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Disunity was death for a government with a strong record

Labor managed the economy well and achieved significant reforms, but ultimately simply couldn’t govern itself. Voters were always going to punish them for it.

How did a second-term government that delivered some of the best economic management in the world and established major reforms in education and health so popular its opponents were forced to agree to them, manage to lose an election?

The standard answer, not incorrect, is that Labor has struggled to communicate its message on the economy. It never owned its economic success; indeed, many voters didn’t even think the economy had been managed well, even as Europe plunged into depression and the International Monetary Fund routinely downgraded its global economic forecasts.

But Labor’s problems were deeper than its lack of effective communication skills, the sort of problem that could be addressed (indeed, partly was, with the arrival of John McTernan) by hiring the right talent.

Labor managed the economy well, but it could never manage itself. In particular, it couldn’t manage Kevin Rudd, first when he was prime minister, when it took an unprecedented removal of a first-term PM to deal with his managerial style, and then when he was on the backbench, plotting his return. As one state Labor figure put it, Labor never worked out that if you removed a sociopath from the prime ministership, what did they think he was going to do in return?

The leaks that derailed the Gillard campaign in 2010 and cost her majority government set the scene for the ensuing three years: hobbled by deals with the Greens and the independents, particularly over a carbon tax she’d said loud and clear before the 2010 election she’d never back, Gillard’s prime ministership became a war of attrition between her and Rudd. Even after Rudd had been comprehensively defeated and professed he would never return to the leadership, he remained a lurking threat, eroding Gillard’s support, depriving her of clear air.

On the other side of the chamber sat Tony Abbott, with his colleagues strongly united behind him, his frontbench (however wretched, with the likes of Kevin Andrews and Bronwyn Bishop on it) unchanging.

Where Labor was most successful with voters was in its big picture, Labor-style reforms. Voters backed the mining tax, however badly implemented. They backed the National Broadband Network. They backed the Gonski review education funding reforms, and they backed DisabilityCare. All but one of those reforms has been adopted, partially or fully, by the Coalition. And that became another problem for Labor: the Coalition in effect said to voters “you can have Labor’s reforms without Labor’s chaos”. It proved a compelling argument, especially when the Coalition was able to simply stonewall Labor’s effort to portray them as budget butchers poised to slash spending. The Coalition even ditched a commitment to think about (and only think about) reforming the GST.

Restricted by Coalition “unity tickets” on big reforms and with Rudd only in the job a matter of weeks, Labor visibly wondered what to talk about in its campaign. Rudd’s lone ranger instincts kicked in and he began free-forming, conjuring visions of northern development, relocating naval bases and restricting foreign investment. Eventually sanity was restored and by the time of the campaign “launch” Rudd was back on the theme of jobs, but Rudd’s, and Labor’s, numbers were in decline.

Still, Rudd has done the job that he told Labor MPs he could do — “save the furniture” — in contrast to the huge defeat it looked likely Gillard would lead them to. Courtesy of the return of Rudd, and the New South Wales Liberals’ ongoing problems in western Sydney, the promised slaughter in NSW hasn’t eventuated, and Queensland may yet prove safe for all Labor MPs — although the touted swing to Labor that Rudd was supposed to deliver never happened. There were few in the Labor caucus who thought Rudd could actually win, and he hasn’t. But many still have their jobs partly thanks to him.

Rudd has also done the right thing and said he is now leaving the leadership. There can be no more returns for Rudd, even given his colossal ego. He must leave politics during this term and draw to an end the extended period of high highs and low lows he has inflicted on his party.

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  • 1
    Peter W
    Posted Sunday, 8 September 2013 at 11:28 am | Permalink

    Yes, Labor managed the economy well if you consider that borrowing over 300 thousand million dollars and spending it on essentially non productive trinkets and more paper shuffling bureaucrats is good management.

    Such profligacy is, in lefty parlance ‘unsustainable’? The interest bill alone could provide the kind of reforms that Labor like to announce but are unable to fund.

    Labor have always been economic vandals, pure and simple. Good riddance to the wastrels.

  • 2
    Ben heslop
    Posted Sunday, 8 September 2013 at 11:38 am | Permalink

    Gillard could have made the hung parliament work if she focussed on connecting with the public.

    Instead Labor were led around by the nose by Abbott when all they needed to do was ignore him.

    If Gillard and Swan had of connected with the public (for example, did they ever describe how the NDIS actually WORKS??!*) then Rudd wouldn’t of had a platform to return on.

    *hint its a voucher system

  • 3
    paddy
    Posted Sunday, 8 September 2013 at 11:58 am | Permalink

    No one in the Labor party will feel safe until Rudd actually resigns his seat. For any sane politician, the sort of defeat Rudd has just endured, would make a “dignified” retirement in a couple of months a foregone conclusion.
    But Rudd’s not exactly “sane”.
    Last night’s bizarre performance at his “concession speech” was downright surreal.
    Hopefully Julie Bishop will find him a nice job somewhere out of the country.

  • 4
    David Hand
    Posted Sunday, 8 September 2013 at 12:47 pm | Permalink

    You guys are dreaming if you think it’s all down to some clever politicking and a disciplined coalition team.

    $300bn in debt is a big price to pay for continued economic growth and even if it was the best policy, voters are looking for some fiscal responsibility going forward and they don’t see it in Labor. Comparing us to Europe in like suddenly taking out a big mortgage and comparing yourself favourably to the guy down the road suffering a mortgagee sale.

    But Labor’s real problems began on 23 June 2010 when a group of inside powerbrokers decided they knew better than the electorate and that the prime ministership was a privilege they were empowered to handle and bestow as a reward for loyalty. The rot set in then and to blame Rudd for undermining the subsequent administration is like complaining about being shot by someone you’ve just stabbed in the heart.

  • 5
    Posted Sunday, 8 September 2013 at 3:57 pm | Permalink

    Did anyone notice the speed with which Tony Rabbott got rid of his family for his victory speech? It was a poor reward for the family that worked hard to elect him.

    Of course they are all female and we know what Abbott thinks of women.

  • 6
    Posted Sunday, 8 September 2013 at 4:02 pm | Permalink

    PETER W: If there’s one thing I despise, it’s a sore winner.

  • 7
    AR
    Posted Sunday, 8 September 2013 at 4:37 pm | Permalink

    PeterW & DavidH - a single cell ameoba with the same digit IQ, it couldn’t even vary the verbiage sufficiently to pretend.

  • 8
    shepherdmarilyn
    Posted Sunday, 8 September 2013 at 4:55 pm | Permalink

    Peter W, why do you lieberal supporters only read the Murdoch rags? The GFC would have seen the liberal party borrow just as much because the effects of the GFC were global.

    Why do you weird little people think that Australia has so much control over things.

  • 9
    shepherdmarilyn
    Posted Sunday, 8 September 2013 at 6:52 pm | Permalink

    When you keep prattling about the so-called leaks in 2010 what are you actually on about? Gillard didn’t want to grant pension increases. That was it, but the increase had already been granted.

  • 10
    Andybob
    Posted Sunday, 8 September 2013 at 7:57 pm | Permalink

    There are some who say coalition supporters are bad losers, but in fairness they are also appallingly arrogant winners.

  • 11
    Andybob
    Posted Sunday, 8 September 2013 at 8:01 pm | Permalink

    Shepardmarilyn, It was the perception of underlying disunity, given that the leak had to come from within, and the implication that Gillard would abandon traditional labor values when it suited her. Both the perception and te implication were absolutely correct.

  • 12
    Francis Allen
    Posted Monday, 9 September 2013 at 8:04 am | Permalink

    Labor did well but was operating in a very hostile enviroment. The mainstream media took down that government. Propaganda ruled the day.

  • 13
    Mark out West
    Posted Monday, 9 September 2013 at 11:56 am | Permalink

    I thought you were a thinker Bernard and I’m a former Labor voter

    Gillard and Swan advised that the Union movement would launch an anti Carbon Tax Campaign and told Rudd to back away. Rudd had mad the Climate issue his main issue and was forever diminished as a result. His funck would have been expected and should have led the others to pick up the slack and some books will tell you.

    At the core Labor is run by right wing unions which Rudd as a technocrat is an anathema.

    The person they should be looking at is themselves. If they were so cohesive under Gillard why was she and the team constantly described as TIN EARED????????

  • 14
    beetwo77
    Posted Monday, 9 September 2013 at 1:23 pm | Permalink

    I don’t get the arguments about disunity. Disunity says that there is debate going in the party. Everyone standing in line behind the leader as per the Coalition, is clearly a smoke screen. The Coalition member parties are not in agreeance on some big issues. The debate within parties needs to be allowed to occur in public. Just like with the hung parliament that encouraged more debate. I believe it is a combination of lazy voting by listening to mainstream media, and the fact that the majority of people vote for what they think will benefit them not what will benefit the nation as a whole.

  • 15
    Karen
    Posted Monday, 9 September 2013 at 3:00 pm | Permalink

    @ David Hand - the debt which is a small percentage of GDP was worth having to keep jobs and the country out of depression. Small price to pay.

    And as for blame, Rudd carries the can - an appalling managerial, policy style that saw Labor staring defeat in 2010 had he not been removed, deliberate and protracted undermining of a minority government which he actually produced thanks to his narcissistic leaking, not to mention a shit campaign wasted partly on brain fart policy bubbles he was having in between 40 winks of sleep. Thanks, lone ranger, Rudd.

  • 16
    Karen
    Posted Monday, 9 September 2013 at 3:29 pm | Permalink

    @ Francis Allen - agree with you to a large extent but see my comment at #15, Rudd also fed the MSM like chooks to undermine Gillard. Being a narcissist, he probably thought for more than a nano-second that the MSM would come back to him, once he wrested the leadership from Gillard. Of course, we saw the inevitable where the media/Libs used all of those free kicks Rudd gave to them against him, as they would.

  • 17
    geomac62
    Posted Monday, 9 September 2013 at 3:57 pm | Permalink

    Karen
    Agree with your Rudd comment . Rudd was like one of those people we sometimes read about , lighting fires to be called up to put them out . Would be heroes with a fascination for creating havoc then hoping to look good setting things right . There would be no furniture to save if Rudd had not spent all his time since his removal tearing the house down .Pity the swing against Fitzgibbon was bigger and he lost his seat .

  • 18
    geomac62
    Posted Monday, 9 September 2013 at 3:58 pm | Permalink

    * was not bigger Re Joel

  • 19
    David Hand
    Posted Monday, 9 September 2013 at 4:05 pm | Permalink

    I agree about the debt Karen and I believe a Coalition government would have gone into deficit as well to keep the economy growing.

    My point is not that it’s wrong to be in debt. It’s that comparing ourselves to Europe is not a very strong argument for good government.

  • 20
    Mr J
    Posted Monday, 9 September 2013 at 4:52 pm | Permalink

    Peter W and David Hand, let the history wars begin.

    The $300 billion in debt is both Labor and the Liberals fault. While the Liberals up to 2007 reduced net debt levels to below zero, they left us a structural deficit with all the tax expenditures (such as chqanges to superaanuation taxes and halving of capital gains they provided to the electorate, mainly baby boomers.

    Here’s the lesson, government expenditure consists of mandatory expenditure and discretionary expenditure. Mandatory is locked into legislation and take time to reduce, think means testing of the Private Health Insurance Rebate. Discretionary expenditure is easier to adjust, but even then can be locked up in contracts, think Defence spending.

    Now Labor increased discretionary spending by about $60 billion in response to the GFC through handouts, BER and Batts. The rest of the debt is due to the fact that they can’t wind back expenditures quick enough to react the revenue falls. The primary amount of the debt is due to revenue falls from the Liberals structural deficit, combined with Labors $31 billion in tax cuts they introduced from 2008-09.

    So overseas economists with no vested interests understand this and acknowledged the Gillard government introduced real government expenditure reductions from 2010-11. But I understand that facts don’t matter, but when the Liberals blow the debt out by another $100 billion over the next 4-7 years I assume you won’t complain. Surely you won’t blame Labor given that the Liberals can wind back expenditure better than Labor?

  • 21
    Mark out West
    Posted Monday, 9 September 2013 at 5:44 pm | Permalink

    MrJ

    Fantastic response but you left out one item, go to the debt clock http://www.usdebtclock.org/world-debt-clock.html and you will see that most of the debt is held by Joe blow.
    Individual Australian debt is 80% of GDP bought about by ever increasing house prices fueled by middle class welfare of the Howard era. If debt is such a big issue them why are Australians borrowing at these huge rates? Because there are addicted to housing inflationary spending.

    The GFC (that nearly took the world economy to the brink) was fueled by a conservative government in the US who withdrew from bank supervision. No Labor style government has ever created an issue as destructive as the GFC, not even close.
    Conservatives are only interested in themselves and facts only get in the way of their greed.
    I wonder who Joe Hockey will listen to now he is treasurer surely not the RBA.

  • 22
    klewso
    Posted Monday, 9 September 2013 at 7:20 pm | Permalink

    Profligacy”? “Iraq”?

  • 23
    Sean
    Posted Monday, 9 September 2013 at 9:03 pm | Permalink

    $300bn debt? what’s that about? isn’t it somewhere in the $30-70bn range depending on how you add up the assets and liabilities? Australian private debt is more in the range of $300bn, and we are in the middle of a catastrophic house price bubble caused by profligate lending by the banks of money which doesn’t really exist.

  • 24
    Sean
    Posted Monday, 9 September 2013 at 9:07 pm | Permalink

    In May, Federal Treasuer Wayne Swan released the 2011–12 Mid-Year Economic and Fiscal Outlook (MYEFO). [4] In 2011–12, the Australian Government general government sector recorded an underlying cash deficit of $43.7 billion (3.0 % of GDP). [5] The fiscal balance was in deficit by $44.5 billion (3.0% of GDP).

    The gross national debt of households, businesses and governments has roughly doubled since 2005, with federal and state gross debt now at $500bn, consumer debt at $1.6 trillion and business debt at about $800bn.

  • 25
    Sean
    Posted Monday, 9 September 2013 at 9:10 pm | Permalink

    Howard’s debt was worse than Labor’s:

    http://www.businessspectator.com.au/article/2013/8/5/economy/whos-responsible-australias-debt-crisis

  • 26
    Savonrepus
    Posted Tuesday, 10 September 2013 at 5:15 am | Permalink

    Labor need to recognise that they have have only ever achieved electoral success with a populist at their head. This works electorally but then the party get swept up in the euphoria masking the fact that political success also requires administrative talent. You don’t have to replace a leader to put handcuffs on them you just need effective internal systems.

    It seems that Labor is destined to go through this endless cycle of safety safety and electoral failure until they find someone with public appeal who is granted supreme power without regard to their administrative abilities. Whitlam and Rudd both failed on this measure. Hawke succeeded precisely because in his time there were effective administrative checks and balances in place within the Labor administration.

    This time around Labor had the right formula but they should have kept control of Rudd rather than grant him absolute power. Now Labor will go for safety and cycle through leaders who ‘Can’t bowl, can’t throw’ until they are so desperate that they again finding themselves handing absolute power to an administrative deficit charismatic.

    Labor needs to realise that the way to deal with disunity is not to demand blind faith in a leader which they have no control but to demand blind faith in a party that has its leadership under control. Charisma may well be an essential ingredient for Labor to achieve electoral success but fail to control it and Labor fails in delivery.

  • 27
    David Hand
    Posted Tuesday, 10 September 2013 at 10:30 am | Permalink

    Savonrepus,
    Blind faith to a party? You mean blind faith to Shorten, Howes, Feeney, Ludlum, Obeid, Arbib, Macdonald, Thompson, Swan and Tripodi?

    Really?

  • 28
    Savonrepus
    Posted Tuesday, 10 September 2013 at 12:22 pm | Permalink

    @David - sometimes you have to play the Hand you are dealt with but opportunities do arise to rid yourself of the bad cards.

    In actual fact many Hands make light work so in the same way as at times you may defer to your family and so my point was better to be able to defer to an effective party structure than be totally reliant on the ebb and flow of the weaknesses of a single human bean.

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