The state of play in federal politics

For a minority government that many pundits thought would not last a full term, Julia Gillard will take her government to the polls three years after it formed government in 2010. Malcolm Farr summed up Gillard's first six months as Prime Minister as one of "excruciating stuff-ups and less-than-thrilling come-backs". She ousted a first term Prime Minister, rashly called an election three weeks later, didn't win a majority in the subsequent election, and then negotiated for 17 days with the crossbenchers to form government.

Fast-forward to February 2012, and Kevin Rudd declared his campaign to retake the Prime Ministers job, saying he wanted to "finish the job the Australian people elected me to do". Apart from the fact it was the ALP that was elected by voters in 2007, Rudd pushed ahead with saying the Gillard Government had lost the trust of the Australian people. Amongst Gillard's responses was, "this isn't Celebrity Big Brother, it is about working out who can lead the nation, who has the ability to get things done". Rudd subsequently lost the leadership vote by 31 to 71 votes. It was up to Gillard to 'get things done'. In review what has the Gillard Government done?

Hits and misses

In the last sitting week of the federal parliament, 11 bills requiring cross-party agreement passed the House of Representatives. In the 2012 sitting, 195 Bills were introduced to the federal parliament. If Bob Hawke's leadership of the 1983-1991 Labor Government was consensus, Gillard's leadership is marked by compromise. Gillard has had to compromise on environment policy, poker machine reform, and on the Carbon and Mining Tax. She is likely going to have to compromise further on refugee policy, notably the reintroduction of Temporary Protection Visa's (TPV's).

Compromise has led many political commentators and section of the public to question Gillard's character and trust. This will be the issue the Liberal Opposition will target in Opposition campaigns in the lead up to the next election. Gillard's character will also be questioned by her decision to publically back Craig Thomson before dumping him from the ALP and the appointment of Peter Slipper to the Speakers Chair. In hindsight both were bad decision, smacking of political pragmatism. How much her attacks on sexism and misogyny and her savaging of Tony Abbott in the House of Representatives over her role at Slater and Gordon will counter public views of Gillard's character are unknowns for both sides of politics.

Gillard will take the ALP to the polls next year with economic policy and industrial relations as her strengths. For progressive voters, refugee policy may reinvigorate the Green vote, one that has lost traction since the departure of Bob Brown in favour of Christine Milne. On refugee policy, the Liberal Party is also likely to win support in some urban and rural electorates. Refugee policy wedges Labor, so there is no net gain in adopting Howard-style policies.

Economic policy

Since the August 2010 election there has been only one interest rate rise of .25 per cent in November 2010 and five interest rate cutes taking the official interest rates to three per cent on 4 December 2012. In 1990 the official rate was 17.5 per cent. During the Howard Government (1996-2007) interest rates hovered between 4.25 per cent and 6.75 per cent. While most Australian mortgage holders are paying closer to six per cent, Treasurer Wayne Swan has the leverage to put pressure on the banks to pass on rate cuts. Similarly the introduction of bans on exit fees, stronger powers for the Australian Competition and Consumer Commission to investigate banks from price signalling to keep interest rates collectively high, and measure to prop up credit unions and building societies as the 'fifth pillar' of Australian banking have arguably contributed to better economic outcomes for mortgage holders.

These measures, coupled with the Gillard government committed to delivering a surplus and estimates that only 14 per cent of Australia's debt is government owned (with 76 per cent of Australia's sovereign debt owned by offshore based investors) has seen Australia be one of only a handful of countries to maintain a AAA credit rating. Australian unemployment rates are 5.2 per cent. This compares to U.S. rates of 7.7 per cent, New Zealand rates of 7.7 per cent and 7.8 per cent in the U.K. The Australian dollar remains above parity with the U.S dollar resulting in the Australian dollar being flagged as a reserve currency by the International Monetary Fund. This is good for consumers, however it does have negative effect on exports, including the mining sectors, which are also facing declines in commodity prices and some weakening of demand, and in the manufacturing and tourism sectors. This may have an effect on unemployment rates in early to mid-2013. Overall, the Australian economy has grown by 0.5 per cent in the September quarter and over the year economic growth was recorded at 3.1 per cent. According to Wayne Swan, Australia is the fastest growing major advanced economy.

Opposition Treasurer Joe Hockey asked about recent interest rate cuts and economic growth data, argues that the Gillard Government has not costed policy announcements such as the Gonski Australian Education Bill and the National Disability Insurance Scheme Bill, pressure exists on the Australian economy because of asylum seeker flows, and there is evidence of decreased consumer confidence because of likely tax rises to pay for new policy measures. Liberal economic policy responses are to cut the Carbon Tax and the Mineral Resource Rent Tax (which has delivered no government income). Tax reduction, tightened government spending, and decreased regulation, are Hockey's responses to economic growth under an Abbott government. While Hockey maintains there is uncertainty in the economy, and there is in some sectors and regions, the national data on growth, unemployment, and interest rates does not clearly indicate this.

Industrial Relations

The general consensus is that John Howard lost the 2007 federal election because in part of his 2005 Workplace Relations Amendment (Work Choices) Act. Liberal policy will always advocate an individual-based industrial relations framework, as opposed to Labor policy that will always advocate a collective arbitration framework. On this point both parties have clear historical and ideological positions that will not shift. It is in the detail however that the Abbott-led Liberal Party has lost their way. Abbott's private members bill to hold an inquiry into registered organisations including the Australian Workers Union and the role of its officers – likely focusing on Julia Gillard's association twenty years ago – with the aim of establishing fines for dishonest union officials, as Michelle Grattan notes in the Sydney Morning Herald is not policy, it is politics. Abbott's policy on industrial relations is to maintain the 2009 Fair Work Act although with changes. To date those changes have not been announced.