counts for a lot.
2. Interest rates remain low. The Reserve Bank might have delivered six consecutive interest rate rises, but its cash rate still remains 2¼⁄ percentage points below the level that prevailed at the time of the last election. That's equivalent to a saving of about $144 a month in interest for every $100,000 of debt. Home buyers are still getting off relatively lightly compared with the past, although house prices and debt continue to rise.
3. Movements in unemployment, interest rates and inflation have proved a reliable predictor of election outcomes in the past. It's not particularly scientific, but one theory holds that if at least two of these three indicators have deteriorated from one election to the next then the incumbent is voted out of office. The approach is said to have reliably predicted the result of elections in every Western democracy since the end of World War II on all but three occasions.
On all three measures, the Rudd government has performed solidly, with interest rates and inflation lower than at the time of the last election and unemployment only slightly higher, despite the worst global recession since the Depression.
4. Labor will run a highly targeted marginal seats campaign. Despite his waffle, Rudd is a disciplined campaigner. It has only just started, but already ministers are popping up with local candidates in marginal electorates to dish out millions of dollars for sports stadiums, community centres, schools and hospitals.
It's crass and it's not particularly fair, but well targeted campaigns in marginal seats with strong local candidates focusing on local issues are a reality of modern election campaigns.
As the recent South Australian election showed with the re-election of Mike Rann despite near-universal predictions that Labor would be defeated, the Labor machine is well-funded and well-prepared.
5. Incumbency counts for a lot. Labor is preparing to unleash the mother of all scare campaigns to capitalise on voters' natural aversion to risk. Tony Abbott will be portrayed as a threat to jobs, interest rates and living standards. He will also be targeted as inconsistent, with campaign ads already highlighting recent comments that only his carefully scripted remarks should be taken as gospel truth. Highlighting the ''risks'' of change isn't particularly inspiring, but it works, as John Howard showed on several occasions.
6. Voters might dislike Rudd, but they seem to dislike Abbott just as much or more. The latest Age/Nielsen poll shows Labor's primary vote has slumped from 43 per cent to 33 per cent since the last election. Yet according to pollster John Stirton, an extraordinary 90 per cent of Labor's lost votes have gone to the Greens, with the Coalition picking up only one in 10 of the disaffected Labor voters.
The problem seems to have much to do with Tony Abbott himself. According to another poll last week by Essential Research, 30 per cent rate Abbott as a good leader of his party, compared with 38 per cent for Rudd. At the same time, 34 per cent rate Abbott as a poor leader, with Rudd also on 34 per cent.
7. The big question for Labor MPs is how the mining tax will play out, particularly in resource-rich states such as Western Australia and Queensland. According to the Essential Research poll, 42 per cent believe it will be bad for investment and jobs, while 40 per cent say mining companies will continue to make large profits and are just trying to avoid paying their fair share of tax.
But here's the rub: 17 per cent don't know. Labor is relying on the idea that the debate will become stale and eventually fade from the public consciousness. For Rudd in particular, the stakes couldn't be higher.
Josh Gordon is The Sunday Age's national politics reporter.