Throughout the campaign, Crikey had the benefit of numerous insights from a senior Labor figure who has now produced this hard-hitting analysis of what went wrong and the Labor heavies are already talking about it.

Have you ever had that experience where you attend a football match, spend the whole game screaming abuse at some poor sod who had a shocker of a match, then next day read in the paper that some journo has named him their man of the match?

It was a bit like that for me reading Hugo Kelly’s sealed section report on Sunday night (reproduced at the bottom) which is clearly describing some election held somewhere on Saturday, but not as far as I can see the Australian one.

So let’s clear a few things up first:

Labor lost the election fair and square because of the economy and the interest rate scare. It would have been remarkable had any government lost with an election this good, but Labor seemed to go out of its way at times to help Howard.

Here, IMHO are the other key factors which lost the election:

  • Labor’s inability to deal with the scare campaign on interest rates. Despite Howard hammering this theme for three years Labor still had no answer other than a stupid stunt with a big poster.
  • Labor’s strategy team. Despite deriding them as “roosters” Latham recalled Smith and Swan and together with Faulkner, effectively reinstated the 2001 campaign team. Hugo Kelly says “John Faulkner and Stephen Smith were an astute strategic team (leaving aside the Tasmanian Forest disaster)”. This is a bit like saying the Titanic had a successful maiden voyage (leaving aside the iceberg disaster). The facts are Faulkner and Smith, with assistance from Swan, have now been the strategic team for two successive federal election defeats. Winning is everything in politics and the facts are they’ve lost twice – and this time they lost badly.
  • The forests policy was a shocker – it p*ssed off timber workers in 3 key marginals, while offering green voters nothing more than an inquiry. It was unnecessary (Labor had those Green votes anyway) and simply energised a large number of people to vote Liberal at the last minute in Bass, Braddon, McMillan and large parts of Queensland. And for what? The Green vote in the Hose of Reps was 7% a rise of just 2%, despite the Democrat vote falling more than 4% – in other words, the Greens couldn’t even pick up half of the Democrat vote. While Labor was chasing a few more Green preferences they were always going to win anyway, Howard was chasing Labor voters and winning them.
  • Labor’s advertising never quite hit the mark. Every Liberal ad on rates and Latham made me wince because I knew it had hit the mark. Most of ours left me wondering what the hell they were on about.
  • The anti-Costello campaign. Costello is not popular, and those ads did not help the Coalition. But they were a complete waste of money for Labor. Why? Well the punters don’t believe them. They think Howard is staying. They remember at the least election that Labor spent millions telling them Costello would take over and he didn’t so they think (wrongly this time) Howard will stay again. In any case, Howard was the target not Costello and every ad warning about Costello is a defacto acknowledgement that Howard is too good to attack.
  • Labor’s tax policy. The policy was completely derailed by the argument over whether the $600 was “real”. So instead of two days hearing about the benefits of the policy (which was very good), voters heard two days or argument about whether a payment was real. Labor should have spent the money required to roll this into the benefits and ignored this silly fight. In addition, Latham’s lines the day he launched this were all over the shop, – he got better but it was too late. Which brings me to;
  • Labor’s media strategy – The Hawker Britton team may be legends at state elections but they just couldn’t cut it in the big pond of federal elections. The press gallery is the best collection of tax/education/health/defence/political reporters in the nation and will not be fobbed off with the complete lack of detail they were repeatedly offered by Latham’s media team. They were unable to explain key aspects of the tax policy, health policy and education policy at crucial moments, contributing to the confused reporting of Latham’s policy initiatives.
  • Labor’s Iraq policy. Latham’s on the run promise to “bring the troops home by Christmas” cruelled this potential vote winner for Labor. Even opponents of the war think this a bad policy and it cast doubt on his grasp of security issues. Howard wasn’t able to use it during the campaign because of his lies on Iraq, but it meant Latham wasn’t able to use it either.

A few final points:

Latham will be re-elected leader unanimously – but if he’s made little headway within a year or two, expect the rumbling about a Rudd challenge to begin. Rudd is the ONLY person in the party who is in anyway a potential leadership alternative.

Simon Crean doesn’t have a place on the new Labor frontbench. He, and Kim now have to retire gracefully and declare they will quit at the next election. Latham should also be ensuring the Fergusons, Melham, Mark Bishop and quite a few others are also stepping down soon. The Latham team at this election was the Crean team – he now needs his own team for the next three years, and there must be no room for anyone but the absolute cream of the crop. This means Peter Garrett for example, has to go straight on to the front bench, though not in the environment role.

Jenny Macklin was NOT loyal to Crean. She abandoned him sometime early in 2003, stopped defending him publicly before the first leadership challenge, and had clearly shifted her support to Beazley well before the second challenge.

Hugo got one thing right though – Julia Gillard should be the new deputy and she must take the shadow treasurer’s role that Macklin refused last time – the deputy must be Shadow Treasurer.

The suggestions about Conroy taking a more high profile role are so bizarre they warrant no further comment.

What Hugo Kelly wrote that upset our Senior Labor Insider


There will be no leadership challenge against Mark Latham. He fought a strong campaign, but his loss was the inevitable conclusion of ten years of federal Labor decay.

Simon Crean was admirable in his attempts to restructure the party after 2001. But Latham needs to do more to clean out the deadwood that continues to clog the party’s arteries.

Put simply, Labor fielded too many duds in winnable seats. Too many factional hacks. Too many lazy labour lawyers. Too many time-serving troglodytes, many who hail from the union movement.

But there were many positives from this campaign. Julia Gillard showed leadership potential. Latham, John Faulkner and Stephen Smith were an astute strategic team (leaving aside the Tasmanian forests disaster).

The inevitable frontbench reshuffle must result in a rejuvenation of the leadership team.

Jenny Macklin is an admirable Labor soldier, who’s done some good policy work and helped unify the party during the potentially divisive Crean trauma. Simon Crean also has a place on a Labor frontbench. But not in their current roles.

Gillard should replace Macklin as deputy leader. This will be extremely painful for Macklin, who has shown loyalty to successive leaders. But loyalty to leader and faction is not enough.

Latham doesn’t need just an earnest sidekick for the next three years. Labor needs an energetic, vote-winning alternative leader who can sell the party as the Government-in-waiting.

Ditto Simon Crean. He did the right thing in throwing his support behind Latham, and Latham repaid him in spades by giving him the Treasury post. But Labor cannot win Government with Crean as shadow Treasurer.

Treasury needs to go to an ambitious Rooster. Someone like Stephen Smith or Stephen Conroy, who even Andrew Bolt was promoting on Insiders this morning (disclsoure: both the Crikey editor and Senator Conroy attended Bolt’s 4oth birthday in 1999).

Victorian Senator Conroy needs to find a lower house seat quick smart, and take a place high up on the Grand Prix grid. He’s been driving in the Senate go-kart race long enough.

By learning the lessons of defeat, Labor can keep the Fourth Howard Government honest and build a platform for victory in 2007. The alternative is more of the same. That is simply not good enough for the party or the nation.