Compromise and policy balance are shaping Gillard’s minority government

Since the 2010 federal election, the Gillard Government has defined itself through compromise. It was compromise with the independents that allowed Labor to form the government, and since then Gillard has been negotiating with the Greens and the independents, while fending off the Liberals, to stay in power.

This year's biggest issues - the carbon tax and the 'Malaysian Solution' - are good examples of compromise. While Gillard works with the parties on either side of the political spectrum, neither is broadly backing the government: rather they are only looking after their own political interests.

On the evening of the 21th of August 2010, Tony Abbott was declaring victory. Over the following days he would claim that the Coalition should form government because they had received the majority of two-party preferred votes, the Coalition had more seats than Labor, and in his eyes, Labor had lost the election by failing to win back government.

Julia Gillard didn't play the populist media games or try to convince voters that she had won. She talked to the independents and the Greens, ultimately compromising to gain their support to form a minority government.

From day one there was a difference between Gillard and Abbott's politics. Abbott maintained the need for another election to resolve electoral uncertainty while Gillard took the pragmatic approach and secured the government for the Labor Party.

For this Gillard was seen as engaging in backroom deals, little different from the way that she took the job from Rudd earlier last year. Because she compromised to form government, it did leave Labor appearing to lack a mandate for its policies.

Leading a minority government, Gillard needs to constantly compromise or risk a double dissolution election. She needs to keep the support of the Greens and independents to pass legislation, and has to be careful not to give too much ammunition to the Liberals. Sometimes this involves abandoning her own policies – enter the carbon tax.

Carbon tax compromise

Days before the election, Gillard said that there would be no carbon tax under a Gillard-led Labor government. But no carbon tax meant no political support from the Greens, and no Greens support meant no government. In the end, the Gillard government is implementing a carbon tax: but one that is a compromise of Labor-Green-independent negotiations. Without this compromise there is no Gillard government.

Compromise on the carbon tax didn't end with the Greens and the independents. Between Gillard's announcement of the carbon tax policy and announcement of the policy details, a tango of compromises developed.

Abbott said that the petrol prices would go up. Petrol was granted an exemption. Abbott said that the steel industry would suffer. The steel industry was granted an exemption. Abbott said that the cost of living would increase. Gillard announced an extensive compensation package for households.

Labor's compensation package seeks to make 90 per cent of households better off under the carbon tax regime or in at least the same position as they currently are. However, an August Galaxy poll showed that 69 per cent of voters believed that they will be worse off under the carbon tax.