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.

Refugee policy

While the Liberal's may be accused of playing politics on industrial relations, both sides of politics are playing politics with refugee policy. Gillard has maintained the rhetoric of her predecessor in focusing refugee policy as one premised on "wrecking the people smuggling trade". Having lost a High Court challenge on the Malaysian option, Gillard turned to the Angus Houston, Michael L'Estrange and Paris Aristotle to produce a policy, argued as necessary to stop deaths at sea. From late 2001 to June 2012, 964 asylum seekers and boat crew had been lost at sea while en route to Australia. Of these, 604 people have died since October 2009. The 22 recommendations of the Expert Panel on Asylum Seekers were introduced in amendments to the Migration Act.

The result is Gillard has now adopted the Liberal policy of offshore detention for asylum seekers. While Gillard has rejected the introduction of TPV's, the other arm of Howard's deterrence strategy, there are reports of pressure coming from Labor MP's to reintroduce the measure. With an election looming, and with marginal seats in capital cities to lose, the dog whistle politics of TPV's may force Gillard to concede. Should she do this, it would neutralise Abbott's position, but it may not save the government. In terms of the Party, the issue of TPV's is a divisive issue and one a Party trying to rebuild in states like NSW, does not need.

Labor Party reform

Simon Crean lost the leadership of the ALP in December 2003 because he backed Labor Party reform, focusing on reducing union voting rights within the Party's policy-making conference framework. Gillard has so far said little on Party reform. Instead it has been Senator John Faulkner, focusing on the NSW Branch that has led the charge. The ALP at a state level is dysfunctional. In NSW, the Party desperately needs to rejuvenate party membership by handing over more power to members in policy and leadership issues. NSW Secretary Sam Dastyari has been thoughtful in considering primary-style elections, a relocation of the notorious Sussex Street complex to the Western suburbs of Sydney, and distancing the ALP from the ICAC investigations into former Labor powerbroker Eddie Obied and the dealings of Ian Macdonald. Dastyari and Faulkner are calling for the dismantling of the factional system following other Labor luminaries including John Button, Robert Ray, and Rodney Cavalier. This is a move welcomed within the Party's rank-and-file.

Numbers game

Gillard will lose seats in NSW at the next election. But elections are about numbers, 150 seats means government is formed with 76 seats. Five independents currently sit on the crossbenches: Oakeshott, Windsor, and Wilkie along with former Liberal Peter Slipper and former Labor member Craig Thomson. Slipper and Thomson are unlikely to be re-elected. Wilkie's chances on re-election will rest on local issues. Windsor is a political maverick likely to be re-elected, however along with Oakeshott, all sides of politics will heavily target their seats. The Green's have only ever had one other member in the House of Representatives, Michael Organ elected in a by-election in 2002 and unable to retain his NSW seat of Cunningham at the subsequent general election. Bandt is still an unknown quantity and, as with Wilkie, will rely on local issues to be re-elected.

This aside, maths will determine the color and makeup of the next government. NSW, Queensland and Western Australia are problem states for the Gillard Government. Victoria and South Australia are much stronger. Tasmania should return a few seats reasonably well. What this means for the Opposition, is a targeted marginal seats campaign focusing on suburban seats in Brisbane and Sydney. It is here the Liberal Party's hard-line policies on asylum seekers may do well, but it needs to be very careful on industrial relations, and needs to do better in articulating the Liberal Party's economic policies. It cost John Hewson one election, and may cost Tony Abbott the next one.