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.

If most people are going to be better off, why did the poll produce this result? The problem is that nobody is supporting the policy – because nobody really got what they wanted. The Greens got a carbon tax, but it's not as strong as they'd like.

Environmentalists are struggling to see real benefit because too many high-polluting industries are exempt. Green voters in general are not supporting the tax because it does not yet achieve what the Greens sought. On the other hand, the Coalition never wanted a tax in the first place. What do they care about exemptions?

Gillard's compromise between Green, Labor, Liberal and independent positions is producing a situation where nobody is satisfied. To avoid adverse economic impact, Gillard has gone soft on the environmental goals of a carbon tax and focused on the economic issues.

The result is an even weaker environment policy and there are no political winners. Without support from either side, and without a consistent moral argument for the government about the environmental and generational benefits of a carbon reduction program, the public is susceptible to Abbot's claim that it is little more than a 'big new tax'. New agendas create confusion, and without a strong sell on the moral, generational or environmental benefits, the public will always fear the worst and focus on the word 'tax'.

Asylum seeker compromise

Labor's other headline problem – asylum seekers – is also suffering from compromise.

In 2007, Rudd promised to dismantle Howard's Pacific Solution. One of his first actions as Prime Minister was to stop sending asylum seekers to Nauru. Since then, the Rudd and Gillard governments have mostly fulfilled their promise of removing children from detention centres. Abbott's ongoing assertion that Labor cannot 'stop the boats' has however caused Labor to change its position.

Enter the Malaysian Solution – as close as Labor can come to Liberal policy without sending people back to Nauru. By adopting this policy, Gillard has had to compromise between Liberal-style deterrence and Labor-inspired social democratic and egalitarian values.

The clash is noticeable when the Government, particularly the Minister for Immigration Chris Bowen, is seeking to recognise 'the sovereignty of states in determining their own immigration policy' and expressing a desire for international cooperation.

Domestically, the Malaysian Solution is aimed at boat people, deciding in Howard-like fashion who comes into this country and the manner in which they do. Internationally, it is part of the regional cooperation framework advanced by Prime Minister Gillard. The rhetoric is along the line of 'tackling' people smuggling with 'cooperative arrangements', but the people affected are the asylum seekers themselves.

Even if the Malaysian Solution goes ahead, Gillard is caught between appeasing the Coalition and the Australian public, and appearing to be a good global citizen. Nothing that she says can lean too far to one side for the risk of alienating the other. Rather than selling one policy, Gillard is balancing two, while walking the tightrope of minority government.

The policies of the Gillard Government are not as bad as they are made out to be. The carbon tax takes a step to address climate change, but avoids damaging the economy. The Malaysian Solution was an attempt to stop the boats while engaging in a South-East Asian regional framework.

But through compromise, Gillard has left herself fighting both sides of each debate. The Liberals and the Greens have chosen their corners, each swiping away at the parts of the policies they don't agree with.

Labor stands in the middle holding each at bay.

None of the parties or the independents are really getting what they want. It seems it is just too hard to sell a minority government.