Gillard versus Abbott: does it really matter who wins?

Kevin Rudd’s almost-one term as prime minister is perhaps unprecedented, especially with Australia’s economy going well by Western nation standards in terms of growth. But once Rudd lost his record public popularity, after a number of major policy debacles and backdowns, his extensive control and lack of consensual style was no longer tolerated: especially at a time when the Coalition challenged Labor in the polls as the preferred government option despite Rudd still outpolling Tony Abbott as preferred PM.

But Rudd’s exit aside, key tactics in the upcoming federal election are already known. Labor will seek to generate fear towards Abbott, especially his past statements which include support for further labour market reform. The Coalition will seek to highlight the shortcomings of the government’s economic stimulus programs, especially its home insulation scheme which will go down as one of the worst policy debacles in Australian federal government history.

Taking a punt, Labor is likely to win. Julia Gillard is a capable leader and political animal who will generate enough public support by addressing various community concerns. And Labor’s subtle effort to blame Rudd’s style will again allow Labor to offer a greater degree of spin, thus offering hope for those inclined to be inspired by statements.

Already, a Nielsen poll indicates a 55-45 lead for Labor on a “two-party” basis, with Gillard also the preferred PM over Abbott (55-34). A separate Galaxy poll had Labor 52-48 on a “two-party” with Gillard preferred over Abbott 58-32.

There are two issues that may cement a Labor victory.

First, if Labor can resolve the mining tax, or at least be seen to be making a fair effort at comprise, it will gain considerable credibility. This is what the public wants, despite some public division over the needed taxation revenue concerns to pay for important spending programs, or the need for Australia’s mining industry to remain competitive in taxation terms. A May 2010 Morgan poll (Finding 4496) found that 52 per cent of electors (up 7 per cent from about a week earlier) disapproved of a 40 per cent mining tax on profits.

The second issue that may ensure a Labor victory will be its bid to enhance its environmental credentials. While an Abbott-led Coalition helped erode public support for the Rudd government’s Carbon Pollution Reduction Scheme - with a January 2010 What The People Want poll finding a support-opposition ratio of 33-51 per cent after being 40-42 in October 2009 - the same poll indicated that 54 per cent still “strongly agreed” or “agreed” that “man was substantially responsible for an increase in global temperature” (58 in October 2009); 57 per cent still thought that CO2 was making the earth warmer as a greenhouse gas (62 in October 2009); and 51 per cent supported Australia move on global warming, even if the rest of the world was not ready to move.

While Gillard has indicated a greater desire to work with the community on environmental solutions, Labor will have to overcome the reluctance by Australians to pay higher prices. The January 2010 What The People Want poll found that 59 per cent would pay no more than $10 additional per month (including 47 per cent who would pay nothing extra). This was mirrored by the Lowy Institute Poll (2010) which found that 33 per cent were not prepared to pay anything extra with 25 per cent prepared to pay an extra $10 or less.

In regards to rising housing costs both sides are yet to offer few policy solutions. This is despite the Coalition highlighting an admission by Wayne Swan that the gap between supply and demand for could grow to 600,000 dwellings in the next 10 years. It seems that only a major global recession or lower immigration targets will force a major home price correction, although much suffering would accompany the former scenario.

And, despite differences over the degree of government intervention between Labor and the Coalition, the trend continues towards lower company tax rates (besides mining) and greater labour market deregulation. Perhaps only a reversal of policy trends by major players (especially the US, UK and EU giants) will cause a reversal of such trends.

But that is where my pessimism ends. I do not pretend that a Labor or Coalition government can provide magical solutions as they seek to address many old and new policy issues at a time when government outlays as a percentage of GDP has barely changed in the last 25 years. Governments today have to be even smarter, fairer and efficient with our allocation of resources.

But I have faith in the Australian people as part of the important interaction that occurs between political parties, interest groups and public opinion in our liberal democracy.